Channel Watch

Microsoft's Once-Shiny Brand Needs Some Polish

While Apple and even IBM are rocketing up the polls in brand ranking, Microsoft's brand has been dipping. What gives?

• By Scott Bekker
• June 27, 2011

Microsoft's brand is kind of like a retirement account that's growing in value but isn't keeping up with inflation.

Independent market reports released in May have Microsoft trailing other technology leaders in brand value and corporate reputation.

Millward Brown, whose inaugural BrandZ list of the 100 most valuable global brands in 2006 put Microsoft at No. 1, now has Microsoft at No. 5. A Harris Interactive survey had Microsoft falling from No. 7 last year to No. 16 in a rating it developed called the reputation quotient.

There are some bright spots, however. On the Fortune magazine list of the World's Most Admired Companies from earlier this year, Microsoft went from No. 11 in 2010 to No. 9 this year. Of course, Apple is No. 1 there. And in the Redmond Channel Partner reader survey earlier this year, partners said the Microsoft brand overwhelmingly continues to be a benefit for business.

Yet looking at the Microsoft brand through the lens of the Millward Brown ranking shows how its value has been stuck in neutral.

In 2006 as the No. 1 brand worldwide, Microsoft's closest peers were non-technology companies such as GE and Coca-Cola. Google and IBM had a little more than half of Microsoft's brand value -- Apple at $16 billion had about a quarter of Microsoft's $62 billion in BrandZ value. At the time, Microsoft seemed like an unstoppable technology juggernaut.

Microsoft dropped to No. 2 behind Google in 2007 and held on to that spot for two more years in 2008 and 2009.

Last year, the list was shaken up to Microsoft's detriment, with IBM and Apple taking second and third place behind Google. Microsoft wound up fourth.

Now Apple is first with an estimated brand value of $153 billion, Google is second at $111 billion and IBM is third at $101 billion. Microsoft sits in fifth place at $78 billion, and is behind a non-technology company (McDonald's) for the first time.

To recap: From 2006 to 2011, Microsoft went from $62 billion to $78 billion, while Apple raced from $16 billion to $153 billion in brand value and IBM soared from $36 billion to $101 billion.

Is a turnaround for the Microsoft brand possible? You bet. Look at what's happened to IBM and Apple since 2006. Apple did it with market-making products (the iPhone and iPad devices). Unless Microsoft has some tremendous innovation up its R&D sleeves, maybe it had better look to Armonk, N.Y., to figure out how the IBM logo regained its luster.

In 2006, Gold Certified Partners had a golden badge atop a golden brand. Now the Gold Certified Partner level is gone, and the brand isn't as shiny, either. Is customer perception affecting your decisions to carry some Microsoft products, or at least to lead with them? Or is this still a consumer story that's not leaking into the business world? Let me know at [email protected].