Microsoft versus Apple

Amar Pandit , CFA , CFP

Amar Pandit

A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.

Let me clarify something about this post. I am not referring to the legendary rivalry between these 2 giants. I wanted to give a very different example that you might not have heard and share a valuable insight. Understanding this will help you look at your business and competitive advantage from a very different perspective.

In my visits to the US, I always make a point to visit the Apple Store in a city. I tend to observe and learn several things during my visits to these stores (not to mention that I end up buying something or the other). In one such visit, I went to an Apple Store in Freehold Mall in New Jersey. There was no place to stand in the store like has been my experience in many Apple stores in different cities. Additionally, if you happen to visit during one of their iPhone launches, then there is literally a queue outside the store. People in New York and other cities line up for several hours. Such is the power of not only the brand but also the product experience and the entire ecosystem (I will not digress here, but I have something to write on the brand front too which I will in a separate post).

In the same Freehold mall, there was a Microsoft store too. After visiting the crowded Apple store, I used to visit the Microsoft store too (I visited it for several years). This store would generally be empty with literally 3-4 people hanging around. Generally, I would see more of their staff than customers buying something.

Why do you think this is? 

Think about it for a minute. 

By the way, in June 2020, Microsoft got out of their brick-and-mortar retail business taking a $450 million charge. This part of their business was actually a legacy of the Steve Ballmer (ex-CEO of Microsoft) era, but Satya Nadella rightly realized that this is not what Microsoft is about nor is this in their DNA.

Let me explain what I mean by this.

Apple had built a very strong DNA of Design, Premium Products, and Client Experience (whether it be in opening the box, after sales and even using the product seamlessly with other products). They know their customers extremely well and know what it takes to run a premium consumer business.  

Microsoft on the other hand had a DNA of Enterprise Software, Operating Systems, and very different types of products. They had a very different DNA (Mindset, Culture, and Skills) than what a typical consumer business requires. They were used to selling to Corporations and the focus of their products was never on design or client experience. I am yet to hear someone say, “I love the Microsoft Operating System or Microsoft Products.” This is because the focus was on delivering utility and not an experience.

The similarities between these businesses to the common eye are the following:

  1. Both are technology businesses
  2. Both have a Brand 
  3. They have deep pockets and tons of cash

So, it was felt that Microsoft could easily get into the retail business selling the way Apple does. 

However, the reality is completely different. Just like Google could not build the next Facebook (by the way they tried hard with Google + and failed miserably despite having users come on their search engine by the billions every day not to mention that Google too had tons of cash), Microsoft too couldn’t build an Apple type experience in their stores because internally they didn’t have what it would take to build the Apple business. It would take a complete reengineering of the organization right from what their priorities are to products, skillsets, team, thinking, culture and 1000’s of other things.

Just building stores like Apple without changing the operating system of the store (and the people in it) and the business would only lead to failure.  

So how is this relevant for you and what are the lessons?

The key lesson to learn is just copying someone’s office or website or product will not make you successful. You would be naïve to think that technology alone can solve your problem or having a nicer office, or a better website would do the trick. Many of the distributors and RIAs I have a call with are quick to jump and say – Technology will fix my problem or Marketing will fix it. Taken together or one at a time none of them would make a material difference till you change the Operating System of your business and more importantly YOUR Internal OPERATING SYSTEM. 

The first step in doing this is to believe that you have something of immense value for your customer. The second step that is as important as the first one is to figure out the business you are in. I have written quite a bit on this subject. Refer to my previous post that will give you some perspective on the business you are in. The next is to figure out what would it take for you to reengineer your entire business right from the clients you take on board to your offering, client experience, process, workflows, deliverables, prospect/client meetings, and marketing (there are many others, but this is a great place to start).

The next lesson is just throwing money or people after problems will not solve your problem either. The third and final lesson is to not just learn the game you are playing but to be the best in it. Think and evaluate the game you are playing, whether you have the skill sets to be successful, the results you have got so far, the problems you are facing and the corrective actions you need to take.

You need to be truthful with yourself on this front else you will end up fooling no one but yourself. 



P.S. Your internal Operating system is a combination of your values, beliefs, thoughts, skills, and learning. This is absolutely key. To give an example, if you do not believe in yourself, no one else will. Think about it.