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Salesforce chief: Microsoft fails because of 'Zune strategy'

updated 06:15 pm EDT, Mon May 23, 2011

Salesforce says Microsoft repeating Zune failures

Salesforce chief Marc Benioff squared off against Microsoft in an earnings call late last week that boiled Microsoft's more recent failures to a single method. Calling it the "Zune strategy," he argued that Microsoft kept repeating the strategy it took with its self-designed but largely unsuccessful MP3 player, expecting different results. Along with failing to topple Salesforce's Sales Cloud with CRM Dynamics, Microsoft had tried to push Windows tablets and the Zune as iPad and iPod rivals without having anything special beyond the brand name and price.

The Zune strategy is "the concept that they can take a proprietary, undifferentiated offering at a lower price and somehow make an impact on a high-value, highly differentiated product that's loved by customers," Benioff said. "Customers continue to want visionary products that give them a competitive advantage, not the me-too Zune-type products locking them into these old, proprietary, desktop-driven platforms that are dying off."

Microsoft launched the original Zune in 2006 as an attempt to replicate the success of the iPod and after an inability to adapt the Windows model to MP3 players, where third parties had to license a generic Windows media device OS or else use its PlaysForSure copy protection. The lineup gained a loyal following but never went beyond two percent total market share and was eventually overtaken once more by smaller companies like SanDisk.

Windows tablets have taken a largely similar route. Microsoft CEO Steve Ballmer held up the HP Slate as a home focused tablet in January 2010, presuming that an off-the-shelf Windows 7 tablet, along with a number of equivalents from traditional PC builders, would be a preemptive strike against a then-rumored iPad. The iPad's sharp contrast to the Windows philosophy and its later strong sales led HP to delay the Slate's arrival until October and shunt it to the enterprise in favor of the more iPad-like, webOS-based TouchPad.

Some evidence has popped up that Microsoft has been adjusting its strategy. While the Zune HD is rumored on its way out, Windows Phone 7 has been touted as genuinely unique, though not necessarily meeting with success. Most also point to the Xbox as an example of a genuinely different console experience. An answer for Windows may not occur until Windows 8 is shown off and is ultimately released in late 2012. [via Daring Fireball]

by MacNN Staff



  1. aduffbrew

    Joined: Dec 1969


    *Taps Watch*

    How does a company as large and commanding of talent like Microsoft fail to inspire and lead? Oh wait. Coach Ballmer and his starting line. Hey shareholders, Nokia took the leap for change. When's your turn? Waiting until old school completely stops workin' for ya? Ain't that a bit TOO late?!

    Fire the coach already and hire one willing to rewrite the playbook. If all you do is try to hold the line, that's the best you can every hope to do. Eventually that won't cut it. Ya gotta move the ball forward before the other team moves it for you! The clock's counting down and eventually it will be too late to rally and, if you haven't noticed, the fans are already starting to file out. DO SOMETHING... SOMETHING BIG!!!

    Comment buried. Show
  1. facebook_Keith

    Via Facebook

    Joined: May 2011


    Flawed argument

    Android now has 36% market share, compared to iphone's 18%. Even though Android phones are a "proprietary, undifferentiated offering at a lower price".

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