The retreat from consumer products


My nephew started university last year and his parents bought him a laptop that came with Microsoft WIndows. They didn’t buy a Surface Laptop or a Surface Book because they were way out of their budget. Instead they were directed to the HP and Lenovo devices.

For my brother and nephew Windows comes “free” with the laptop. Rather like 4 wheels and an engine come as standard with a car purchase. He bought a student version of Office on the university website. I advised him to do this when he asked me how to get Word and Excel. From his perspective he bought a 4 year license from the university. His iPhone uses Spotify for music at a student discount. His student discount app is only available on iPhone and android. 

As a normal consumer the Microsoft brand barely exists. 

While it is true that Wall Street loves Microsoft’s strategy on enterprise, cloud, AI, etc it is also true that none of these things is very visible. Abandoning consumer products and mobile results in lack of visibility. There is nothing wrong with that. Oracle are a huge business invisible to consumers. IBM is a business service company. 

Back in the 1980s Bill Gates’ vision was a PC on every desk. That was business and consumer. With 90%+ of the PC market you could say the vision statement worked. Ballmer’s “cloud first, mobile first” less so. Nadella says “intelligent cloud, intelligent edge” and no one has a clue what “success” looks like even if it happens. 

For those of us that consumed Microsoft services over the years we are now consuming less. However the companies we work for are probably consuming more. 

What is going to be interesting is watching how Microsoft is being followed in the media. The year 2017 is probably the year that Microsoft will have abandoned consumer products – with the single exception of gamers. The year 2018 will be the year that websites covering the Microsoft space will either change to more general consumer technology or alternatively become enterprise news websites. Neither is a bad thing.  It will just be interesting to observe.

Comments (39)

39 responses to “The retreat from consumer products”

  1. bunchel

    ”cloud first, mobile first” was Nadella. It is an Eastern way of thinking. However, we in the West figured out that two things can’t be first at the same time. Even baseball figured out that the runner can’t be both safe and out at first base at the same time.

    ”intelligent cloud, intelligent edge”. I have yet to see a cloud or edge with intelligence. It may sound edgy, but the forecast for consumer products seems cloudy.

    And where is the consumer in either statement? I don’t see them. What I do see is abandoned consumer products and abandoned consumers. How about “ consumer products abandoned, consumers abandoned”.

    My Zune HD was great...abandoned. My Windows phone was great...abandoned. My Band 2 was great (except for the band tearing twice, which could have be fixed with a different physical design)... abandoned. The Zune/XBOX/Groove/whatever Music was great (except no Family plan, which should have been corrected) was great....abandoned. I believe this was a lack of interest, commitment, and proper marketing by Nadella.

    Reluctantly, Nadella lost me as a consumer. Now, instead of seeking out MS products, I deliberately (as deliberate as Nadella’s action or inaction), look for alternative products. Quite frankly, I don’t think the alternatives are as good, but I need a company with a leader that demonstrates I can rely on them and their products . Nadella has demonstrated the opposite. I am unlikely to change my position about this as long as Nadella is at the helm. “Consumer abandoned, Company abandoned”.

    So for about a year now, it has been goodbye to MS consumer products. Maybe they will earn me back someday, but it will be a difficult sell. And it is unlikely to come from anyone who tries to tell me two things can be first. Good luck.

  2. MutualCore

    I hear lots of moaning about the consumer-side cancellations. However were any of them super successful when cancelled? Groove Music Pass had virtually no subscribers. Band sold maybe 50K units? Windows Phone sold millions of cheapo glorified feature phones. The premium ones like Lumia 920/930/1020 never sold in volume. Microsoft is correct in cancellation products that clearly failed due to either bad design or non-market response. TBH, none of these were 'great' in the way Apple products are. The most successful consumer brand for them is XBox and even that is now withering on the vine due to mismanagement.

    • Lauren Glenn

      In reply to MutualCore:

      I tried Groove music pass but it was still not as good as Zune with their 10 free credits per month w/ subscription. Also, any new music I wanted was never available on the day of release except for MAYBE a week or two later. I just stopped subscribing because I couldn't hear any music I wanted to hear. And it wasn't even odd indie bands. Bands like Megadeth, Anthrax, Iron Maiden, Dream Theater..... their releases would show up in the store maybe a month after it came out.

