Microsoft Corp. CEO Steve Ballmer unveiled the company's "People Ready" software vision to a roomful of business executives and customers in New York last month, part of a sweeping realignment of the company's global sales and marketing organization and its worldwide partner network.
"People Ready," designed to communicate Microsoft software's value to business decision-makers, is being supported by a $500 million global marketing campaign. That campaign broke with an eight-page insert in The Wall Street Journal and The New York Times, as well as TV advertising during the NCAA basketball tournament. The campaign also includes out-of-home, digital and rich media advertising, as well as paid search.
The $500 million price tag does not include any advertising for specific upcoming product launches, such as the much anticipated and now-delayed Vista, Microsoft's next version of Windows. Vista will be supported by a separate budget, according to Microsoft executives.
"We'll be punctuating those [products] in a different way," said Mich Mathews, senior VP-central marketing group at Microsoft. The "People Ready" campaign unveiling was made less than a week before Microsoft announced it would delay shipment of Vista, which now is expected to be available to businesses starting in November and to consumers in January 2007.
"Businesses are based on people," Ballmer said, explaining that Microsoft's innovations and investments over the next 12 months will be centered on enabling unified communications and collaboration, content management, business intelligence, search, mobility, customer management, work flow and infrastructure.
Software as `enabler'
Thematically, "People Ready" is built around the premise that people, not faceless enterprises, close deals, invent new products, make decisions and find operational efficiencies.
Addressing the stiff competition with its biggest rival, Ballmer contrasted Microsoft's approach with IBM Corp.'s, which unveiled its own brand campaign in early March, just one week ahead of Microsoft.
Ballmer said Microsoft is staking out a different and distinct approach from rival IBM. He sees IBM's approach as more consultative in nature, whereas Microsoft's move is to provide technology as an underlying foundation that empowers people. "Software and technology need to be a tool," Ballmer said.
One Microsoft customer agreed. "There needs to be a strong technology foundation," said Tim Huval, CIO for Bank of America N.A.'s Global Wealth & Investment Management Group, who spoke at the event alongside Ballmer. "If someone calls, the information is the empowering tool to grow revenue and satisfy customer needs."
Rather than a defensive maneuver against IBM, Forrester Research analyst Ray Wang sees "People Ready" as an offensive campaign.
"I see it as a subtle offensive move," Wang said. "The antitrust suits are over. They're on the offense and rebranding the company. They are taking the throne that Peoplesoft once held with usability."
Another analyst said the campaign and its timing are based on reinforcing the company's bread and butter: Office and Windows.
"I think the reason they've come up with this campaign is that the two products they're refreshing over the next 12 months are their most important products," said Paul DeGroot, analyst at Directions on Microsoft, an independent strategic researcher that focuses exclusively on Microsoft. "Microsoft really needs those products to be successful," he said. "That is where their core strength is."
Microsoft products being introduced or upgraded in the next year—such as Vista, Microsoft Office 2007 (both Outlook 2007 and PowerPoint 2007), Office Communicator Mobile and Microsoft Exchange 12—are all part of the overall "People Ready" vision of empowering business users and individuals.
DeGroot said what Microsoft is not addressing in its marketing is its vulnerability. "I don't see the campaign as addressing Microsoft's pain point, which is fairly slow adoption of Office in office environments," DeGroot said, adding there is no obvious benefit to business users to upgrade, even for those businesses that own Windows licenses and qualify for no-cost Vista upgrades. "Why go to the expense of deployment and retraining," he asked.
"To get people to upgrade, Microsoft needs to come through with some kind of major feature or solve a major problem. Neither Vista nor Office 2007 really falls into that category."
Meanwhile, in the midst of the Vista delay, Microsoft announced it has restructured its Platforms and Services Division to align Windows and MSN assets, as well as target growth opportunities related to online advertising.
The new organization will be comprised of eight new and existing groups: the Windows and Windows Live Group; Windows Live Platform Group; Online Business Group; Market Expansion Group; Core Operating System Division; Windows Client Marketing Group; Developer and Platform Evangelism Group; and Server and Tools Business Group.
Senior VP Steven Sinofsky transitions from Office to the Windows and Windows Live Group, assuming responsibility for the process and planning of future versions of Windows. M