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By | Matt Asay 24th May 2011 20:27

Dear Dell and Microsoft: You're not Apple

DNA transplant not an option

Open...and Shut Dell has always been a first-class choice for budget-minded CIOs. The company grew to prominence by shaving everything – including R&D costs – from the bill of materials for its utilitarian, corporate machines. Today, despite four years of attempts to invigorate its brand with consumers, Dell remains a consumer-computing laggard, even as its enterprise business has revived.

Dell's response has been to suggest it never cared much about the consumer market – but its actions belie this argument. Dell's founder and CEO Michael Dell claims that he "didn't see [disappointing sales of Dell's Streak tablet] coming." But everyone else did.

Why? Because Dell isn't a consumer company – and arguably never will be. "Consumer" isn't in Dell's DNA.

Microsoft has also struggled with this problem. I've long argued that Microsoft, despite its exceptional performance in the enterprise market, should not pretend to be relevant in the consumer market. And yet Microsoft keeps trying, to the point that now the company is trying to hire a "Consumer Demand Generation Manager".

Microsoft is, of course, better at consumer products than Dell. Think XBox. Or Kinect. But the heart of Microsoft isn't the XBox. It's Office. It's Windows.

That's why there's often something missing from Microsoft's consumer-facing products such as the Zune: they first have to run the gauntlet of the Office and Windows product managers. They have to "look like" Microsoft's past successes. Those that evade this process, as the Kinect team did, can end up with winning products.

In the past I've suggested that enterprise companies such as Dell and Microsoft get over their infatuation with the consumer market and focus instead on owning the enterprise market. No, enterprise software is not sexy. But massive margins are. As 37Signals' Matt Linderman declares,

We can't all love the products we work with. Someone has to do the jobs and sell the things that don't seem sexy but make the world go round.

Unfortunately, this is only mostly true. Where this sentiment parts with reality is that consumers and consumer technology now increasingly influence the purchasing of enterprise technology. This is perhaps most conspicuous in mobile technology, but it's happening in software, as well.

So what should Dell do? It shouldn't abandon its DNA, which translates into high-volume, low-cost hardware. But perhaps it needs to think about how to sidestep Apple in the market. Apple is not a mass-market brand, the iPod excepted. Apple is a premium brand, and will never sacrifice its margins to compete in low-end, mass-market devices.

A work associate told me that Amazon's Jeff Bezos focuses relentlessly on pursuing low-margin, high-volume markets that no one else wants, because they can't compete with Amazon's efficiency. Dell can do the same. Instead of trying to ape Apple as a premium brand, it can churn out hardware that Apple won't care to follow.

For Microsoft's part, it has a lot more consumer DNA, even if it has been waning over the past few years. But Microsoft, too, must play to its strengths. No one knows personal productivity software better than Microsoft. So why aren't we seeing that expertise translated into devices and associated software?

And why is a company that has in the past built a truly great browsing experience allowed its internet expertise to languish? In terms of the pace of market adoption, Microsoft has been surpassed by Mozilla Firefox and Google Chrome in the browser wars. If Microsoft wants to be relevant with consumers, it should start by building a truly great browsing experience.

And by the way, that browsing experience needs to work on more than Windows. It should work on Mac OS X, iOS, Android, and so on.

Apple has succeeded by staying true to its consumer roots. IBM has succeeded by staying true to its enterprise roots. Dell and Microsoft need to bring their own DNA to the consumer market, stop playing copycat, and focus on building software and hardware experiences that are true to their respective DNA. ®

Matt Asay is senior vice president of business development at Strobe, a startup that offers an open source framework for building mobile apps. He was formerly chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfreso's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears twice a week on The Register.

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