back to article Confidential Microsoft brief: 'We're TOAST if we fight Google on price'

A competitive strategist at Microsoft has told cloudy partners that competing with Google on price is proving to be commercial suicide, particularly in industries where firms are under financial constraint. The confession was made at a breakout session at the Worldwide Partner Conference, which Microsoft plainly didn't intend …

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  1. Steve Davies 3 Silver badge

    Well doh!

    Quote

    She said Google offers a "one size fits all model" including two SKUS, "whereas we have a whole host of complex SKUs, it is dizzying … but it meets the flexibility of businesses to meet their needs".

    In the words of those TV Meerkats

    Simples!

    How many Channel Partners even half understand the bewildering SKU's in the price book? Woe betide any company who in good faith (and on the advice of the reseller) buys the wrong SKU's when those nice guys from 'FAST' pop around for an audit.

    MS really need to simplify their pricing structure.(honest Guv1)

    1. Anonymous Coward
      Anonymous Coward

      Re: Well doh!

      Totally agree. Even our licensing guys usally have to go to MS to work it out...and even then, you get different answers depending on who you speak to there.

      1. Anonymous Coward
        Anonymous Coward

        M$ own worst enemy.

        The problem with M$ is they have spent years screwing over the customer. You can be perfectly legal and then their Audit teams will swoop in declare some technicality and revoke your licenses demanding you purchase all the latest version.

        When you treat customers this poorly is it any wonder google makes gains when most of their stuff has a low cost entry point?

      2. Oninoshiko
        Thumb Up

        Re: Well doh!

        "Totally agree. Even our licensing guys usally have to go to MS to work it out...and even then, you get different answers depending on who you speak to there."

        Absolutely! There aren't many things I lothe more then dealing with MS licensing. Honestly, if I had the choice to never deal with them again, or never deal with the taxman again.... I think I would hug the taxman.

    2. Anonymous Coward
      Windows

      @Steve

      "MS really need to simplify their pricing structure.(honest Guv1)"

      True. My (small!) company is a Microsoft reseller and although you get access to some kind of information regarding licenses more than often even we can't easily work out which license we need to get for our customer.

      If you think you're confused then rest assured; it's even worse if you got access to the whole collection of available licenses. Sometimes we and the import company ('vendor'?) couldn't even work it out.

      Still, I suppose Microsoft is trying to handle this by pushing their subscription model forwards. I just don't think that's the right way to do it.

    3. Anonymous Coward
      Anonymous Coward

      Re: Well doh!

      A confusing price strategy is one way of locking a customer in, the customer will think it must be difficult to change so they stay with the incumbent provider. At least until the customer realises that this isn't the case, then they move as soon as they can, so it's a risky strategy.

    4. Zippy's Sausage Factory
      Trollface

      Re: Well doh!

      Reminds me of DEC. And we all know how well that worked out for them...

  2. Flocke Kroes Silver badge

    The other way to compete on price ...

    ... make yours bigger than anyone else's. Looks like Microsoft's strategy is to leave any price sensitive markets and aim for where money is no object. Soon Gartner will be boasting to governments that Windows has the highest TCO. Give it a decade, and Windows dev's will be charging £1000/hour just to cover the rental costs of an Azure IDE one seat license.

    1. Anonymous Coward
      Anonymous Coward

      Re: The other way to compete on price ...

      Yes, either compete with a high price (and maybe add value, perceived or otherwise, eg Mercedes, Rolls-Royce motor cars) or join the race to the bottom with the lowest price. Microsoft want to stay out of the latter for as long as possible.

  3. chivo243 Silver badge

    Extras?? We just needed an internet connection

    ...."We all know from experience … with Google Apps you can often have to add a lot of different third party appliances just to get to parity with the experience and then all of a sudden you've got lots of vendors to manage and all of a sudden it's very different to that low cost price point that Google initially positioned to the customer."

    The school I work in has implemented Google Apps, and I don't recall needing any third part appliance, or vendor, just one of our Tech Teachers has been Google Certified as a Google Admin.... Not sure what businesses have to add to their networks to use G-apps....

    1. Paul Shirley

      Re: Extras?? We just needed an internet connection

      I'll translate for you: 'parity of experience' -> 'match the bloatware you'll never use but we insist on bundling'

      Google also bundle a lot of crap you probably don't want (like a free + account with every product) but the difference is they don't charge you for it and it's different crap.