    • hrlngrv

      In reply to MutualCore:

      Never fully understood Band. It didn't run Windows, rather its own specific firmware. Maybe it was meant to feed data to Windows phones and PCs. It seems MSFT's marketing people grossly overestimated demand.

      • PurpleDisciple

        In reply to hrlngrv:

        Well, it was half baked in that there wasn't enough development into turning it into a life companion in the same vein as Apple Watch. That, if successful, then generates unexpected ecosystems of it's own.

        This is the main problem that Microsoft has. They don't follow up, so an ecosystem never develops around their product. Thus we end up with isolated islands instead of joined up products.

        I've recently made the move to using Apple on a daily basis and the ecosystem message really gets hammered home to me. Microsoft almost had it - a V1.0 - with WP and Band, but again, it was abandoned after many wasted opportunities caused by thrashing around with no clear focus.

        Right now I need Microsoft for three things on the front end: Excel, Outlook and OneNote. Everything else for work, I have viable (and superior in most cases) replacements for - and re: OneNote, it's because I haven't really explored Evernote (or purely iOS software) recently. I think I should.

    • wright_is

      In reply to MutualCore:

      One of the biggest problems Microsoft has, is that they can never successfully market these products, whether they are good or not, or they give up too quicky. Just look at Zune, Band and Cortana for Android/iOS, they never really caught on in America, yet there has been a lot of talk from abroad about people wanting to use the products, but they never get released outside the USA, before being quietly killed - maybe Cortana will be an exception...

      Zune is an interesting, it was only sold in the USA, yet it was declared as a failure, because it only sold in low volumes, compared to 10s of millions of iPods... WORLD WIDE! So it was a failure... It was cancelled before they even tried to sell it properly!

      Windows Phone is similar, although the other way round. It was sold world wide, sold better in many markets than the iPhone (in Germany it had a market share in the high teens, the iPhone has market share in the mid teens), but it didn't sell well in the USA, so it was a failure and cancelled. They didn't try and play on their strengths or the loyalty of users outside the USA, but gave up instead.

      • hrlngrv

        In reply to wright_is:

        Re Groove, did it inherit Zune's royalties schedule for payments to content rights owners? If so, it's possible the terms put MSFT at a disadvantage compared to Spotify, Apple and Google services, etc., and if so every content rights owner would have been ready to fleece MSFT if MSFT sought to renegotiate terms. IOW, MSFT may have locked itself into deals which may have made sense in the 2000s when it was still trying to sell Zune music players to compete against Apple iPods, but Apple because dominant and could negotiate better terms while MSFT was locked in and almost certain to be stuck with worse terms if content rights owners sensed MSFT was desperate to compete against Apple at any cost.

        IOW, MSFT may have been too early in this case, unsuccessful, and their potential business partners sensed MSFT was vulnerable and so ripe for the pickings. Karma is a bitch, and MSFT is only just beginning to pay off the balance it accumulated in the 1990s.

  3. wshwe

    The fact of the matter is that the market could only support 2 phone platforms. Blackberry, WebOS and Windows Phone all fell by the wayside.

    The market can only support a limited number of streaming music services. Was Groove Music ever available on anything other than Microsoft platforms? Even Apple Music has an Android app. It's certainly not a great app, but it gets the job done.

    • wright_is

      In reply to wshwe:

      Groove was available on Android and iOS... But it was too little, too late, to make a realistic challenge. I still use Groove on Android for my music, but I never subscribed to the music pass - that said, I have never subscribed to any other music streaming service either.

      • Lauren Glenn

        In reply to wright_is:

        Yes and what they did offer was a phone version that didn't really work with OneDrive to store your music. And even with the abandoning of the Groove Music store (which is internally still called Zune in the OS), I can't get it to work with OneDrive music stored there. None of the music show up and even if any of it did, some of my music is FLAC which is not supported by cloud in Groove for some reason. They have a good idea but either don't fully follow through or have any actual direction as to making it a success when it does come forward.

