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coping with ipodicide – product development, microsoft style

Picture the scene. You’re wearing your fashionable sweater and expensive leather jacket one evening, and you’re walking along a side-street in Seattle. All of a sudden, a dorky-looking middle-aged guy wearing docker trousers, a green jumper and metal-framed aviator glasses steps out and challenges you.

You’re not expecting it, but he proceeds to hit you. It hurts more than you expected. Before you know it, you’re down on your knees.

Then you notice a bald guy stepping out of the shadows behind the first guy. He starts kicking you as you lie on the ground. As they leave, they call an ambulance from a hospital called ‘The Department of Justice Anti-Trust Division’, but you know it’s too late. You might just survive, but you will probably be crippled for the rest of your miserable life.

That’s what’s going to happen to the iPod. Luke Hutteman writes about Microsoft’s answer to the popular Apple product. It’s the typical old Microsoft strategy again. A big, more complicated application than the original.

Every time, Microsoft does it. With their word processor, with their Windows-based operating system, with their handheld/mobile phone OS, and now with their iPod clone.

Microsoft always designs something that is more complicated than the original they are copying. There are always more features, but as a result of adding all this extra stuff, they always lose some of the utility and simplicity of the original.

But despite this, Microsoft always succeed in the end at becoming the dominant player in the marketplace. Even the previously loyal customers of the original quietly sneak away to join the Microsoft camp in the end.

There are a couple of reasons why the mass-market ends up endorsing the MS product rather than the older, simpler product which Microsoft copied.

1. Microsoft’s product often ends up cheaper, because it has (indirect) access to far wider manufacturing resources than bit-players like Apple or Palm. For example, even though Palm devices are much simpler from a hardware point of view than the corresponding MS PocketPC products, the cost to the end-user is pretty much comparable.

2. Microsoft’s product always integrates better than other products with the most popular operating system in the world.

3. Microsoft’s product always matures with more features than the competition. The reason this happens is that they go out to the market earlier with a more feature-laden productthan the competitor, even though those extra features are not completely ready for prime-time.

Within a few years, however, the hardware and software has matured to provide the new features reasonably gracefully. At that point, the Microsoft product has clear qualitative advantages over the competitor, and Microsoft begins to get the upper hand.

So say you wanted to launch a mass-market product and win against Microsoft, how would you do it?

1. Load on those features. Find some way to develop new features as fast as Microsoft, and get them out there, even if they don’t quite work. Open source might be a good way of doing this. But don’t forget to integrate like crazy with Microsoft operating systems and applications. Microsoft has actually made this a lot easier for you with component-based architectures like .NET. Hoiwever, you do have to invest the cash in learning and exploiting these technologies.

2. For hardware, get ready to cut your manufacturing cost. Realistically, you’ll need to be able to go down to under half of what Microsoft can manufacture for, at least on budget models. If it is impossible for Microsoft (and it’s friends Dell, HP and so on) to build a similar device with a Microsoft OS on-board at a competitive price, you will at least make life difficult for Microsoft, and they may leave you alone for a while.

3. Find some way to protect your IPR. Otherwise Microsoft will just copy you. Use patents, copyright, trade secrets, whatever. This is no time for being proud.

4. Plan forward. Don’t just focus on your next great release. Think about what you’re going to do to win the market four years from now. (Microsoft doesn’t even care whether their first release works out in the market. It’s the medium- and long-term they are after.)

5. Most of all, plan on the mass-market. The latte-drinking Mac-user crowd might look nice in ads, but they aren’t gonna be able to save you if Microsoft come onto your turf. You have to be focused on the ordinary middle-American computer user if you want to win. Think Kansas. Think Soccer Mom. Those are the people who you need to buy use your product.

Because if you have a good computer or Internet-related product with mass-market potential, and you don’t do these things, you can be certain that you’ll end up as an ambulance-job in Seattle somewhere in four or five years time.

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