    2. Anonymous Coward
      Anonymous Coward

      Re: Extras?? We just needed an internet connection

      Did Google agree to not use your students as advertising information sources? Do Google advertise at them?

      Were I a parent, I'd be pretty narked if my kids school was using services which used my Childrens' behaviours as a source for targeted advertising. I am aware of a few Schools/Unis that this has been a make or break factor in Cloud service deals.

      1. Paul Shirley

        Re: Extras?? We just needed an internet connection

        They don't serve ads to "faculty, staff, or students" on Education versions. Can't comment on whether they trawl the content.

        1. Anonymous Coward
          Anonymous Coward

          Re: Extras?? We just needed an internet connection

          Do they trawl content? we'll find out thanks to the class action lawsuit... http://www.law360.com/articles/437583/google-faces-1b-class-action-over-college-email-snooping

      2. Anonymous Coward
        Anonymous Coward

        Re: Extras?? We just needed an internet connection

        In Ontario everyone uses google, blogger etc but the Education Department is paying some croney company for vaporware which is not used all. So the result is that kids and teachers do recv ads, while we're all paying Company X for no service at Mercedes prices when they could've bought Google 4 Education at bicycle prices.

      3. gnufrontier

        Re: Extras?? We just needed an internet connection

        Goggle advertising is way less in your face than what they see on television. They can't escape being targeted. Tell them not click on the ad links.

      4. Levente Szileszky
        FAIL

        Re: Extras?? We just needed an internet connection

        Then you MUST BE PISSED AS HELL by Microsoft's hyperventilating enthusiasm for giving DIRECT ACCEESS to the NSA in SkyDrive, Skype (incl real-time VIDEO!), emails, chat, documents, photos, Bing search history, EVERYTHING MICROSOFT OFFERS: http://www.theregister.co.uk/2013/07/11/snowden_leak_shows_microsoft_added_outlookencryption_backdoor_for_feds/

        You ARE pissed, right, (MSFT) Anonymous Coward... RIGHT?>

  4. Anonymous Coward
    Anonymous Coward

    Why would anyone pay to give the NSA a backdoor?

    The bigger question is why would anyone pay anyone to put a backdoor for the NSA into their system?

    1. BillG Silver badge
      Happy

      Re: Why would anyone pay to give the NSA a backdoor?

      Would you rather pay nothing and give Google a back door into everything?

      1. Anonymous Coward
        Anonymous Coward

        @BillG - Re: Why would anyone pay to give the NSA a backdoor?

        I know what you mean but if you pay Microsoft, will you be exempted from NSA snooping ? You're backdoored no matter if you pay for it or not so why chose Microsoft, please tell us ?

  5. AndrueC Silver badge
    Joke

    spends most of her time locked in dark rooms in Redmond

    Microsoft are so hard up that they can't afford to provide lighting?

    1. apjanes
      Joke

      "Microsoft are so hard up that they can't afford to provide lighting?", no it's called solitary confinement for crimes against humanity :P

  6. Trevor_Pott Gold badge
    Pint

    One out of Microsoft's clutches you're unlikely to go back...and it's the licensing that's the bitter pill driving people away. Oh...and Price Matters.

    It is of interest to me how when I have been saying the same damned thing for years I'm the crazy whackjob. Now, suddenly, the light goes off and it's time to cope with the things I've been bellyaching about from the start.

    Beer, because it's nice to see someone has finally obtained clue at MS. Even if it is only one clue amongst many required.

  7. BobChip
    Holmes

    First and foremost, it's the price that matters

    This has been on the cards for the last five years or more. Microsoft products, both OSs and applications, are way over priced for what they offer. For example, MS Office may offer advantages over Libre Office for some users, but for a huge number of SMEs the cost is just too high. And now MS want you to pay on a subscription basis as well!

    Google Apps and services may not be free, but they are one hell of a lot cheaper than MS's alternatives. Libre Office is of course free, and just how do you compete with free? There is almost certainly a huge market for a really cheap, basic version of MS Office, with only the roughly 10% of functionallity that the vast majority of users require. But I doubt if the money grabbing culture in MS would allow them to consider this strategy for one moment.

    Time to sell your MS stock, I suspect.

    1. Trevor_Pott Gold badge

      Re: First and foremost, it's the price that matters

      You compete with free by offering something that "free" rarely does.

