Earlier in the week, we mentioned that Microsoft was providing a financial incentive to Nokia to produce super cheap phones for China and developing markets. While this is a good strategy for Microsoft and Nokia to break into these markets, it can be viewed as the two companies essentially giving up on the U.S. to a degree, ceding market share to the current juggernauts of Android and iOS. But this doesn’t have to be the case; Microsoft can emerge as a true third platform, and perhaps even unseat one of the two industry leaders by focusing on the enterprise.
To say Microsoft products and services are installed in most businesses would be a monumental understatement. A significant majority of companies around the world rely on services such as the Windows operating system and the Office productivity suite to get things done. These companies have licensing arrangements with Microsoft to provide these services to its employees, and these agreements have stood up to some fairly decent competition from Google Apps, who back in 2009-2010 were strongly pushing companies to “Go Google” and adopt Google’s application and cloud storage suite. Clearly, companies are going to stick with Microsoft until something comes along that’s better, and the chances of that happening anytime soon is slim.
Microsoft can build on these relationships by building a superb Windows Phone environment that feels like a natural extension of the Windows product, and offers significant advantages over the competition. I’ve had the pleasure of using all the major mobile platforms for work purposes, and Windows Phone 7 already has a leg up on the competition when it comes to Office products. From viewing to editing documents, spreadsheets, and presentations, Office for Windows Phone provides a clean user interface and document compatibility to create a seamless end user experience. Sure, there are workable alternatives on both platforms (Apple’s office suite is a pleasure to use on the iPad, for example), but none of them hold the muster or have such a large installed user base as Microsoft Office.
At the same time, Microsoft’s Windows Phone platform has struggled to take off. Currently, the operating system amounts to less than 5% of the U.S. Market, and is pretty much just as abysmal world-wide. This is despite a fairly public “Smoked by Windows Phone” campaign where Microsoft challenged Android and iOS phones to beat it in a mix of carefully-selected challenges meant to demonstrate the benefits of live tiles. Still, people simply haven’t taken to Windows Phone 7. With Windows Phone 8 around the corner, Microsoft has the opportunity to reset itself and deliver a product that customers actually want, and it all begins with the enterprise.
One of the biggest drawbacks of the mobile ecosystem as it exists today is the lack of a fully-functional VPN client for tablets and smartphones. Can you imagine being able to hook into your work’s network to pull a needed file, edit it on the go with a Windows Phone or Windows 8 tablet, and have it automatically saved and synced to your hard drive so you can pick it right up when you next are at your work computer? For me, and for several other business people I’ve spoken with, the lack of a strong VPN capability in smartphones and tablets is the one main reason why they are unable to truly remotely work, and Microsoft has the easiest and fastest road to success in this area. If Microsoft can create a seamless VPN experience, and sell that experience to businesses and business users (i.e., market the shit out of it), I can see customers flocking to Windows Phone left and right.
Similarly, Microsoft can build on its enterprise applications, most notably the Office suite. Despite its often hefty price tag, people like Office and put it on their computers. The formatting capabilities easily best the likes of Google Drive (formerly, Docs), as well as most competitor offerings, and each release brings a more polished, clean user interface, a trend that looks to continue with the rumored Metro Office set to launch alongside Windows 8. Microsoft can land a knockout blow if it can manage to create the same desktop experience in Windows 8 tablet, and a desktop-like experience in Windows Phone 8 for smartphones, and don’t offer the same experience to the competition.
Of course, Microsoft’s business strategy in some ways shoots itself in the foot on that last bit. We know that Microsoft is hard at work building a fully-featured Microsoft Office Suite for the Android and iOS platforms, with the company expected to release apps on these competing operating systems later this year. Depending on how fully-featured the final product will be, it could take away one chance the company has for a sustainable competitive advantage in the mobile market. Of course, Microsoft is doing this for the money, and it’ll certainly make a boatload of cash on Office applications for Android and iOS, but the move won’t help it grow the Windows Phone platform.
In sum, if Microsoft is in fact going to grow the Windows Phone user base, its greatest chance for success will be the enterprise market, and it’d do well to focus their efforts there.