Microsoft is just NOT a consumer company.

It’s Oracle, it’s Cisco, it’s Caterpillar Construction … all fine and perhaps even great companies but NOT consumer companies.

It’s company culture and the people that they hire. It’s a company built on hounding you until you sign the maintenance contract. The difference in an enterprise or government account is you can identify the one or the few people responsible for making that buying decision and either delivering what you “want,” or going around you to a higher ranking decision maker. If Bill Gates calls your CEO, what are you going to say?

But consumers? They do not make out a REQUEST FOR PROPOSAL. They do not tell you what they want and what their budget is. Consumers will say many things if you lock several in a room and pay them $35 … they will exercise 2 hours a day, only eat low-fat foods and donate 25% of the salary & time to charities. In reality? Not so much.

That is why Microsoft has no clue about consumers and why EVERY consumer launch since 1998 has FAILED.

Bob OS, MS watches OS, MSN as an ISP, MSN search, WinCE, Plays4Sure, Windows-based movie stores, WinMobile, Table PC’s, Home Networking, Media PC’s, Vista, Zune and even the Xbox (spending $20 BILLION to make $5 BILLION is many things but not a success).

Shareholders have to ask – WTF?

And not some minor failure … they spent $4 BILLION dollars to take on AOL with MSN and LOST that battle. AOL? Really? During the heydays of dialup, MS saw that 23 million people were paying about $25 a month to AOL and wanted a piece of the action. They couldn’t even win that battle … how do they hope to compete against companies people actually like and admire?

Frankly, they can’t.

Who fails at launching any new business in 11 years? Only Microsoft.

Who is subsidized by shareholders and the Windows & Server division so that Microsoft’s cash on hand has fallen from $56 billion to about $29 billion?

Corporate customers are essentially wildly overpaying for the monopoly they wanted … and MS can turn around and dump into products like watches and the Zune.

Or as Fortune points out, Microsoft makes NO money on the internet. In the quarter reporting in the Fortune article, AOL made a profit of about $270 million, MS’s internet business – all together lost nearly $500 million. Some powerhouse huh?

It’s very simple. When consumers have a choice, they seldom choose Microsoft.

Why?

Microsoft’s Cultural Belief that it’s yours to fix. We are giving you this great thing – now it’s yours.

DAP-MP3′s players? MS crowed that when they entered the marketplace, they would easily be a strong #2 very soon and then who knows? After 3 YEARS, they have 3% of the marketplace and losing share over the holidays because they realized that it was futile to spend more money AND of course, the Zune lockup over the leap year software FAIL did NOT help. Again, just indicative of MS’ attitude that IT will fix any software problems … what? Consumers can’t figure it out themselves? “Sorry, we’re on holiday. Just wait a few days.”

Why do you think it took them 7 years to finally made some efforts to fix the virus-trojan-malware issues with XP? It’s IT’s problem, not ours, we just sell this stuff. that is the business of doing “business” when it comes to selling a landmover or a server – any issues, you should have a technical person to resolve it but just as if Caterpillar sold an SUV or when MS sells to the consumer, there’s more than just saying it’s IT’s issue …

Xbox Red Ring of Death? No problem, we’ll just fix or replace – what’s money to us versus admitting something is wrong? NO RECALL to see here, move along. Unlike the corporate market where there is very little choice and IT will fix it (and keep their jobs), consumers remember the brands that FAIL them … Failure rate – 15% 30% so it all makes the Xbox numbers sold kind of vague – how many are actually functioning units?

Basically, they have poisoned their own name.

What does the typical PC user think of MS Windows? It’s familiar but it’s prone to go south on them and it’s very mysterious and will sometimes just stop working. It’s probe to viruses (spending $100 every year at least to try and keep it clean), spyware, malware and rootkit issues – again, MS says it’s the users fault and even if it is … basically it links WINDOWS and MS to all the infectious issues regarding a personal computer.

Even if you cling to the belief that Apple’s OSX is too “small” to get infections – the fact remains that with 50 million users, after 8 years on the market, it has exactly ZERO viruses.

And consumers are not morons – why are WIN PC’s sold by price and Apple Macs sold by features?

WIN PC’s are valued only by price. People will hop and skip from brand to brand – whoever is the low cost leader that year? From Gateway to Dell to HP to Acer … we don’t even care what size the screen is or if it’s a small, slow processor, I am ONLY willing to pay $499 or LESS to buy a computer with Windows installed.

What did that Vista $300 MILLION campaign accomplish?

Nothing … and now people have pushed the “right price,” of an Windows PC to less than $300. Netbooks sales are growing, profit margins are shrinking.

As MS showed in the “Mojave” experiment where they got focus group people to take a look at what they thought the next WIN OS was and surprise, it’s really Vista!