      Convenience, ease-of-use, feature richness, compatibility, speed, heterogeneity (cross-platform support, format support, etc), deep integration with other products, security, a strong/supportive/well resourced community...there are plenty of ways to compete with "free."

      Unfortunately, Microsoft seem to have no interest in anything except "feature richness" and "deep integration with other products."

    2. dogged

      Re: First and foremost, it's the price that matters

      Pimps Libre Office - check.

      Big fat downer on MS - check.

      Comments on all Microsoft-related stories saying they are doomed - check.

      Pimps linux mint - nope, not yet.

      It may not be Eadon but it looks feasible.

      MS are in a hole of their own making with licensing. They have three models -

      1. Free. And usually genuinely free without regarding you as product to be sold for ad money, which is quite a pleasant change.

      2. Insanely expensive.

      3. So bewildering that nobody can actually figure out what the cost is.

      To be fair, the insanely expensive model doesn't quite reach Oracle levels of obscenity but it's close. The middle SKUs needs to go, though. Now.

  8. Omgwtfbbqtime Silver badge
    Facepalm

    Guess they'll have to compete on security or quality....

    ...oh dear....

    1. Tomato42 Silver badge
      Facepalm

      Re: Guess they'll have to compete on security or quality....

      and they are pushing Orffice365...

      good luck for them, they'll need it, a lot of it

  9. IGnatius T Foobar
    FAIL

    Microsoft FAIL

    with Google Apps you can often have to add a lot of different third party appliances just to get to parity with the experience

    There they go again with the "experience" rhetoric. Is that really the way they think in Redmond? Users aren't looking for an "experience." They just want to fire up the spreadsheet and look and next quarter's sales figures. They just want to open a blank screen and write a memo about how we're using the new cover sheets on the TPS reports. They just want the damn email and calendar to work, every time, instead of falling over every time someone breathes on it.

    The only places Microsoft is scoring customer wins are the places where some stodgy old IT director has been buying Microsoft for the last 20 years and hasn't gotten the news that the world is moving on.

    1. Anonymous Coward
      Anonymous Coward

      Re: Microsoft FAIL

      Watch out with your CAPS, mate! Using capital letters when speaking of Microsoft might get you banned from this forum. It already happened if I remember correctly.

      1. Anonymous Coward
        Anonymous Coward

        Re: Microsoft FAIL

        Aww, Eadon you have a new account and you're posting AC?

        You got banned for repeatedly trolling all over the forums and accusing the Reg's Journos of corruption, do you not remember? Nothing to do with posting caps.

    2. majorursa
      Facepalm

      Re: Microsoft FAIL

      Agreed, anyone using the 'user experience' term again should be fired. Btw. saw it in some Ubuntu press releases too lately. To me it's a sure sign they hired the wrong people.

      1. Anonymous Coward
        Anonymous Coward

        Re: "user experience", Ubuntu

        "To me it's a sure sign they hired the wrong people."

        To quite a few people here, the last few years observing Ubuntu focusing on shiny at the expense of usable is a sure sign they hired the wrong people.

  10. Anonymous Coward
    Anonymous Coward

    Googles unofficial spokesperson - Nelson Muntz, says:

    Haw haw!

  11. This post has been deleted by its author

  12. Giles Jones Gold badge

    They're toast anyway simply because they can't create their own ideas any more.

    Windows Phone strategy is just "Do what Apple do", so their platform is too restrictive and locked down.

    Tablet computer strategy is "Try to do what Apple have done, but retain some Windows compatibility for enterprise".

    Windows strategy is "Make Windows relevant as a tablet OS, screw the desktop users".

    XBox strategy is "Shoot first, then see what Sony does, then copy Sony".

    Clueless, unoriginal and more u-turns than David Cameron.

  13. Nezumi
    Facepalm

    Welcome to the world of devices and services

    So Microsoft have already conceded that they can't compete in the 2 markets they're betting the business on.

    Devices = Consumer Electronics. Customers buy on price, features and convenience. MS needs to get a lot more realistic about how much Windows is actually worth stop artificial product segmentation. Amazon, Apple and Google are killing them in markets that MS can't even enter due to the cost of Windows. Microsoft also need to start supporting technologies that people actually use OOB, rather than want they want them to use.

    Modern apps are also a joke. You need to be best of breed here. Your current offerings are so poor, they're practically unusable.

