Over the past few months (or ever years) there has been a lot of talk of how Microsoft doesn’t “get” the consumer. The easiest reason for this thought is that the company is often too slow to act. Microsoft has not defined any consumer segment and even when it kind of stumbled into them it was able to hold its lead (Windows Mobile). There is however one successful consumer product Microsoft makes, the Xbox 360.

The reason why Microsoft is perhaps too slow for consumer products is from its business focused heritage. Businesses move slowly, very slowly. This means that it takes them a long time to make a decision on what technology to buy (whether it be operating systems or devices). Therefore when they are making their decision they like to know what they are getting will work and that they will be able to use it for a while before a newer, better product is out that they maybe have to spend more on to upgrade too. It can be seen with Windows that Microsoft caters to this approach. Generally its about 3 years between releases of Windows and even those releases often alternate between “major” and “minor” releases.

Its with this same approach that other products from Microsoft are released, Office and Internet Explorer are two other good examples of this long product iteration cycle.

However consumers want things now. They don’t want to wait 2 years for the next big thing, they want to play with it today. If the company they use don’t offer new features soon then the competition will and the consumer is likely move to that other, more feature rich product. Consumers also like numbers and stats. They may not fully know what they mean or how it will affect them but that doesn’t really matter. This fast iteration approach is not what Microsoft is used to but it is learning.

You might be wondering how the Xbox was able to do so well being a consumer product from Microsoft. I think its because it fits in very well with the company’s business approach. The Xbox console has a many year life expectancy. Microsoft don’t imagine users will want to buy a new console 1 to 2 years just like businesses don’t want to buy a new version of Windows every year. Microsoft were left to iterate slowly on top of the hardware adding new software capabilities, just like they do with Windows with Service Packs, releasing a new update each year. This has been the model for Xbox for quite a few years and the Xbox is now doing very well but it is now facing new competition from far more companies than it has ever done before. People now have more choice of devices for their TV than ever before.

Up until recently the Xbox was viewed as a games console but Microsoft are moving it to also encompass entertainment in general which sees it directly competing with more than just Sony and Nintendo. As this happens Microsoft know they need to move more quickly and as such they will be releasing an update for the Xbox this spring, only a few months since the last update to the Xbox. This shows a new approach, a faster iteration approach, an approach best suited to a consumer product. Time will tell if releasing more frequent updates to the Xbox will help its popularity, I am very sure it will. Microsoft perhaps then does understand what the consumer needs.

Perhaps an even better example of Microsoft understanding the consumer is Bing. Before Bing Microsoft’s search was only updated infrequently and its usage was very small. Since the launch of Bing Microsoft have worked hard to bring updates to the decision engine regularly, first every few months and now far more often, even weekly. This appears to be paying off as month on month Bing’s usage share is growing, not by much but its growing. As of February Bing is now the world’s second most used search engine behind Google; it is a long was behind though. It appears that when Microsoft iterated its search engine more frequently more people used it. Microsoft surely knows then that the more frequently they can update a consumer product the better it should do.

Talking about consumer products it only logical that I should mention Windows Phone 7. Sadly with this Microsoft don’t seem able to iterate at all. With Bing and the Xbox Microsoft owns everything making it very easy for them to update them often, however with Windows Phone many other companies are involved. This means the whole update process is slowed down. I have heard that “NoDo” has been ready since early January but due to carries it has not be sent out to Windows Phones and we aren’t expected to get it for the next few weeks. Another issue for Microsoft is that they have to update quickly, they can’t do what they did with the Xbox and have long periods between updates as the competition is just too great. I hardly need to tell you.

I do think Microsoft does “get” the consumer but it now needs to inform its mobile partners on what it is the consumer wants. Microsoft’s mobile partners are a far bigger issue for Windows Phone 7 than any missing feature. Microsoft could easily implement any feature it likes for Windows Phone 7 in a few months but if its partners hold up the update for months then its all for nothing. Consumers wont have confidence in the platform.

I was actually hoping to write about something completely different in this post but I think there is enough in this post as it is so I will write a follow up post in the coming days. Its about the consumer vs. business life cycles but about Windows.