That’s because it is. There’s Consumer Microsoft and Enterprise Microsoft. Enterprise Microsoft products are mostly really great. Anything that’s tied to the consumer side can’t make its returns on fat B2B contracts, so they are forced to extract value otherwise.
Microsoft was never consumer-oriented, it was always a B2B/Enterprise-catering firm. They only tolerate retail customers because they don't want us getting used to something else.
Microsoft is largely B2B - it sells software licenses to OEMs for the hardware, and licenses to large corporate customers for productivity software like Office and SQL Server and so forth. Most of Microsoft's sales aren't people buying Windows in stores.
Salesforce.com is another example of a B2B startup which grew explosively.
Perhaps controversially, I think Microsoft's real "B2B" success comes from treating end users like crap. Arguably their only successful "end user" product line is Gaming, and that (on Windows) has grown with comparatively modest investment on Microsoft's part or with phenomenal (bought, third-party IP-based) software and a bucketload of cash (Xbox division).
Microsoft's true success in the business world comes from ultimately targeting managers – be they in an IT department or otherwise. They are afforded real power over users. GPC can deny a user the ability to do something with their computer that other users can do. Permissions can be very finely grained. Office has, for many years, come with some form of document-based DRM. Microsoft as a company seems to love DRM; they invented activation, for god's sake. The net result of this is that they know what managers like, which is, in fact, to manage. They centralise. They absorb. They have created a huge, confusing, proprietary computer-verse completely orthogonal to the rest of the world (except inasmuch as the rest of the world needs to interact with it).
A lot of their product line boils down to implementing MBA newspeek in disguise: clearly; writing good web software is difficult and a good business-orientated app features database, GUI and user-interaction parts – thus Dynamics CRM is born. It's not the business's "core competence" to redevelop those skills -- they're hard. Tie it in with their other B2B offerings and you have central control over both employees' performance, and customer's offerings, in a very tailored, swish way. Sure, other companies can do this (looking at you, Salesforce) but this is just one example. Salesforce can't also do, say, long-term archival storage on Azure for less than a cent per GB, and won't provide you with a calendar-and-meeting-filled video-chat app that is "free" with your existing subscriptions.
All of these things tick boxes. They provide "return" on the "investment" of paying the microsoft tax. The broader their product offering, no matter how shit it is to the poor saps that have to use it, the cheaper it effectively becomes. That's the true success of microsoft: they've always been big enough to do things well enough, conglomorate enough stuff, and amortise its effective cost over lots of different offerings. The net result looks good on an Excel spreadsheet, features that managers care about are there - and they keep getting business. (And end-users be damned!)
We'll have to disagree about your concept of what B2C means. MS did the right thing by its customers for RRoD; I wouldn't call that B2-anything.
My point was that the Xbox was /designed/ from the ground up -- from the choice of components to the way the OS is booted and managed -- to be a consumer product. The Surface, not so much. And it shows.
Edit: Let me be a little more concrete.
Xbox: No registry. Registries suck; they become corrupt, they're hard to manage, they accumulate bloat and mystery. If a consumer has to deal with a registry, it's epic fail time.
Surface: A couple weeks ago my wife was editing the registry on her Surface in attempt to recover it. OMFG.
Xbox: A pretty decent security story, with decent support in the OS.
Surface: That's cute, guys.
Xbox: Turn it off accidentally? Trip over the power cord? No problem.
Surface: What are these things you call . . . "transactions"?
The Xbox pricing also showed some backbone. I don't know what the Surface people were thinking.
Frankly i suspect MS would love to ignore the consumer world, except that then they would lose their beloved "total cost of ownership" argument for doing B2B sales.
Microsoft have always eaten their own dogfood. That's where Server and Office and Project came from...and obviously, Visual Studio.
Giving RT devices to employees continues this tradition. It's also evidence that this is an enterprise strategy, not B2C.
I used Windows 2.0. I was using WordPerfect when the first versions of Word were being developed. Surface is an MVP.
[edit]
A Note about Xbox. The way Microsoft handled the RRoD issue was pure B2B. They made it right for people out of warranty. Their choice of three years was the same as the period over which businesses depreciate assets. A B2C response would have been, "You should have purchased XboxCare."
I tend top agree...xbox excepted. I think Microsoft has worked very hard to get their platforms and tools into the enterprise space....and it has largely worked for them and been very successful. Has this been at the expense of a "consumer story"...maybe.
With that said, they can still be a very successful and growth oriented company but in the B2B/Enterprise space.
I'll agree there's a strange blind-spot in much tech reporting on Microsoft. It consistently misses Microsoft's stable, mature and solidly profitable B2B business. Even if worse came to worst, they could sail off into that land IBM pioneered, remaining happily profitable for decades to come.
But at the same time, Ballmer has made some horrible blunders. The XBox was nearly strangled by their obsession with beating Sony out of the gate with the 360. The Zune was a disaster. The years of utter denial regarding WinCE vs the iPhone and Android. Groove. Danger. Skype. The complete lack of a functional ecosystem between their own first-party products. [1] The critically successful Windows Phone being artificially hobbled by bureaucratic concerns [2]. Mismanaging the entire tablet sector for years, only to show up three years late with a confusing compromise...
In short, nothing but their B2B business (and you can lump much of their Windows licensing money in as part of that) has been run well.
[1] XBox Live vs Games for Windows Live, XBox Media Functions vs Windows Media Center, Zune vs XBox Marketplace (and don't get me started on the mess that they created when they tried to finally centralize media under the "Zune" service brand...)
[2] The name is absurd. Why not "Metro"? Why didn't they just put it on a tablet and call it a day? Why are they finally delivering a Metro-ish tablet, but under a different architecture and name and with some obtuse desktop metaphor lurking under the covers?
Microsoft cares about their B2B products. While end users complain about Windows being a bloated mess, corporations still see no better alternative platform for deploying and managing a fleet of thousands (or tens of thousands) of machines.
So while the article notes several times that "Microsoft is not making items that customers want", it seems that this is addressing the consumer customer. But isn't Microsoft addressing what the enterprise customer wants? And isn't this a serious chunk of where their income is coming from.
While I am not seeing flaws in the argument here, I am slightly skeptical, as for multiple decades I have witnessed many people underestimating Bill Gates, and now I wonder if that continues.
(I remember a time where Intel was skeptical of compilers produced by tiny companies such as Microsoft--they got no respect whatsoever.)
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