Microsoft to Open Stores, Hires Retail Hand

wsjtech ^ | 2-13-2009 | Nick Wingfield

[lainie]

Microsoft Corp. said it hired a former Wal-Mart Stores Inc. executive to help the company open its own retail stores, a strategy shift that borrows from the playbook of rival Apple Inc.

The Redmond, Wash., company said it hired David Porter, most recently the head of world-wide product distribution at DreamWorks Animation SKG, as corporate vice president of retail stores for Microsoft.

In a statement, Microsoft said the first priority of Mr. Porter, who is also a 25-year veteran of Wal-Mart, will be to define where to place the Microsoft stores and when to open them. A Microsoft spokesman said the company's current plans are for a "small number" of stores.

In a warehouse near its Redmond, Wash., campus, Microsoft created mockups for how Microsoft products might be displayed either in its own stores or in a retailer's.

It remains to be seen whether the effort can add some pizzazz to Microsoft's unfashionable image, which Apple has sought to reinforce with ads that mock its competitor. Mr. Porter, in a statement, said there are "tremendous opportunities" for Microsoft to create a "world-class shopping experience" for the company's customers.

[SunkenCiv]

[coon2000]

They did not steal it, but you have to give Xerox credit. Xerox was way ahead of the game, light years, but their management in all their infinite wisdom did not believe the idea of a paperless office, and so let the Star hit the dump heap. Jobs saw it and knew it was the future. LISA was created and we were on our way to what everyone now takes for granted. HP made a similar error when they allowed Jobs and Wozniak to have ownership on the prototype Apple that they developed on HP’s time. They did not think anyone would want or need a pc. I sold computers from 1980 till about 1985, needed to pay for college! Remember the portable Compaq, the HP touch screen, the IBM AT? The good old days when DOS was king! ;)

[Swordmaker]

Actually they could sell laptops that are optimized to really work with their OS - they would have more control of components and drivers.

I think that the anti-trust people would have a lot to say to Microsoft if they did that... not to mention the lawsuits from HP, Dell, ASUS, Compaq, and every other computer maker that would find themselves competing in the hardware field against their own OS supplier.

[Richard Kimball]

Yeah, and here's where it gets sticky for MS. A ton of the MS software is OEM, which means "absolutely no MS support, nothing, nada, zilch." You get software updates and can search their support database, but they will not talk to you on the phone if something goes wrong on day one or day ten. Soooooooo you can buy a $250 Microsoft ticket and they'll talk to you on the phone, but won't guarantee they'll solve the problem. What happens when a guy walks into the store with one of those issues? I don't think most users know that when they buy a computer with Windows supplied that it doesn't include any MS support (disclaimer: I left Windows with ME and this info may be dated.

Also, there's got to be hardware in the store. A store with only software in boxes will simply not cut it. If they sell the el cheapo boxes in the stores, they'll have problems. If they sell the premium boxes, they'll cost as much as Macs. Will people pay that much? Also, what happens to all the MS "partners" who get left out in the cold? Well, MS has dumped people before. Remember "Plays for sure?" A lot of hardware vendors ended up sucking air when MS dumped that after a couple of years. The thing is, though, MS hasn't ever dumped on all their hardware partners in this fashion before.

I'm hearing good buzz about the next MS OS, but the last real programming done there was probably NT. Since Gates retired, the company has also seemed rudderless, going from one fiasco to another. I'll be surprised if Zune recovers, as it's become a punch line. XBox has been successful, but IIRC, MS sold the boxes at a significant loss. I don't know if that's still true. BTW, I've still never seen a Zune in the wild, and I work on a college campus. There are lots of iPhones, though.

[VanDeKoik]

“Selling in direct competition against their own retailers... such as Walmart, Frys, Circuit City (well, not), Radio Shack, Game Stop, and every Mom and Pop computer store in the country. Sounds like a really good business plan to alienate your business partners.”

Apple does sell at Best Buy, Walmart, Radio Shack and at other retailers, and they dont seem to care. And I doubt they are going to go on the warpath over this.

It’s not a zero-sum game. Not everyone will have a MS store in their town or conveniently located. I have one Apple store in my town. If I was at the mall on the other side of town, and needed some iPod accessory, I’m not going to go all the way over to the Apple store to get it.

“Ok, but then you create demand for products that may never see the light of day.”

Not all of those I mentioned are concepts. And if one is and people now want it because they saw it demoed at the Microsoft store, then you now have a market.

” Apple opened the Apple Stores to retail their own products because the retailers were doing a poor job of it. In spot checks, Apple found that display Macs were disconnected, complete turned off, or had been sabotaged with all applications disabled in over 50% of the stores. Sales people in third party stores were found to be deliberately re-directing potential Apple customers to Windows PCs based on false or completely outdated information, FUD, and/or telling them they were “Toy” computers. The sales people, unfamiliar with Macs, would almost always steer customers to the platform they were familiar with... Windows PCs.”

And Now Microsoft is dealing with an equally disrespectful, ignorant, and FUD-armed environment where they now may see a benefit to selling directly to consumers in an environment they create.