    Services = Utilities. Water is water, as is Gas and Leccy. This type of market is very price sensitive and doesn't give a shit about 'added value'. Embrace and extend is finished. MS need to provide *genuine* value, play nice with other technologies (i.e. the rest of the ****ing internet) and change their corporate mindset.

    Balmer needs to decide if MS want's to carry on being Enterprise focused or not. The current Consumer, SOHO and SME offerings aren't good enough and are far too expensive.

    Frankly, I was reasonably positive until they announced XBOX One (and the resulting DRM train-wreck, plus subsequent back down) and killed TechNet. Now I couldn't care less for my personal IT needs. I've gone, I'm not coming back and I'm not alone...

    1. Levente Szileszky
      FAIL

      Re: Welcome to the world of devices and services

      One sentence about Windows App Store and it should tell you everything about their utterly lunatic, twisted world view at MSFT:

      "The app could not be installed, because the windows firewall service is not running, please enable the windows firewall service and try again,"

      I am actually 100% sure there's no other company at this size (multinational enterprise) full of idiots who make these kind of design decisions than MSFT... it's just so FUBAR it's mind-boggling how the hell any good product gets through this incredible layer of incompetent management.

    2. Levente Szileszky
      Thumb Up

      Re: Welcome to the world of devices and services

      "Services = Utilities. Water is water, as is Gas and Leccy. This type of market is very price sensitive and doesn't give a shit about 'added value'. Embrace and extend is finished. MS need to provide *genuine* value, play nice with other technologies (i.e. the rest of the ****ing internet) and change their corporate mindset."

      SOOO TRUE. Other than modern MS-reliant idiots - and while there are LOTS of them, even among young people who never really managed to learn anything else, there are 10 others coming of age every year with no experience with anything MS - in SMB size most of the firms I know (few dozens) already started migrating AWAY from MS, purely because of the abusive, ripoff pricing, reduced feature set/forced upsell in new versions, killed products etc etc.

      Ballmer is a BEANCOUNTER, do not, I repeat, DO NOT EXPECT ANY MEANINGFUL TECHNOLOGY-BASED DECISION FROM HIM - this latest is nothing but a 10-YEAR LATE SHAKEUP, simply to cover up his UTTER INCOMPETENCY, with no new names, lack of strategy, period.

  14. Piro

    Microsoft.

    Maybe you should start actually listening to people.

    They do NOT want a dizzying array of SKUs. They want simple, upfront, easy to understand pricing structures.

    But I fear there's not much to be done now - you have kept killing off goodwill at every turn.

    Technet? Better kill that

    Windows 8? Better ignore all feedback

    Xbox 180? Better flip-flop around with very poor PR and unclear messages

    Windows 8.1? Better toss in advertising results by default into your local searches

    Windows RT? Better make slow devices with almost no applications at an arrogant price point

    Forefront TMG? Who needs a proxy anyway!

    I get it, you like to think you know best, you're attracted by that because it worked for Steve Jobs.

    Well, Ballmer, you're not Steve Jobs, and you need to actually concentrate on the people that have provided the revenue streams so far. Businesses. Don't alienate them by creating toy tablet systems that they have no interest in.

    Don't kill Technet so admins will shrug and probably learn Linux admin instead.

    Don't think that Azure is the only way forward. Maybe some people don't have the certainty in their budgets that allows them to say "yes, we'll keep spending X per month on this, when we used to pay once".

    Offer compelling products at decent prices, but more importantly, look at your customer as if they're at the same level. Stop looking down on the customer. Inertia doesn't last forever, even in such a giant behemoth as Microsoft.

    1. Anonymous Coward
      Anonymous Coward

      Re: Microsoft.

      > They do NOT want a dizzying array of SKUs. They want simple, upfront, easy to understand pricing structures.

      Nail on the head.

      Microsoft was hell bent on making ONE version of Windows, even if it meant hacking together Metro and the Desktop in a way no user could comprehend as logical without even providing the simple option to only install one, or turn either off absolutely.

      Despite this (and the 'ONE' vision Microsoft appear to be pushing lately) it still insisted on a dozen SKUs and pricing models when that is the only thing users actually wanted reducing to a singularity. One that is practical, affordable, easy to understand, unlimited, and infinitely transferable.

      It's almost as if somebody at Microsoft comes up with a good idea for something, then Microsoft manage to take that idea, twist it about and apply it to every area where that idea is actually a terrible one while ignoring where it would actually have benefits for the customers.

