Perhaps the most relevant comment in the context of emerging markets came from Tom Foremski who wrote:
The best strategy for Microsoft (and others) to fight off the innovation powerhouse of Google is to wrap metal and plastic around its software and online content/services.
Hardware is now cheap enough that the cell phone approach to the PC industry makes sense. Microsoft has the hardware experience and capabilities to create a MSFT PC that is tied into its “Live” platform for the consumer market.
This creates the walled garden–fusing hardware with software with services–that resists competition no matter how innovative. That’s what Apple Computer did with the marriage of iPod/iTunes, and it created a position of dominance in a market that has many “innovative” MP3 players and online music stores.
Add to that a walled garden of pipes–from one or more of the telcos–and you have a very defensible fortress position.
A MSFT PC could be based on its Xbox platform, and it doesn’t necessarily need a big, expensive Intel microprocessor, it can be put together with a combination of specialist hardware and commodity parts. It would be aimed at the consumer and small business and schools markets.
I see the live era that Microsofts offerings herald as yet another step in the direction of centralised computing. The early adopters for this will not come from the developed world but from the emerging markets. Microsoft, like Sun in the past, is focusing on the wrong set of users. They should look at todays non-consumers the next billion in the worlds emerging markets. They need computing but cannot afford the computers or the software. Many have chosen the piracy route to getting around the high perceived cost of software. But the issue of the access device still remains a bottleneck.
This is where there is a need to combine network computers (what Tom Foremski calls the MSFT PC) with a centralised grid which offers computing and storage. As broadband networks proliferate, this is how computing needs to be reinvented. This is what Microsoft should be focusing on with Windows and Office Live.
Another important factor in emerging markets is the mobile phone. As the processing power on these phones increases and the networks become faster, the phone morphs into a mobile network computer. It will also need to access the information and services from the centralised grid.
Microsoft needs to recognize that there is a platform shift that is taking place from the desktop to the network. Just as it won the desktop era, Google is on its way to winning the network era. What Microsoft (or any other company) needs to do is to focus on the next era. That is an era of mobile network computers with the users coming from the worlds emerging markets. This is where computing has still not penetrated deeply. This is the world that companies need to target. This is where the Future Lives.
Continue reading TECH TALK: Microsoft Live: Emerging Markets Opportunity