      • SenorGravy

        In reply to wright_is:

        Microsoft's strategy in Consumer seems to be "Too litle, too late". Only besting BlackBerry's "Coming Soon) strategy. One thing that bothered me most about Windows Phone- was for a platform that was desperately trying to "catch up", they sure took their sweet time to get features and devices out the door. Windows Phone was awesome, and should never have died. Total incompetence.

    • hrlngrv

      In reply to wshwe:

      Not quite true. Look at microcomputer OSes. There are more than just Windows and macOS. The thing is that #3 and further back have to be OK with 2% or less worldwide user share. MSFT was absolutely not going to accept such trifling user share in phones.

  4. wright_is

    The problem is, more and more people are using their mobile devices, particularly smartphones, for the consumption of non-critical media (E.g Spotify, Audible, to a lesser extent video services). For that reason, the companies behind these media services are concentrating on mobile devices and leaving Windows, as a platform, by the wayside. For those that still consume their content through a Windows PC or Windows tablet or phone, that is an inconvinience. But if the providers can target hundreds of millions of users on mobile devices and only a small fraction use their services on the "desktop", it is little wonder that they don't bother.

    The same problem goes the other way, the media services provided by Microsoft were used as a long time to try and promote Windows as a consumption platform. Moving those media services to Android and iOS is now difficult, because Apple and Google have their own versions of these services and there are other cross-platform competitors that have managed to establish themselves.

    The other thing is, on the Windows desktop, you can get a "cut-down" experience by using the external media consumption services website "view". With PWA coming down line, this might improve, but at the moment it leaves Windows as the poor country cousin, when it comes to consuming media frome established streaming services.

    That said, I don't use any streaming services, although I do use Audible, but that is something I generally listen to when in the car, walking the dog or walking / taking the train to work. Those are all things that I can't do with a PC, so the lack of a decent client doesn't bother me.

    Although it probably should, because when I do do something with my technology devices, other than listening to audio books or podcasts, then I do it on a Windows PC with a 34" screen. The small displays on mobile phones (and I have a 6" display on my Hauwei Mate 10 Pro, for example) and not a very good experience for surfing the web or reading text or watching video.

    For reading text, I want to see a decent amount of text at a decent size, so the 34" display on my home and work PC are a much more comfortable experience than trying to read on the phone. The same for video, I watch video on my 50" 4K TV. So having less and less choice and everything going to tiny handset screens is not something I look forward to.

    • hrlngrv

      In reply to wright_is:

      Re the big TV, many recent smart TVs include Netflix and Hulu apps (and possibly others) in the US. If that's different in Europe, that's too bad. Can media content creators negotiate royalties with Europe-based streaming app makers/services on a Europe-wide basis or must that be on a country by country basis?

      • wright_is

        In reply to hrlngrv:

        My TV has Maxdome, PS video, Amazon prime, Google video and Netflix pre installed, among others. On top of that, I have installed the apps for ARD, ZDF, Pro7Sat1 and the other common channels for streaming their libraries.

        That said, I don't subscribe to any video service, we have Prime, because I have always been a Prime member, so it is a free perk.

        All the other libraries are free.

      • maethorechannen

        In reply to hrlngrv:

        If that's different in Europe, that's too bad.

        It's not different in Europe. Well, Hulu would be replaced with country specific apps (usually more than one - in the UK BBC iPlayer, ITV player, All 4, and My 5 are the standard ones but there are others as well).

        Can media content creators negotiate royalties with Europe-based streaming app makers/services on a Europe-wide basis or must that be on a country by country basis?

        Can? Technically yes, but in practice not really. I think even Netflix has country specific content. There just aren't a lot of pan-European services.

  5. hrlngrv

    MSFT is a business. Businesses are supposed to maximize profits, though with legal restrictions on becoming monopolies. Plus, it's good to be perceived as a growth company in growth industry.

    PCs no longer represent a growth industry. Phones may also have ceased being a growth industry, and if not are only a year or 2 away from it. The next big thing is ubiquitous computing not tied to particular local devices. That is a growth industry, and MSFT is positioning itself well for that.

