Microsoft Leads Analysts Astray

Microsoft today will host its annual meeting with market analysts. The company will bring the visitors up to speed on strategic initiatives, discuss salient market and technology trends, spotlight key products and solutions, and perhaps reset or gently massage market expectations for the year ahead.

As I read what analysts had on their minds as they prepared for the gathering in Redmond, I lost hope that Microsoft finally would muster the courage to look itself the mirror and acknowledge the earnest business-solution purveyor that stares back at it. I was tempted to say that the analysts are part of Microsoft’s problem — that they’re focused on the wrong things, that they don’t understand the essence of Microsoft, that they don’t appreciate the company’s inherent strengths and weaknesses — but, you know, that just wouldn’t have been fair, much less right.

Analysts take their cues from the companies they follow. If the market watchers monitoring Microsoft are stumbling down a blind alley, that’s because Microsoft led them there, perhaps even setting the wrong GPS coordinates on a doomed Windows Mobile application.

It follows, then, that if the guests at Microsoft today are focused on the wrong things — if they’re looking for answers and guidance on markets where Microsoft shouldn’t be playing, where it should scale back its efforts and investments, or where it needs to rethink its strategy — the fault is entirely Microsoft’s. The analysts are preoccupied with Microsoft’s consumer-facing product roadmaps, revenue projections, margins, and earnings (or lack thereof) because that is where Microsoft has focused their attention.

Rather than pointing at its potential to expand its presence and to achieve further growth in its core business markets — SMBs and large enterprises, and where and how those constituencies will consume application and computing services in future — Microsoft perversely has chosen to showcase its embarrassments and warts. It’s not a pretty sight, as the Kin fiasco demonstrates.

Meanwhile, if Microsoft would only listen, its customers — even its closest partners — are trying to set it straight. Yesterday, for example, HP confirmed that it would pursue a dual-tablet strategy, providing a Windows 7-based tablet for business customers and a webOS-based tablet for consumers. HP knows where Microsoft is strong and where it’s not so strong.

Microsoft might get the message one of these days. I’m just not expecting the epiphany to arrive today.

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One response to “Microsoft Leads Analysts Astray

  1. Pingback: Microsoft Leads Analysts Astray « Twilight in the Valley of the Nerds | Penny Stocks

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