Metrics Approach Tackles Vista Launch Issues

May 1, 2007

BY MICHAEL KRAUSS

Wow, something different is going on in marketing at Redmond, Wash.-based Microsoft Corp.

The 1995 rollout of Windows 95 was a landmark product launch. The New York Times called it a “computer age milestone.”
Microsoft founder Bill Gates relied on a compact, consumer-focused burst of $300 million in promotional spending. Gates spent $12 million to secure the rights to use the opening chords of the Rolling Stones’ hit Start Me Up, which became synonymous with Windows 95. It was a masterpiece.

The 2001 launch of Windows XP was powerful. Microsoft spent a reported billion dollars on the launch, but as Wired magazine commented, the Windows XP launch was “hot, but not Windows 95-hot.”

Today the company that launched shrink-wrapped software with sizzling blasts of promotional media is singing a new song. The rollout of Microsoft Vista, Office 2007 and Exchange Server 2007 is an ambitious, sophisticated and calculated effort that will someday be a model case study in integrated marketing at the world’s leading business schools.

Where the Windows 95 launch relied principally on consumer-focused broadcast media for impact, the present rollout is modular, highly targeted and tightly integrated. It reflects the transformation in the world of marketing and media and uses best-of-breed tools for optimal effect.

“Microsoft has been evolving its marketing approach in a pretty substantial way,” says Jon Roskill, U.S. business and marketing officer for Microsoft. “We used to be launch-driven. We’re thinking about the launch not as a point in time but as a continuum. We’re focusing on having a continuous conversation with the customer.”

Microsoft’s challenges are scale and complexity. “We’re the world’s largest software company,” says Roskill, who estimates Microsoft will achieve $50 billion in revenue in this fiscal year, ending in June, with companywide growth near 12% to 14% year-over-year.

“We’re growing about $6 billion a year,” Roskill says. “There are only two software companies in the world that are bigger than $6 billion dollars. We’re basically building the No. 3, the No. 4 software company in the world every year.” That’s a far cry from the days when Microsoft products were sold out of Egghead software stores.

Roskill describes multiple challenges to the marketing effort.

There’s breadth of target audience. “We go all the way from consumers and end-users to the biggest businesses,” he says.
There’s the product perspective. Clearly, Roskill is pumped. “We’re excited to have such a great set of products. This is the richest, most phenomenal set of products that we’ve ever had.”

Another challenge is the release climate. “In an ideal world you pick a date and say all of the products will release that day. We have an eight-month window of product delivery,” he says.

There’s the competition. Microsoft has competition in operating systems and applications from the open source movement. But the biggest competitor is existing Microsoft products and buyer inertia. “The challenge is our prior versions,” says Roskill, who strives to give end-users a reason to switch to the new products.

Microsoft partners add to the complexity. “From a partner standpoint, the scale we work with blows my mind. We have hundreds of thousands of partners. We start off with the chip manufacturers, Intel and AMD; the PC manufacturers, Dell, HP and Gateway. You also have folks we call system builders that serve small business. We have about 28,000 in the United States.”

Roskill also has a powerful set of channel partners to consider. Best Buy and Circuit City reps needed merchandising and training to sell Vista and Office 2007. “If you’ve been to Best Buy lately you have probably seen some of the materials my team built,” Roskill says.

There are market perceptions to contend with. “It has been five years between releases; that’s clearly a perception out in the marketplace,” Roskill adds.

To address the complexity, Roskill defined granular, metrics-based objectives for the rollout. “There were metrics by channel type or partner type,” he says.

Unlike the Windows 95 launch, the Vista, Office 2007 and Exchange Server 2007 launch was broken into phases. The initial phase focused on getting ready and building advocacy for the products among technical audiences. Creating enthusiastic advocates was critical. “Microsoft has a history of focusing on developers. We had a goal of getting 15 million enthusiastic advocates rolling in the United States,” he says.

The next step was trial. “We had 5 million people trialing Vista and Office in the pre-release cycle,” he adds.

The November focus was on business enterprises. Microsoft coordinated marketing efforts with their enterprise sales organization to drive the sales pipeline. There were concurrent efforts in the midmarket and small-business areas to “drive that partner-customer connection,” Roskill says.

In early January, Bill Gates gave a keynote at the Consumer Electronics Show in Las Vegas describing the broader Vista environment.

At the end of January, Microsoft rolled out a multifaceted global consumer launch. “There was over $100 million of advertising on television, some really neat things outdoors as well as a substantial presence on the Internet,” Roskill says. There were special events in major cities across the United States and around the world. Vista balloons and climbers rappelling down buildings in Times Square with Vista flags were just the tip of the iceberg.

Following that, Roskill says Microsoft invested in a major effort to transform leads into revenue, relying heavily on Web-based techniques.

Product delays spawned intense marketing thinking. Microsoft instituted the Tech Guarantee program to compensate for the lack of product availability for the holiday season. “That gave people who were buying computers the option to get a free copy of Vista through their OEM,” Roskill says. “It exceeded our expectations. We had about 12 million customers in the United States.”

“There was a lot of public relations,” he goes on, and efforts in consumer-generated media. “We worked hard with the bloggers. We did a scavenger hunt over the Internet that was called ‘The Game.’ ”

For Roskill, the highlight came at midnight on Jan. 30. “I was at Best Buy in Washington. They turned everything on. We had 500 people rushing in. All of our retail partners, CompUSA, Office Depot, they were geared up.”

Microsoft marketers once joked about the muffin-eaters. “We’d get people to come to conferences and special events to launch a product. They would show up and eat the muffins. We weren’t sure whether they actually did anything else,” Roskill says. “Now we’re hard-core about looking at our ROI.”

Michael Krauss is a president of Market Strategy Group, based in Chicago, and can be reached at Michael.Krauss@Mkt-strat.com or news@ama.org.