Can Microsoft Develop a Successful Mobile OS?

Last week Microsoft announced that it was ready to launch Windows Phone 7 - just in time for the 2010 holidays. And by the classic Microsoft playbook, Windows Phone 7's (re)emergence into the marketplace was going to be accompanied by serious moolah - a lot of it to the tune of at least $1,000,000,000 on the launch, half of it on marketing alone.

Will Windows Phone 7 achieve the success Microsoft is looking for? I have my doubts. Microsoft dominates the desktop computer operating system market. It has done so for decades. And it is precisely this dominance in the desktop OS market that leads me to have my doubts.

Back in the '90s when PDA's still existed, I really enjoyed using my Palm V for all my appointments, contacts and note-taking. Thanks to PalmOS, the performance was really zippy, start up was quick, and battery life was good. I then tested the Compaq iPAQ which used Microsoft's Pocket PC operating system. My experience: slow boot up time, slower performance and shorter battery life. It was as if Microsoft was attempting to cram an entire desktop computer operating system into a tiny little PDA. Sure, the iPAQ could do a heckuva lot more than the Palm V could. But therein is the crux of the problem: a bloated one-size-fits-all OS (who the heck really used Excel on a PDA) versus an OS built for exactly the use case of the device.

Now I've never used a mobile device running Windows Mobile, so I can't personnaly comment on how this OS works compared to RIM, iPhone, Android, and PalmOS. But according to Millennial Media's MobileMix July 2010 report, Windows Mobile OS has a 4% marketshare of U.S. smartphones (a complete freefall compared with a 19.7% market share in October 2009).

So it would appear that Microsoft still struggles with producing a meaningful operating system for portable devices.

My point is that I'm not yet convinced that Microsoft's engineers are capable of producing a competitive operating system within a constrained form factor. Since the very beginning, Windows was all about including more and more features resulting in a resource-hungry, feature-bloated operating system.


I'm old enough to recall good ol' MS DOS which used to fit nicely on a single floppy disk. But with each "upgrade" to Microsoft Windows came the need to have it running on beefier and beefier hardware. More processor power, more RAM, more disk space, and more power. Windows 7's system requirements now include 1 to 2 GB of RAM and 16 GB of hard disk space - that's 16,000,000,000 bytes, or 13,000 of the old 5.25HD floppy disks which if laid end-to-end would equal a line over one mile long!

Earlier this summer, Microsoft CEO Steve Ballmer was quoted as saying that mobile devices are just like PCs in a different form factor. There are different ways of interpreting this statement. My interpretation is that Ballmer feels that mobile devices are just like desktop PCs but shrunken down to pocket size. I don't get any indication that there is any understanding in the halls of Redmond that mobile operating systems are fundamentally different than desktop operating systems.

In my opinion, for Windows Mobile 7 to be successful, there are three required elements:

1. The OS kernel must be completely re-architected from the ground up for mobile devices, AND


2. The chief architects of Mobile 7 must be completely new blood; not a single one of them should have ever worked on the Windows desktop operating system, AND


3. The team must allowed to innovate - free from the internal politics, turf wars, and meddling hands of old-school executives (Mssrs. Gates and Ballmer included).
   

Only if Windows Mobile 7 can be cultivated in this Microsoft corporate contaminant-free environment will it be a success.

Can it be done? One word: Xbox. The Xbox team has been allowed to function semi-autonomously and the results are evident. According to Bloomberg, Xbox became the #1 U.S. game console last March.

Microsoft has proven they can do it...and can they do it again?

Your thoughts? Can they do it? Leave me your comments.

ShopAlerts and Shopkick - Two Different Approaches to LBS

We've all heard the business plans for Starbucks rewards being broadcast to your mobile device just as you pass by. Apparently that's just something that sounds nice but doesn't translate to reality. If it did, then certainly Starbucks would have already done it by now.

It's refreshing to see new ideas emerging that represent the next step in monetizing Location-Based Services (LBS). Startups like Placecast and Shopkick exemplify two different approaches to the same opportunity.

Placecast got some press last spring with the announcement of their ShopAlerts program. In a nut shell, consumers who enroll in this program receive text messages from their favorite brand whenever they are physically near a retail outlet, or other location of interest.



The ShopAlerts technology uses "geo-fences" that are boundaries of a certain radius as defined by the marketer. Any consumer who has opt-ed in to this program receives a text message as soon as they cross this virtual boundary. The idea is to take advantage of people's likelihood to respond to a call to action requiring in-store participation through things like special offer alerts or other types of notifications.

The nice thing about ShopAlerts is that it will only send a maximum of 3 messages within a given week from a retailer. And, of course, to comply with SMS marketing regulations, consumers can opt-out at any time simply by texting "STOP" back to a short code.

Shopkick takes a different approach. Instead of using cell towers to triangulate the consumer with text-messaging as the vehicle of communication, Shopkick relies on in-store broadcast devices and a mobile device app.

When you walk in to a Shopkick-enabled store and your app is running, your mobile device will pick up a high frequency signal from the device and record your presence in the store. Once it's recorded, you get awarded points, or "kickbucks", which are redeemable for in-store discounts or even cross-brand promotions (e.g. Facebook Credits).



The approach that ShopKick is taking is that there is a distinct value to a person physically in-store versus a person physically "near" a store. This is especially helpful for physical locations where cell tower triangulation is not possible or certainly not as accurate at identifying a person's precise location within the store.

I applaud both Placecast and Shopkick for continuing to innovate in the field of LBS marketing. I don't see them as competing but rather as complementing simply because their approaches are founded upon different assumptions.