    MSFT is going after industries in which it has a chance to be a major player and ones with considerable current revenues and growth potential. For MSFT that doesn't include consumer markets. Windows and Office have both consumer and enterprise markets, so MSFT will continue to pursue consumers with products it needs to make for its enterprise customers. Xbox makes enough revenues and has strong enough market presence that it's not the constant assault on MSFT's collective pride that Windows phones were. Beyond that, MSFT today may organizationally and psychologically be hostile ground for consumer products. MSFT's internal performance metrics may not be capable of rewarding the trial and error and unstable quarter-to-quarter sales which may be inherent in consumer markets.

    Back to MSFT is a business. If there's nothing more to Nadella's vision than rising stock price and market cap, how bad is that from the perspective of MSFT shareholders? Just how much should MSFT's board care about anyone else? The only way consumer markets would be important is providing a foundation for future growth. Maybe, for MSFT, they no longer do.

    • Jules Wombat

      In reply to hrlngrv:

      Yes This. Microsoft is being very successful in the direction its taking on Enterprise and Cloud Services.

      Fanboys on this site seem to think that Microsoft should exist to provide them with consumer toys and gadgets to compete with Apple, Google and Amazon.

      • MutualCore

        In reply to Jules_Wombat:

        The thing is I prefer Windows 10 on desktop. But my mobile side is iOS/Android. So if I wanted to take advantage of certain MS services that use the Graph I'd have to use the Cortana app on those devices which is a 2nd class experience.

        F.e., Timeline is coming in RS4 and allegedly MS will expose that inside the Cortana app on iOS/Android. Wouldn't it have been better to have a glorious Windows Phone where Timeline was a first-class experience with all the same great apps, Maps, services, etc... that are on iOS/Android!

        Now MS is in the position that innovative features like Timeline can't be brought to mobile in a native way because of market lock-in of existing apps like Youtube, LINE, Whatsapp, Facebook Messenger, Snapchat, banks.

  6. Paul Thurrott

    Interesting write-up thanks. Honestly, I don't see Microsoft really abandoning consumer and as it would point out, consumer/commercial are just too intrinsically linked. The issue isn't what they do, per se, it's that companies like Apple and even Google and Samsung are just more visible in this space because they make the platforms or hardware devices that people use most. In this world, Microsoft may be a few apps on a phone, not the entire experience. But the existential crisis that Microsoft fans feel is a non-event in the real world. Which just keeps on spinning. Maybe we need to stop worrying about this. :)

    • bunchel

      In reply to paul-thurrott:

      Hi Paul:

      I am not worried at all. I am just done.

      Yes, Windows phone needed apps for some things, but it was gaining. When MS retreated instead of pushing forward, the app decline became critical. After that, I don't think anything but the decline of Windows phone could have been expected.

      MS almost sucked me back a little around Christmas when they gave a great deal for Groove for a limited period (because I liked Groove). But it light of my experience, I decided it was a fool's game. As you know, shortly thereafter, Groove was abandoned.

      Glad I didn't take the bait. I will be leery for a long time, at least on the consumer side. Especially with Nadella at the helm.

  7. Jules Wombat

    Well obviously, nothing new

    You answered it by admitting that the consumer regards the platform as a free commodity. If consumers are not prepared to pay, then it's obvious business sense to concentrate on those markets and domains that do pay.

    • bunchel

      In reply to Jules_Wombat:

      Free commodity? Where do you come up with that?

      I paid for all of those devices and services. I would have continued to pay if they were supported. I would have purchase updated devices and services if I had confidence they would not be abandoned.

      Oh, and I forgot, I paid for a Surface 2 which I liked very much...abandoned. Now they are coming out with ARM again, but abandoned ARM on the device I bought. Years ago, I bought a computer with Vista on it which I happened to like. I paid for an upgrade to Windows 8 and after that the screen display became unusable as it turned black with green dashes on it. I called MS and they tried to fix it by changing drivers, and nothing helped, but they decided there was nothing else they could do...abandoned. And this was after I paid for Windows 8 and paid for a years worth of support (which I also paid for in previous years). I used to pay for XBOX Live and Office 365. I liked them too. But I reluctantly did not renew them. So I no longer have those commodities I used to pay for. I am okay with that.

      I paid plenty. Free commodity??? I don't think so. Abandoned paying consumer...Yes.

      As Paul has said, that ship has sailed and this consumer has been off that ship for about a year.