[Richard Kimball]

Okay, you lost me on that one.

[Star Traveler]

You said — “You mean like the interface that Apple stole from Xerox?”

An old wive’s tale that is perpetuated through comments like this... LOL..

Apple was in development with the Lisa and the Macintosh, with each of their respective UIs *before* Apple ever made a trip out to Xerox. And in addition to that, Apple paid Xerox millions of dollars in stocks for the visits that they had negotiated with the headquarters of Xerox. This was done *after* both the Lisa and the Macintosh had been in development and was already quite far along in their own UIs.

You see, the “truth” is always less fun than making up stuff... :-)

---

In 1979, Jef Raskin started the Macintosh project at Apple. He identified a need for a computer that was easier to use than anything developed to date. Both the Macintosh project and the Lisa project were works in progress prior to Apple’s infamous visit to Xerox. Apple and Xerox were in simultaneous development of a GUI. Apple was aware of Xerox’s work because the founder of the Macintosh project, Jef Raskin had lectured at Xerox on the topic prior to joining Apple. Jef Raskin was something of an authority on the subject at the time. He had written his Master’s thesis on a WYSIWYG graphical interface back in 1967. Likewise, many of the same ideas that fueled Xerox’s effort originated from the creator of the Macintosh project.

[ http://technicalconclusions.wordpress.com/2007/11/12/history-of-gui/ ]

You’ll notice that Jef Raskin was known for this kind of UI *before* Apple or Xerox had anything going on with it. And he lectured over at Xerox on the subject. And of course, he worked for Apple.

—

An article written by Andy Hertzfeld about Bill Atkinson’s work on the UI...

The Macintosh User Interface wasn’t designed all at once; it was actually the result of almost five years of experimentation and development at Apple, starting with graphics routines that Bill Atkinson began writing for Lisa in late 1978. Like any evolutionary process, there were lots of false starts and blind alleys along the way. It’s a shame that these tend to be lost to history, since there is a lot that we can learn from them.

Fortunately, the main developer of the user interface, Bill Atkinson, was an avid, lifelong photographer, and he had the foresight to document the incremental development of the Lisa User Interface (which more or less became the Mac UI after a few tweaks) with a series of photographs. He kept a Polaroid camera by his computer, and took a snapshot each time the user interface reached a new milestone, which he collected in a loose-leaf notebook. I’m excited to be able to reproduce and annotate them here, since they offer a fascinating, behind the scenes glimpse of how the Mac’s breakthrough user interface was crafted.

See the whole article at — http://folklore.org/StoryView.py?project=Macintosh&story=Busy_Being_Born.txt&sortOrder=Sort%20by%20Date

—

And then, an article from Bruce Horn about the idea that Apple took the UI idea from Xerox... (written in 1996)

For more than a decade now, I’ve listened to the debate about where the Macintosh user interface came from. Most people assume it came directly from Xerox, after Steve Jobs went to visit Xerox PARC (Palo Alto Research Center). This “fact” is reported over and over, by people who don’t know better (and also by people who should!). Unfortunately, it just isn’t true - there are some similarities between the Apple interface and the various interfaces on Xerox systems, but the differences are substantial.

Steve did see Smalltalk when he visited PARC. He saw the Smalltalk integrated programming environment, with the mouse selecting text, pop-up menus, windows, and so on. The Lisa group at Apple built a system based on their own ideas combined with what they could remember from the Smalltalk demo, and the Mac folks built yet another system. There is a significant difference between using the Mac and Smalltalk.

See the whole article at — http://folklore.org/StoryView.py?project=Macintosh&story=On_Xerox,_Apple_and_Progress.txt&sortOrder=Sort%20by%20Date

---

Try not to perpetuate old wives tales...

[Swordmaker]

Apple does sell at Best Buy, Walmart, Radio Shack and at other retailers, and they dont seem to care. And I doubt they are going to go on the warpath over this.

Macs are sold only at Best Buy and Fry's as well as at some surviving independents. Walmart, Radio Shack, and the other retailers sell iPods. iPhones are sold at Walmart, Best Buy, AT&T Stores. Windows PCs are literally sold at tens of thousands of outlets.

And Now Microsoft is dealing with an equally disrespectful, ignorant, and FUD-armed environment where they now may see a benefit to selling directly to consumers in an environment they create.

Where are the sales people steering PC sales away from Microsoft to Apples? Most of the people who are buying Macs are EXPERIENCED with Windows. They have been there and don't want it anymore.

[TheBattman]

So - are they going to have a Genius errr... Intellectual Bar where people can bring their hardware and get it fixed and/or fixed under warranty? I seriously doubt it - because MS sells very little hardware themselves (game system, input devices, and....some goofy named media player named after some cult-hit movie...oh, wait... That was Dune... sorry.

Anyway - the point is - they couldn't possibly keep up with every Tom, Dick, and Bill brining in various pieces of their PC's to have the Geni...errr... Intellectual fix their problem.

Still no original thought out of MS.

