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May 27 2010   5:29PM GMT

Microsoft wake up call

badarrow Barbara Darrow Profile: badarrow

Even avowed Microsoft boosters are concerned about the company’s recent travails.

As someone who doesn’t follow the vendor as closely as in the past, it’s still very clear that Microsoft has big “issues” not the least of which is that it lost its market-cap dominance to Apple, the most proprietary–and in some ways most user-unfriendly– vendor in tech.

The departures of Robbie Bach (who will retire in the fall) and J Allard certainly got folks’ attention. One Microsoft partner is anxious about the company, beyond the Enterprise & Device division, which is where Bach and Allard resided.

“I am very worried about Microsoft in general. [It’s a]  comedy of errors, except not funny,” he noted.

On some level, who cares about market cap? And, executive exits at a company Microsoft’s size are to be expected — the company remains huge. But, the news is worth noting because it reinforces the perception that Apple’s commitment to slick design of premium products trumps. Microsoft’s habit of churning out ho-hum stuff. (Not that Apple is safe: Google’s Android phones are starting to kick the iPhone’s butt. But note that Windows Mobile (or is it Windows CE?) phones aren’t even part of the discussion. )

CEO Steve Ballmer used to talk about how much Microsoft listened, listened, LISTENED to customers and to partners and to developers–and he was right. The company famously over-researched every decision. It had charts and graphs an matrices and 8 by 10 glossies to back up each move.

But that listening has been in short supply lately. Ballmer’s kids famously could not use an iPod or an iPhone or Google search. He mock-stomped on an employee’s iPhone during a company rally. Seems to me that a little unofficial field research here might have come in handy.

The world mocked Apple’s iPad naming decision but it generated reams of free publicity as the feminine hygiene product jokes ricocheted around the Web. But “iPad” rolls trippingly off the tongue compared to Microsoft Office SharePoint Server.  Anyone want the soon-to-launch Windows Server 2008 R2 SP 1? Nope. Didn’t think so.

Naysayers once derided Apple’s iPhone as a toy, a lowly “consumer” product. Well, look how many Microsoft insiders and PR people carry iPhones versus the politically correct but underachieving Windows phones. And many of them use iPhones to access Exchange mail.

A few years ago, someone (ahem) wrote that MIcrosoft had become the new IBM, It had morphed into an old-guard, legacy IT provider dedicated to protecting its installed base as opposed to generating new products that people actually wanted to buy. Microsoft’s problem was that people upgraded not because they wanted the new products  but because they had to stay legal.

Talk of customer satisfaction faded away. Without knowing the facts of Microsoft’s patent infringement suit against Salesforce.com, you got to think this is a company that is becoming more prone to litigate than to innovate.

A long-time Microsoft Gold partner was disheartened by a recent meeting at Microsoft’s regional office. In the past, such confabs were full of over-the-top talk about “delighting” the customer, about customer service, about providing value.  The verbiage about innovation often verged on the nauseating, but at least there was some acknowledgement of the need to pay lip service to customer service. This time, he confided, it was all about selling stuff, and not stuff people wanted or needed. “It sounded like Glengarry Glen Ross in there.”

Don’t get him wrong: He wants to sell stuff. But he wants to sell stuff that customers actually have enthuiasm for, not something that they have to swallow as part of a rather distasteful Enterprise Agreement.

Microsoft is very much in trouble.

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