      • Jules Wombat

        In reply to bunchel:

        I said platform ( aka Windows is) is considered free and not valued by consumers, not Services and hardware. Microsoft is a business and succeeds where market pays and they get Profit That means Enterprise and Business, and not consumers.

        • bunchel

          In reply to Jules_Wombat:
          Again...where do you come up with that? Windows 10 was only free for a period when they wanted everybody to upgrade to Windows 10. I paid to upgrade to Windows 8. The price of Windows is built into the price of a new computer or one might pay to upgrade from Windows Home to Windows Pro. Whether you think the consumer considers Windows is free doesn’t change the fact that the consumer generally pays for it and MS profits.

          Also, MS now presents Windows as a service. People pay for it. A platform is something one could jump off.

          Obviously MS is going after business customers. But I was a paying consumer customer who paid for a lot of their products. Nadella has demonstrated he is not interested. Fine. I moved on too. I wish them luck.
          • Jules Wombat

            In reply to bunchel:

            You are not a typical consumer. The typical consumer (99%) does NOT factor, value or are prepared to stump up the costs of paying for an Operating system. Go into the street and ask out of 100 people who has explicitly paid for an OS upgrade or standalone lisence in the last 5 years. Its a hidden cost to them. Very few consumers actually prepared to pay for MS Windows or Office services.

            • bunchel

              In reply to Jules_Wombat:

              Again...Where do you come up with that?

              Your so called "hidden" costs are still real costs and produce real profits. MS has generated and still generates very significant revenues from both Windows and Office.

              You say the "typical" consumer doesn't value a computer operating system. Please consider how many and what percentage of computers are bought without operating systems by your "typical" consumer. I think you will find your "typical" consumer finds operating systems quite valuable, if not quite essential for them to use their computer.

  8. doofus2

    MSFT doesn't really have a way in the front door to consumers. They failed with Windows Phone, failed in their attempt to leverage the Windows user base to get into phone (Windows 8), failed in the consumption area (music, movies, Bing, etc.), and on and on.

    When they purchased Xamarin, I thought "this is an excellent way to come through the backdoor to the consumer". The idea being that they make a massive effort to get mobile developers to use Xamarin Forms for its cross-platform capabilities (mobile OSes suck from a dev POV). If they could get enough devs on Xamarin then they effectively "own" those platforms. At that point, MSFT could introduce a new consumer phone/tablet and add one-click support to Xamarin to produce apps for it. Boom! You now have a device *and* the apps it needs right out of the starting gate.

    Unfortunately, Xamarin Forms is a mess. Buggy, fragile, and slow. Very disappointing.

  9. Bats

    I don't know if you can say that Bill Gates' vision of a PC on every desk worked. What other choices were there? Back in the 1980's people never bought a PC because Windows was on it. It was already UNDERSTOOD that it came with Windows, OR if you go back further MS-DOS or PC-DOS.

    The bottomline is this, Microsoft doesn't know how to compete with FREE. That's funny considering they were the ones that started it with Free Internet Explorer which saw the demise of Netscape Navigator. Microsoft just doesn't know how to compete and are doing a lousy doing so. They lost in email, browser, phone.....and they can't compete in all other services. They can't even compete in the video gaming market.

    They just can't compete as evidence by the products they bring to market. They're no good. Zune, Windows Phone, Band, etc...... No Good.

    • wright_is

      In reply to Bats:

      In the 1980s, PCs generally came with either the manufacturers own operating system (E.g. Commodore PET, VIC=20, C64, Amiga, Atari ST, ZX Spectrum, Elan, Memotech) or they came with a third party operating system (CP/M, UNIX, MSX etc.). PC-DOS / MS-DOS only became the defacto standard because Digital Research dropped the ball.

    • hrlngrv

      In reply to Bats:

      Picky: PCs didn't come with Windows until Windows 3.1 around 1993. Back in the 1980s it was possible to buy new PCs without an OS, especially new PCs with no harddisks. Preinstalled OSes were new in the 1990s.

      How, exactly, did MSFT lose in e-mail? Do you mean Android phone and tablets, iPhones and iPads mostly use something other than Outlook?

  10. skane2600

    "Back in the 1980s Bill Gates’ vision was a PC on every desk. That was business and consumer."

