10 Things Microsoft Can Do to Redefine Itself

by Don Reisinger

Apple has become the company of innovation in the tech industry. As every other firm stays content to offer iterative updates to current devices, Apple has not. Instead, it has delivered products that set new standards in the markets it competes in. Microsoft needs to follow suit. For too long, the software giant has been fine with nominal upgrades that do nothing to excite consumers and make them think twice about buying an Apple product. If it can be more innovative, Microsoft can replace Apple as the go-to company for neat new products.

Microsoft is a software company. And although it has done some nice things on the Web, like Bing, it’s not enough. Microsoft should realize that the Web is the future. And in order for it to stay relevant in that increasingly competitive market, it needs to focus its efforts there. That doesn’t necessarily mean that Microsoft should become Google. But it does mean that the company needs to start its transition to the Web now before it’s too late.

This option might be one of the most controversial decisions Microsoft would ever make, but the company should consider going open source. Of course, the chances of that happening anytime soon seem slim, but it could do wonders for its standing in the industry. Right now, Microsoft is viewed as the Goliath that wants nothing more than to cripple every other operating system and software package that competes with its services. But that’s not proving to be helping it. And considering the market is increasingly turning to open-source software, it might only be a matter of time before Microsoft is dragged, kicking and screaming, to opening up Windows and its other software. Why not pre-empt that and look better for it?

If Microsoft has done anything right over the past few years, it was its decision to build out its entertainment division. The company’s Xbox 360 is arguably the best console on the market today. And although the Zune HD hasn’t been able to attract as many customers as Apple’s iPod, it’s a fine product that does a fantastic job at delivering high-quality entertainment to consumers. Maybe Microsoft can build upon that. Rather than spend its time worrying about Google, Microsoft can become a standout entertainment company. It certainly has the size and cash to pull it off. Now it just needs the desire.

Microsoft has dabbled in social networks over the past few years. The most notable move to go social was its investment in Facebook, and the subsequent advertising work it did with the social network. But since then, it hasn’t done enough. Google, on the other hand, has come up with its own social network. Although Microsoft probably shouldn’t develop its own social network, it needs to make a better effort of becoming a player in that space. Social networking is the current craze and it has a good chance of becoming a centerpiece on the Web for the foreseeable future. Microsoft must be a part of that if it truly wants to redefine itself.

For years, Microsoft has been battling it out with Apple, even though its Windows market share has remained relatively unchanged. As much as Apple wants to force the issue and pretend like it’s a major competitor to Microsoft, it really isn’t. Now it’s time for Microsoft to realize that. Admittedly, it will be difficult. Bill Gates has never been fond of Apple, and Steve Ballmer has taken on the role of Gates since his departure. But they need to learn to move on. Yes, Apple is a wildly successful company. But it’s not nearly as major of a threat to Microsoft’s bottom line as other competitors in the industry. It’s time Microsoft remembers that.

Microsoft’s corporate culture dictates that the company develops software and works with other firms to bring that software to devices. For years, it has worked. But it might not be the best strategy in every market Microsoft gets itself into. For example, Microsoft’s entertainment successes with the Zune HD and the Xbox 360 are all the company’s doing. It has proven time and again that if it needs to develop hardware, it can do it well. It should consider such a move in the mobile industry. Microsoft should also find ways to create hardware (such as a tablet) that could compete better than the devices its partners come up with. Microsoft can be a hardware company. It just needs to believe it.

Security has been a thorn in Microsoft’s side for more than a decade. And although it has made strides in its security work, the company still has a long way to go. Realizing that, it should attempt to redefine itself as a security juggernaut. Microsoft’s security woes are perhaps the biggest issue the company faces. And as it offers more security updates, it’s doing little to help its cause. Microsoft should try to redefine itself as the go-to security company in the marketplace. If it can, the new strategy could do wonders for its software sales.

There’s little debating that Bill Gates and Steve Ballmer have been wildly successful CEOs. But that doesn’t mean that their opinions on the way the tech industry works should be held in such high regard indefinitely. Microsoft is still the same company it was five years ago, 10 years ago and even 20 years ago. That needs to stop. Microsoft is now the elder statesmen in today’s industry and there is little the company can do to stop that unless it starts easing the old guard, including Ballmer, aside. It won’t be easy, and it will come with some fallout. But some fresh ideas are needed.

If Apple is good at anything, it’s making technology more than just an industry that shows off new gadgets. It makes tech a spectacle that develops a fan base and makes consumers think twice about buying other products. The iPod, iPhone and iPad might just be gadgets, but they mean more than that to consumers. Microsoft needs to find a way to achieve similar results with its products. Apple has done wonders for its business by making even the smallest updates look like the biggest things in the business. Microsoft hasn’t. But it should.