Microsoft continues to be an industry leader, generating healthy profits from sales of its Windows operating system and productivity software, such as Office. But Microsoft could learn a lesson from BlackBerry's ongoing problems.
At its recent BlackBerry World conference in Orlando, BlackBerry announced that BlackBerry Messenger (BBM) will soon be available as a free app for both iOS and Android smartphones. While the news was arguably one of the highlights of the event, its timing was nonetheless too little, too late. What would have been seen as a brilliant tactical move two or three years ago is viewed today as desperate act with little chance of making a difference.
BBM is a defining feature of the BlackBerry mobile platform. There was a time when it was one of the most coveted features of BlackBerry smartphones. But keeping the software exclusive was not enough of an attraction to keep customers from defecting to iPhone and Android smartphones.
Instead, new messaging services like WhatsApp and Facebook Messenger exploded on those iOS and Android platforms and now eclipse BBM. At this point, WhatsApp has more than three times as many users as BBM, and Facebook Messenger has nearly 12 times as many users—and those are just two examples from a crowded selection of messaging apps. The ship has sailed when it comes to demand for BBM.
The lesson for Microsoft is that using a popular product as a carrot to coerce customers to adopt a less popular product doesn’t work. Customers simply move on and find alternatives that fit their needs.
While Microsoft Office is the de facto productivity suite, it is slowly losing market share as competing suites gain traction. Microsoft offers its Office suite for Windows and for Apple's OS X operating system for the Mac, but Google Docs, Open Office, Libre Office, and other suites offer similar features and capabilities in productivity tools that work on those platforms as well as Linux. Docs to Go, QuickOffice and Apple’s iWork apps (Pages, Numbers, and Keynote), meanwhile, fill the void on the iOS and Android platforms..
On the traditional PC front, Microsoft has little to worry about. Windows still has greater than 90 percent market share, and Apple's OS X owns another 7 percent. The problem is that the personal computer market is shrinking rapidly while the mobile device market is exploding. And Office runs on just a tiny fraction of mobile devices.
It makes sense for Microsoft to use Office to add value to Windows Phone, Windows RT, and tablets and hybrids running Windows 8. But the availability of Office—or the lack thereof—won't sway a purchase decision one way or the other. Businesses won't decide against buying Android or iOS devices if they think those platforms will suit their needs best. If Office isn't available, they'll find apps for those devices to take its place. In this way, Office could be rendered irrelevant as the demand for traditional PCs plummets.
Microsoft needs to learn from BlackBerry. Hubris is deadly, and extortion will always backfire. The way to maintain dominance and relevance is to ensure customers continue to rely on your products and services no matter what platform they choose.