      That will be the death of Microsoft.

  15. Tyrion

    Reliance?

    I find it bewildering why companies still use Microsoft software. It's more expensive, incompatible with practically everything else out there, and completely standards non-compliant.

    The only reason I can possibly imagine is that the people making the decisions in these companies are either uninformed, or worse still, rely on M$ software for their jobs.

  16. Anonymous Coward
    Anonymous Coward

    MS is doomed

    They are run by an unsuitable person, are followers, and lack vision for disruptive technologies.

    They need organic innovation because acting like a Borg is a stagnant strategy if they can't also absorb some of the new cultures and genuinely reinvent.MS; they have failed to do this so far!

    MS is boring.

  17. ElectricFox
    Windows

    "Wrestling back a Microsoft splitter is "incredibly painful"

    Indeed, it is painful for the (ex)customer.

  18. Anonymous Coward
    Anonymous Coward

    Look for customers with no 'budget pressure'

    M$ is a typical monopoly at work, just shrink the service until you only serve the most profitable customers. Ballmer created a little Software Soviet Union in Seattle, and gave away the Windows source code to Chinese govt. to better hack us. Lets put together a lynch party before he does any more damage.

  19. Anonymous Coward
    Anonymous Coward

    $msoft , give up

    You'll never get Azure working

  20. Levente Szileszky

    And MSTF also loses on RELIABILITY TRACK RECORD - it's HORRIBLE

    Just Google up BSOP, O365, Hotmail/Outlook etc outages... they are widespread and often lasted for HOURS.

    Google never had a full-on, worldwide, system-wide outage as far as I know. They had limited ones but somehow you could always connect eg if web UI failed then IMAP was working or vica versa.

  21. Onomatopoeia

    Accountants to the rescue...

    Only one word springs to mind here: GREED!

  22. Anonymous Coward
    Anonymous Coward

    "whereas we have a whole host of complex SKUs, it is dizzying … but it meets the flexibility of businesses to meet their needs".

    Which businesses, and which needs? I think you'll find all of your customers would be happy with one license (with some volume discount perhaps) and price book structure.

    The real translation of this: it enables us to screw every last penny out of customers for what is the same software in all cases, but a whole host of petty and complex licensing restrictions which exist for no particularly good reason other than to nickel and dime all of the loose change from our customer's pockets ...

  23. Anonymous Coward
    Facepalm

    Blame Google ..

    Allow me to translate this into standard English: Google is to blame for us going round channel partners and buying out-right their end customer accounts. If Google did this then we would accuse them of swiping your (really ours) accounts.

    "We are awaiting comment from Google".

    Google should of course in response to these prevarications from Redmond, say nothing at all.

  24. Anonymous Coward
    Anonymous Coward

    "...the areas where Microsoft feels it is losing to Google Apps"

    Won't be lessened by the indecent haste with which MS pre-emptively embedded its tongue in the NSA's rear. Google might be playing ball, but it looks a lot less like its enjoying it; more relevant, I suspect, in Europe.

  25. phaelanx

    Problems with Google Apps and Office 2013

    Since Office 2013 was released, unless you have the 'MSI' version (meaning a Volume License version), Google Apps Sync refuses to work. Google recently announced that Outlook 2013 was supported by their sync program but again, this excludes Click2Run versions. This means all OEM and Retail copies of Office 2013 just plain won't work with google apps.

    If you are tired of waiting for Click2Run support by Google Apps Sync for Microsoft Outlook (GASMO), there is a solution because we wrote one. Our software will install GASMO and create your email profile so that it works once more.

    The current version of our software (1.0) creates the profile, but does not add delegate accounts or support command line options. These features are planned for a future release. While we would like to give this software away for free, we spent so long on reverse engineering GASMO and creating a fix that this just isn't a possibility.

    http://syncfix.ccp.com.au/

    Regards,

    Lee

  26. Vince

    Personally I think Microsoft is toast if it keeps competing against it's own partners.

    You know, the ones who are responsible for promoting and implementing what it does. If they think they can just "go direct" and just do Office 365 and ditch partners (and in the interim offering silly "incentives" which will ultimately cut them out), they'll find out that they will also lose out.

    Those partners aren't gonna want to go out of business, so they'll be lining up alternative propositions and it's not difficult to make more compelling services than MS offer that appeal to the very people those partners have expert knowledge of.

    Smells of fail over in that cloud.

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