But you’ll also notice, hardly anyone of the 35 people they showed really even admitted they would rush out and buy VISTA … they basically said, looks great and I will think about buying it – that is pretty much the BEST response … but why can’t MS sell Vista? Because their main buyers value a PC at around $499 … a) they know that buying the upgrade version will probably cripple their computer (again, MS’s history comes back to bite them) and b) who would pay $250 for an OS for a $499 computer? Sure, they’ll take Vista if they have to on a new $499 PC but to go out of the way to buy it and load it? These ads/videos are honest – nearly everyone liked Vista but how many actually say they are willing to pay full price for it right now? VERY FEW and that is MS’s OS market situation.

Vista is a fine OS, nothing really wrong with it but it’s NOT valued at 50% of the price of a PC to WIN users … and when Windows 7 rolls around, it will be EXACTLY the same response. It’s like floor mats on a new CAR, I’m not paying $399 for them but if you bundle in with back row air, lights and a mini fridge, sure, I’ll pay for it in a bundle.

That is why their Seinfeld ads nor the I’m a PC ads hold any resonance because for the bulk of PC users, it’s just a lamp. They want to surf the internet and send some emails. That’s worth about $499 for the bulk of PC users.

Because we see the flip side of the equation. NPD data as reported in ComputerWorld and elsewhere.

Apple has @67% of the $1,000+ retail market. On the surface it doesn’t seem like much of a stat but what’s critical is that at retail, for people willing to pay $1,000 or more?

MS & Windows PC’s market share have fallen from 98% in 2000 to 34% in 9 years.

Apple only sells 1 computer under $1k but it doesn’t have to sell more because if you have $1,000 or more to spend on a computer, you weigh more than just the price and 2/3 of all those shoppers buy a Mac. Let the bargain hunters choose a PC – Apple takes the ther position (and more profitable position) – if you have more to spend and not just surf the net, here’s what we offer you.

That is the result of MS poisoning its own name in the past 11 years with antitrust suits, viruses, malware, Xbox Ring of Death, pointless ads and hammering home the point that the best PC is the cheapest PC – and in the past 11 years, that means, from $1,499 to now $299 … so while MS makes $25 to $60 for each OEM Windows OS … it also means that consumers value it at ZERO. Include it with a personal computer, I’ll use it. Pay extra? No, thanks.

And that is why the MS Retail store will fail.

Because Microsoft’s name means if it’s the cheapest choice and I’m only looking at price, I might buy it … personal computer? Under $1k, I might buy a Windows one … over $1k, only a 34% chance now … Video game console? 40 million have choosen the Wii at $249 or more … Box 360 – well it is cheaper than a PS3 but at half the market share of the Wii who is pulling away at twice the growth rate. Again, MS – the value choice.

Zune? Since MS is not willing to lose much more money, it languishes since it’s price is at most only a few dollars less than an iPod.

Or the most bitter blow? MSN Search is FREE and yet, it is losing marketshare to Google even after investing BILLIONS …

That is why Microsoft’s retail effort will fail. It is a weak consumer brand name.

The people who are going to visit an MS Store for TWO reasons.

a) They are looking for bargains – won’t find any there and

b) To complain or get tech support why their PC isn’t working, or why their Xbox isn’t working.

After 30 years of telling people to call the manufacturer or to reformat the machine, how is that going to go over with consumers? And unlike Apple, how much help is MS going to offer people who essentially paid MS $25 for an OEM version of Vista while the average Mac user paid Apple about $1,500 and the average iPod user about $200?

Will MS stores clean out viruses and malware while you wait?

Will they really be selling $299 netbooks or will they really be featuring $299 Premium Vista OS retail versions? MS Office Premium at $399? Or will they only carry $6,000 gamer machines as the only ones befitting a MS store?

Will they carry every smartphone running WindowsMobile? Can they answer every question about every WindowsMobile OS feature on EVERY smartphone?

Will their store clerks know more about Halo6 or the guys at GameStop?

This is why the Sony stores failed.

Unlike the Apple Store, they don’t want to offer tech support, the clerks will not be able to be trained to answer all the hardware-software questions and no one will really want to go there just to hang out …

Because while Micosoft thinks it’s still 1995 and they were king of the world, it’s really 2009 and they are the bargain basement brand of the PC world … NOTHING wrong with it – just as Acer embraces that station … just as there is nothing wrong with being WALMART or the $.99 STORE. As long as you are making money, it’s all good but just as WM discovered, they will never be Target … at least WM knows to walk away … Microsoft does not … they should stick to the enterprise & governments where their employees and the company culture resides … where they are making solid money and not throw away shareholder value and money as they have for the last 11 years.