Why Microsoft Shareholders Should be Very Concerned

This weeks Partner’s con­fer­ence has once again exposed Microsoft’s com­plete lack of any cred­i­ble con­sumer strat­egy. On the one hand Ballmer claims he’s going to leave no “stone unturned” com­pet­ing with Apple. Yet on the same day he also states that Microsoft’s own Win­dows 8 hard­ware “Sur­face is just a design point.” Note to Steve: Those are two mutu­ally incom­pat­i­ble objectives.

If Ballmer really is seri­ous about com­pet­ing with Apple then Microsoft will need to con­trol its own hard­ware des­tiny — in pcs, tablets and smart­phones — and be com­pletely com­mit­ted to that strat­egy. Unfor­tu­nately that will also require a will­ing­ness to throw the OEM part­ner com­mu­nity under the bus. Pro­tect­ing OEMs while aggres­sively com­pet­ing with Apple are incom­pat­i­ble strate­gies. A text­book case of the Inno­va­tors dilemma.

Share­hold­ers are likely to pay a very high price if Ballmer con­tin­ues to believe the fan­tasy that he can accom­plish both these com­pet­ing objec­tives and still be suc­cess­ful in the con­sumer business.