The astute BlackBerry Cool reader knows Thought — he’s the guy that makes about four comments on every post and once won a contest by rewriting War and Peace. Well, we dig his style so much that we asked him to write a guest article for us. Read on to see why Thought thinks RIM can beat Microsoft… by imitating them.
Those of us who are gadget fans love to focus on product models, analyzing every minute detail and making endless comparisons. Yet there is one model that we often overlook, and that is the business model. Indeed, a superior business model will often trump a superior product model. One very obvious example of this is the competition between Apple and Microsoft.
I believe it is instructive to consider the various business models used by the competitors in the smartphone market. As a beginning point, let’s look at RIM and contrast their business model to that of Microsoft, which right now I believe to be their main competition. It’s interesting that RIM’s major competitor would be a software company, rather a hardware manufacturer.
I summarize the business models of Microsoft and RIM as such:
Microsoft: brute force approach: flood the market with as many models and variations as possible; leverage the power of Microsoft dominance in the desktop PC environment, as well as in the Office suite of software.
RIM: perfectionist approach: emphasize usability, stability, security; obsess over every detail to get it right; manufacture both hardware and software to ensure optimal integration and user experience.
RIM’s focus on usability, stability and security in many ways mirrors Apple’s focus on these features. Also, like Apple, RIM manufactures both the hardware and software, and thus produces a very well integrated product. It’s no surprise that Blackberries enjoy a loyal fan following, like Apple products do.
However, there is one huge difference in the market evolution of RIM vs. Apple. Apple emphasized the consumer market while Microsoft gained an almost unapproachable dominance in the enterprise segment. While Apple created cool devices that delighted the consumer, Microsoft (obviously, with the aid of numerous hardware manufactures) sold millions and millions of dull beige boxes to businesses all over the world and became entrenched in corporate networks. Microsoft, in essence, gobbled up the business market very early on, and used that presence as a leverage point to outmuscle Apple in the consumer market. Apple enjoys a very well respected and lucrative niche in the market, but it is nevertheless a relatively small percentage of the total PC market.
In contrast, RIM has established itself first in the enterprise segment, and is the solution that is entrenched most in corporate and government networks. Microsoft is the one left trying to play catch-up.
This position is a huge advantage for RIM. To dominate the enterprise market is an enormous prize, and I don’t believe that Microsoft will have so easy a time dislodging RIM from its leadership position in that market. It is far more difficult to get corporations and government agencies to change than individual consumers. I also believe it is far easier to go from leadership in the enterprise segment into a position of strength in the consumer market, rather than the other way around.
I’ll discuss why in a future post.