In the Placecast model, ShopAlerts is like the sideshow barker, whose job it was to grab your attention as you were walking by, and get you to do something that you originally weren't planning on doing.


In the Shopkick model, the consumer is specifically going to the retail outlet either in direct response to a prior call to action or just because there is a totally unrelated need to go there.

Personally, I'm less likely to respond to the ShopAlerts model and more likely to respond to the ShopKick model. As I mentioned in a previous blog post, when I'm out of the house, I'm usually going from Point A to Point B - fast. I'm not interested in detours to my flight plan. On the other hand, I like BestBuy (one of the brands piloting ShopKick). I shop there quite frequently 'cause I like shiny things with little blinky lights. As long as I'm already there, it's nice to be rewarded.

I'm thinking that Shopkick is good for brands whose own online marketing efforts still relies heavily on in-store conversions. For example, Hot Topic is a clothing retailer whose prime market is the 14-18 year old. Hot Topic has a strong online presence with not only its branded web site, but also its Facebook page with almost a million followers. The catch is that 14 year olds aren't old enough to have a credit card, so calls to action for online purchases are not very effective. As a result, almost all of their promotions - online and email - are designed to drive in-store traffic. So for this brand, awarding Kickbucks to their online followers that are redeemable in-store at Shopkick-enabled outlets could be a resonator with this audience.

So...are any of you subscribing to either ShopAlerts or ShopKick? I'm unfortunately not living in an area where either of these two services are being tested, so I can't comment on my personal experiences. But if any of you are, I'd love to read your comments.

Social Email - Real-life Feedback

Last week, I attended eTail East in Baltimore. This was the first time that I've ever been to Baltimore, and I was hoping to get an opportunity to be a tourist and have my picture taken outside the door of Charm City Cakes. But alas, time was too tight and I wasn't able to get there. As a consolation prize, I got a chance to sit on the outside deck at the Hilton with about 20 other guests and watch the Orioles win their game against the White Sox in extra innings.

But I digress...

At eTail, I had the opportunity to be a roundtable host on Email Marketing and Segmentation Day. This was the first time that I had ever been a roundtable host - much less participate in such an event. It's a pretty interesting format where attendees sit in a large ballroom at - you guessed it - round tables, each one seating up to twelve people. The job of the roundtable host is to facilitate conversation among those seated at the table on a particular topic. Together with my colleague from Hot Topic, my topic for discussion at my roundtables was "Social Email: What's New? What's Next". After twenty minutes of discussion, a bell rings and the roundtable hosts get up from the table, move to another table, sit down, and then have another twenty minute discussion on the same topic with those seated at that new table.

This time, there were six tables with about twelve people at each. So I was able to have great discussions with about eighty people - the majority of whom were responsible for their respective companies' email marketing programs. I met people from the U.S., the Netherlands, Belgium, and Germany, who represented both consumer brands (Zappos.com, Staples, and Amtrak) as well as one gentleman whose company sold cable ties and molded connector components.

My company chose social email for my discussion topic because we wanted to talk directly with online marketers and see whether the adoption of social media marketing was as widely adopted as industry analysts and members of the marketing media would have us believe.

For of all, I am a believer in social email. Brands are using social sites as a means of providing a venue for their customers to engage with each other as well as with the brand itself. Social sites are all about one-to-many conversations. Email marketing, on the other hand, when done correctly includes content that is personalized and relevant to the individual, making it a one-to-one conversation. There are times when it's appropriate to have a one-to-many discussion and there are times when it's appropriate to have a one-to-one discussion. (How many times has it been when you've been in a meeting - a one-to-many discussion - and someone says, "let's take that discussion off-line" - a one-to-one discussion).

So, after talking to about eighty different online marketers, here's what I learned about social email:

1. In spite of what's being reported in the media and analysts, marketers are still experimenting with social media marketing.


2. Easily 98% of marketers I met at the roundtables are "doing social media marketing" only because "everyone else is"; there is no clear strategy for using social media as a new marketing channel.


3. Using a social site just to promote products and services is falling flat. Using social sites to drive community engagement is what's working the best; the real question is whether social media is appropriate for all brands, i.e. is anyone in the B2B space that is getting good engagement from Facebook?


4. Marketers are struggling with proving real ROI with social media marketing. As one person put it: "I have one hour to spend either on email marketing or social media marketing. Email marketing is a known quantity with known ROI; social media isn't. It’s a no-brainer to choose email marketing over social media marketing in that light."


5. The majority of brands I spoke with have separate people doing social media marketing and email marketing. As a result, coordinated strategies between social media and email marketing are minimal.


6. Using social media as an opt-in source for email marketing is resonating very well. Hardly anyone is doing it, and when I mentioned the advantages of doing it, there was consistently a lot of head nodding and enthusiastic note taking.


7. "Share-to-social" is "been there done that" and is falling flat. Marketers are not seeing any benefit to this tactic.


8. User-generated content (e.g. user-entered product reviews) is a HUGE resonator. As one attendee put it, "If you’re not incorporating user-generated in your emails today, you’re already behind.


9. Strategies for combining social and email marketing in a coordinated strategy was an eye-opener to almost everyone I spoke with. There was certainly a lot of interest to learn more.

Social sites are excellent channels for building your opt-in email database with highly qualified leads. Assuming that your brand has already set up a social site, then people are already engaging with your brand through posts, "friend"-ing, and "like"-ing. If you provide email opt-in capability on your social site, then anyone going the extra step of opting in to your email marketing program is a person seeking a deeper, more personal engagement.

So, is your brand using social networking sites? Is so, what is it being used for? For pushing promotions? For building community? Anything else? Leave me a comment. I've love to hear from you.