Fireworks in Redmond

Report suggests Microsoft's woes stem from lack of young developers and customers.

It was, no doubt, a rather unsettling beginning of Microsoft's new fiscal year.

First Microsoft kills the Kin, making it arguably its biggest flop since Bob. Then a report by Microsoft Kitchen's Stephen Chapman detailed some specifics about plans for Windows 8 including a Windows Store, faster boot-up, support for slate-type devices and facial recognition. Not a welcome move as Microsoft is looking to keep the focus on Windows 7.

Then on July 4, The New York Times published a scathing piece that questioned Microsoft's ability to appeal to young consumers and developers alike. Using the Kim demise as the backdrop, the Times piece questioned Microsoft's ability to appeal to the youth crowd.

"We did not get access to kids as they were going through college," Bob Muglia, president of Microsoft’s business software group, told the Times last year. "And then, when people, particularly younger people, wanted to build a start-up, and they were generally under-capitalized, the idea of buying Microsoft software was a really problematic idea for them."

Tim O'Reilly, the influential book publisher and conference organizer, lent credibility to the Times' Ashlee Vance assertion:

"Microsoft is totally off the radar of the cool, hip, cutting-edge software developers. And they are largely out of the consciousness of your average developer," O'Reilly was quoted as saying.

O'Reilly in a blog posting said he doesn't recall saying that. "My memory is that Ashlee opened our conversation with that assertion, which I countered by saying that Microsoft still has big, active developer communities, and that you shouldn't assume that just because you can't see them in San Francisco, that they are dead," O'Reilly writes.

"I feel more than a little misrepresented," O'Reilly concludes. "It's sad when the NYT uses "flamebait" techniques in its stories. Rather than real journalism, this felt like a reporter trying to create controversy rather than report news."

Frank Shaw, Microsoft's corporate VP of communications told Seattle's public radio station KUOW that Microsoft has two strong efforts to recruit young developers -- Dreamspark and its Imagine Cup project taking place now in Poland. "We've got programs designed at young developers," Shaw said. "I look at both those things and think maybe our definition of cool and hip is different."

He points to his recent blog posting where he highlights Microsoft's net income for its 2009 fiscal year of $14.5 billion, compared to Google's $6.5 billion and Apple's $8.2 billion. "We've grown revenue and profits in a phenomenal way," Shaw said. Of course a clearer indication will come later this month when Microsoft reports its fiscal year 2010 earnings for the period ended on June 30.

Do you think Microsoft can pull out of its current morass and appeal to young developers and consumers? Drop me a line at [email protected].

Posted by Jeffrey Schwartz on July 07, 2010