    Historically PCs were not classified as consumer devices although a lot of people used them for non-business purposes. PCs were very rarely, if ever, shown at CES.

  11. wunderbar

    It has always been my belief and hypothesis that Microsoft has never actually been a "consumer" company, but that's a long and complicated thing.

    In the context that you put it, the downfall of Microosft as a consumer company can, in my opinion, be traced back to 2006 and 2007.

    In 2006, Windows Vista was released. And while Vista was 100% fine on high end PC's ($1500+ devices) of the time, the fact that Windows XP was 5 years old at that point and ran really well on $600 PC's meant that consumers were used to PC's at that price that could run Windows well. Windows Vista did not run well on cheap PC's of the time, and that resulted in a very negative perception to consumers. That was Vista's downfall more than anything else, and it really soured people on Windows. (There are other factors here, like this being the time when Apple was just finished transitioning to Intel and had some great hardware products at the time)

    Then, in 2007: the iPhone. Microsoft had nothing to compete with it. Even with the first iPhone actually not being that great of a product, the seed was planted, and the 3G in 2008 started the steamroll. But in 2007 the true transition to mobile began, and Microsoft didn't have an answer.

    By the end of 2007, Microsoft had an operating system that the consumer market, by and large, hated. And Microsoft was faced with a competitor in the Mobile platform with a far superior core product that would go on to eat it's lunch, and had to start at zero making it's own competitive offering, which came way too late.

    So, Microsoft had an undesirable PC operating system, and an undesirable Mobile platform. That was the end on the consumer side. Windows 7 came in 2009 and was a success in that it ran well on midrange PC's of the time. But by then, Windows was already starting to become "the thing I use because I have to/the thing I use for work." It wasn't going to move the needle like a mobile device could, even back in 2009. And by the time Windows Phone 7 finally came, not only was Apple on the iPhone 4, which really was a revolution in smartphone design, the app store was maturing, and it was a wild success. And don't forget, Android was already huge by 2010. It was on Gingerbread 2.3 and was well on it's way to becoming a dominant platform. At that point, it didn't matter how good or bad Windows Phone 7 was. It lost before it even hit the market.

    If Windows Vista hadn't been the tire fire that it was on midrange devices in 2006, or Microsoft had had *some* kind of product that was at least competitive with the iPhone in 2007/08, maybe things would be different. But, they didn't so here we are.

    • jimchamplin

      In reply to wunderbar:


      A great deal of why Vista got such a bad rep was down to the fact that OEMs were so incredibly cheap with Vista boxes. They were selling machines that were simply adequate for XP as Vista machines. Single-core, single-thread Pentium 4 machines with 512MB of RAM. HOLY CRAP!

      A decade later, I wouldn't dream of using a machine that isn't at least capable of executing four simultaneous threads. And that means four real threads. Not a hyperthreaded dual-core system. I want quad-core for real. Modern software chokes on single-thread CPUs, and I'll have nothing to do with them.

      Hell, this is a kinda-important topic for me as a lower-than-budget user. I'll make a whole thread about it.

      Nobody will reply to it at all! :D

      • Oasis

        In reply to jimchamplin:

        It is just the same as it is now, if you want a decent machine you have to pay big bucks or special order it. I see tons of W10 machines with low RAM and storage, Windows should be 4GB and 64GB min for W10. When I ordered my WinXP Machine in 2008 it had Vista Business on it (just the disc) and XP as a downgrade. I ordered it as Q6600 and made sure it was a 7200RPM drive. Still use it, WinXp/WinVista/Lubuntu, of course the Win are neutered.

        • wright_is

          In reply to Oasis:

          We currently buy $400 - $500 PCs at work, Fujitsu, with Core i5, 8GB RAM and 250GB SSDs. They are more than fast enough for normal business use. We do use Wortmann workstations with Core i7, 32GB RAM, SSD and Quadro graphics for CAD work.

          The same for laptops, Fujitsu Lifebooks with i5, 8GB and SSD are not expensive, around $600-$700 and Dell Precision workstation laptops for mobile CAD.

    • marjankn

      In reply to wunderba ایکیا تهران ایکیا ایران مبلمان ایکیا محصولات ایکیا