[Richard Kimball]

I don't know about Rat Shack, haven't been in one in years. The other retailers started selling Apples when their market share went up, and that was after the Apple Stores opened. Best Buy quit selling Apple for a while because when Apple came out with the different colored iMacs, Best Buy only wanted to stock a few of the colors. Apple refused, and BB quit selling them. This was before the Apple Stores, and I suspect Jobs may have engineered the break because he was planning the Apple stores.

I got my first iMac at CompUSA, and bought it in spite of the sales people. I think Walmart and BB see a niche because Apple is being careful not to oversaturate with Apple Stores, so I get some of my stuff at BB, cause the nearest Apple Store is about 100 miles away.

BTW, another poster said MS just keeps getting bigger. True, but almost all their profits still come from Windows and Office. Zune is a money pit. XBox, I'm not sure, but when the last version came out, I think they were selling each box for a $200 loss, hoping to make it up with software sales. I don't know where that branch is financially.

[6SJ7]

Xerox credit. Xerox was way ahead of the game, light years, but their management in all their infinite wisdom did not believe the idea of a paperless office, and so let the Star hit the dump heap.

Ironic, in that many years earlier, the inventor of xerography pitched his idea to GE, and GE thought "mimeograph is good enough".

[Spktyr]

I believe that the xBox division posted a ginormous loss because of all the repairs they’re having to make to their xBox 360s (google: red ring of death).

[Locomotive Breath]

Apple did a deal with Xerox who were too stupid to know what they had and pretty much gave it away. There is a difference between that and theft.

Like IBM thinking all the profit was in hardware and giving the rights for the OS to MS. The one smart thing MS ever did and the basis for all their success. Then IBM goes and makes an open system specification so anyone can sell to it. And then they got run out of the “IBM-compatible” business.

Dumb, dumb, dumb.

I predict Microsoft opens in specialized sections in Walmart. It would just about fit.

[Locomotive Breath]

You just think you do! I kid, I kid.

[Tribune7]

The Gateway stores were good ideas just really bad stores.

I went into one a couple of times fully expecting to buy something and didn't because of the clueless help.

[cowboyway]

I’m not going in a MS store.

Probably catch a virus and be sick for a week...............

[grey_whiskers]

Kind of like a lot of their user interface.

That's going to leave a mark!

DING DING DING DING DING DING DING DING DING DING DING!

NO more calls, please.

We have a winner!

[grey_whiskers]

As for those mocking MS SW quality - you truly have no idea of the immense amount of expense and effort is spent here on SQA and testing.

Let me guess -- either the coding or the SQA is done by India.

Or Melinda is in charge of the initial technical design specs.

Cause the products SUCK.

(Can you say "Patch Tuesday" ??)

Cheers!

[grey_whiskers]

The Zune sections at the local stores have to be the loneliest places on Earth.

Even the crickets are not heard there...

What? A Microsoft product *without bugs*?
(dead faint)

Cheers!

[stentorian conservative]

I likes this article about a Microsoft store. Had me in stitches. Definitely a Microsoft bash fest.

Microsoft's retail stores could struggle to lure shoppers 11:05 AM, February 13, 2009

At least someone likes the Microsoft store idea. Credit: LuChOeDu via Flickr. You have to hand it to Microsoft -- despite being mocked in Apple ads and losing market share to its Cupertino, Calif., competitor, the software giant isn't giving up the fight. Late Thursday, Microsoft seemed to take a page from the "if you can't beat 'em, join 'em" playbook, announcing it had hired a former Wal-Mart manager, David Porter, to open a chain of branded Microsoft stores.

The idea is to make it easier for customers to buy and check out Microsoft products, such as the XBox, Zune and new Windows operating systems.

But will the strategy work in a dismal retail climate, especially for a company that announced its first-ever big layoffs this year? And how do you compete with Apple stores, which seem to draw in passersby with the same magnetism of that tractor beam in the Death Star?

You don't, if you ask analyst Allan B. Krans with Technology Business Research. "In terms of demand generation, Microsoft is putting the cart before the horse," he wrote in a research note today. "Stores do not draw consumers to products; innovative products bring consumers into stores."

Apple's store coincided with the launch of the iPod, which drew people to stores. Microsoft's problem, he says, is that it doesn't have ...

... anything particularly exciting to show off. Microsoft's customers and core base are pretty different than Apple's, Krans says. Not many dedicated PC users are willing to sleep outside a Microsoft store for the newest Windows operating system, like Apple fans did for the iPhone.

"Microsoft cannot lay claim to being new, hip, or edgy," he writes. Sorry, Seinfeld.

Worse, Microsoft might alienate its distributors by trying to compete with them, he writes. And retail stores probably don't need any more competition in this economy. Other tech companies that have ventured into retail have failed, according to the Wall Street Journal, and even Microsoft's half-hearted attempt at opening a store in 1999 was short-lived.

If that isn't pessimistic enough, check out PC World's tongue-in-cheek vision of how the Microsoft store will differ from the Apple store. It includes a theme-park ride called Blue Screen of Death, an "Excuse Bar" rather than a Genius Bar and easy-to-enter emergency exits so that strangers can get in at any time.

-- Alana Semuels

Microsoft's retail stores could struggle to lure shoppers