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Microsoft Store

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Take a look at the companies that have made major progress in the technology industry in the past few years and you’ll notice a pattern. Apple and Google both emphasize simplicity and a go-to-market strategy that emphasizes consumer markets. In an age when the consumerization of IT is the reality and the Consumer Electronics Show is the biggest technology trade show around (not the now defunct COMDEX), it’s pretty clear that consumer markets are a clear pathway into the enterprise.

But they are not the only way. For instance, consider how IBM remade itself. Big Blue owned the client side of corporate sales with its ThinkPad PCs. But the erosion of profitability on the client hardware side pushed IBM to move its product mix upstream. IBM ultimately sold off its PC notebook business to Lenovo and focused its hardware business on higher-end servers.

Microsoft, however, seems to be trying to play both sides. On the server side the company’s innovations recognize and capitalize on the consumerization of IT. For instance, the company is introducing management software that manages a variety of end-user devices including non-Windows smartphones and tablets. That’s a smart strategy that acknowledges and aims to fix a big IT headache right now.

On the client side, Microsoft continues to push Windows Phone 7 with the Mango update coming in the fall. Plus, Microsoft’s forthcoming Windows 8 operating system will be designed to run natively on ARM processors, making it a better fit for tablets. The hardware makers are the ones who will be taking these devices to market. But if you talk to Microsoft about it, they talk about a strategy for selling into the IT organization, not to consumers. They’ll talk about selling Windows tablets to the IT guy, not to the users.

And yet, Microsoft is doubling down on the Microsoft Store concept. The company now has a handful of retail stores where it sells OEM hardware with Microsoft software to consumers. You can buy a Dell PC for less at a Microsoft store than you would pay for it direct from Dell online. Microsoft plans a total of more than 70 Microsoft Stores over the next three years. So there is some attention to the consumer market here. Microsoft is also using the experience to better learn how to sell to consumers through feedback and interaction with people who buy from Microsoft Store.

Consider this: much of the innovations that have come on the client side to the enterprise have been brought in by users, not IT. People brought in their own PCs so they could use spreadsheets and other productivity tools, people brought in PDAs to manage contacts and calendars. And more recently people have brought in iPhones and iPads.  IT added these to the mix when they couldn’t fight them. But the disruptive way into the IT organization has always been from the users up.

Privately, Microsoft partners say that Microsoft’s story on mobility isn’t really ready yet. But in a little over a year when Windows 8 makes its debut and Microsoft can deliver a full and robust PC experience on a tablet with seamless integration with Windows Phone and Windows PCs, the overall Microsoft experience will be a blockbuster, they say. The question is, will that be soon enough. With HP putting its webOS on PCs as well as its tablets and phones and the rest of the world arguing over which is better IOS or Android, will Microsoft’s second-half-of-2012 strategy be too late to make inroads?

And if it is, will Microsoft’s reputation with corporate IT and its strategy to continue to focus on corporate IT first still serve to support the company in these changing times? What do you think?

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