never met anybody who can't get enough of the products it makes. When it comes to brand strength by size, Microsoft wins, but when it comes to brand strength via hearts, it stands far behind its diminutive rivals.
Why is there such a discrepancy? It seems to stem from the very size and dominance that Microsoft cherishes. By being so universal with a presence on virtually every desktop PC, it has made itself a utility, just like the faceless companies that pump electricity into your house or water into your taps. It's arguably more difficult for utility companies to endear themselves to the hearts and minds of users than a company that makes shiny little cars or donuts; Microsoft shares this problem.
There is also a certain arrogance to Microsoft's brand. It innovates, but only as much as it can get away with (the languishing Internet Explorer web browser being a case in point). Its products become more secure, but only after countless hacker attacks and regular public outcry. It plays fair in the countries in which it operates, but only after numerous government anti-trust suits threaten to stifle its commercial activities. By operating in this fashion it seems to damage its own brand, and, unusually, seems unrepentant or unaware of doing so.
It didn't have to be this way. All along Microsoft had the opportunity to make a lot of friends, make a lot of cool stuff and win an emotional and an enduring brand following among its customers. Instead it made a lot of money, and, through heavy-handed business practices, quite a number of enemies—not great brand management.
If Microsoft has achieved its immense market dominance despite the antitrust suit by the US government, the antitrust suit by the European Union, the animosity of the German government, the anger of stifled smaller competitors, as well as the frustrations of users dealing with seemingly endless security threats, just imagine what could have been if it had played nice, if it had kissed a few more babies and shaken a few more hands.
In 2004, several market leaders came out looking a little arrogant and slow off the mark. Microsoft is a case in point, but it wasn't the only one to suffer from being whipped by unforeseen rivals. Sony and Nokia are other examples. All three brands are now playing catch-up with smaller and newer competitors and missed trends and technologies.
Now In 2005, Microsoft shares something with Sony, it is beginning to build its own fortress. It is under siege by smaller competitors the way that its younger, leaner self took on established mainframe heavyweights in the 80s. Products like Firefox, Linux, Google and, of course, Apple (a brand that should arguably have died a decade ago) have seen sudden growth fuelled by the loyalty of friends, consumers and developers that not only buy the products, but, in the case of the open source Firefox and Linux, can make regular contributions to it.
Key product areas (browsers, search and operating systems) that Microsoft relied on and fought hard to dominate, are seeing market share go to unlikely competitors in small but loyal quantities. While this may not cause problems for Microsoft in the immediate future, the power of brand loyalty has the ability to sway markets in unpredictable ways. Just ask Steve Jobs.
The browser market, which Microsoft is universally considered to have dominated since the late 90s, is now firing up again. As testament to the theory that it develops products only as much as is totally necessary, Microsoft stopped developing Internet Explorer soon after it effectively killed any competition. For years the same version of the same browser has been languishing. But slowly new contenders arrived. Frustrated with the limitations of Microsoft's Internet Explorer, Blake Ross and Ben Goodger developed Firefox. A willing army of developers, made loyal by virtue of their universal dislike of Microsoft's offering, got the product up to speed and ready for market. You could be forgiven for thinking Firefox is just another minor open-source challenge to a powerful brand, but its 25 million users (and counting) beg to differ.
Meanwhile, the battle for web search has, for now at least, been lost to Google, the Number 2 brand in brandchannel's 2004 Readers' Choice Awards (based on brand impact). Microsoft has recently started a desperate catch up game with a newer shinier MSN Search. Whether or not this service is technically superior to Google will be evident in time, but the branding is unimaginative; even the name suggests that it is simply a "me too!" feature bolted onto the giant MSN machine rather than a serious single-minded competitor. The sub-brand doesn't have the "specialist" feel of Google's offering.
The real bite to Microsoft's brand comes from the domain of Microsoft's main product, its operating systems. It is here that a strange thing is happening. The brand that owns Windows, an OS so common that it is almost a commodity, is now facing fierce competition from small, but serious, companies. One of those serious challengers is Linux, an open-source operating system that is sold by many companies and developed by thousands of developers. Linux started as a small project by one developer, Linus Torvalds, and like Firefox, grew into a competitive product in a very short time, chiefly due to the army of disgruntled programmers. So serious is the challenge that Microsoft finds itself in a begging game with such customers as the German government (a customer that is weighing up the ROI of deploying yet another version of an operating system that is owned by a virtual monopoly).
There are rumors too that Apple is in talks with three major PC makers to develop a version of OSX for PCs. Reasons cited are frustrations with Windows security and the delays in development of Longhorn, Microsoft's next version of Windows.
Each of these challenges to Microsoft's brand seems to stem from perceived lack of innovation and service, and a sense of "bullying." The effect is that disgruntled competition seems to form into groups of "anti-Microsoft" developers and users who are united by their loyalty to the cause of finding an alternative to Microsoft. It can be argued that it is exactly this sort of loyalty that kept Apple and the whole Macintosh platform alive during some very rough times in the past.
Microsoft needs to have a soul, it needs to connect with people, to be cool, to give a damn about helping its customers. It needs to forget about building just up until the point of what it can get away with and concentrate on building beautiful things we never knew we wanted.
There is a lot of innovation at Microsoft, but until its brand becomes less cynical, consumers are never going to be excited by or protective of the brand, they will simply continue to use it because everybody else does. Rather than attempt to crush competitors, as it did to Netscape, Microsoft has a great opportunity to build fantastic new products and cool new brands that stand at arms length from the Microsoft juggernaut. These could provide an opportunity for Microsoft to regain a warmer connection with customers.
No doubt some of Microsoft's reputation might stem from misplaced resentment by competitors, but matters aren't helped by the company's heavy-handed tactics. It is in an enviable position of being able to change focus and attitude without a fiscal gun to its head. Microsoft, the company, may be far from going over the fiscal precipice in the face of competition by comparative lightweights such as Apple and Firefox, but for consumers, Microsoft, the brand, may be losing ground, fast.