Redmond may be the new Detroit

Microsoft is haunted by its reputation.

In the 1960s and 1970s, Detroit earned a reputation for a certain level of quality in its products. Cars were designed, built, and sold -- lots of cars, since U.S. automakers had no significant competition -- with a level of quality that was ... less than it could have been. Cars were designed with "planned obsolescence", built to last for a few years or a few thousand miles. Exhaust systems would rust, vinyl roofs would shred, and gas mileage was low. But with no competition, Detroit had a quasi-monopoly on the market. (There was some competition from automakers in Germany, France, and Japan, but it was small.)

In the late 1970s, the price of oil (and therefore gasoline) rose, and people became unhappy with their cars. Japanese automakers designed and built cars that were efficient. Those cars were also reliable.

Japan quickly acquired the reputation of building reliable, efficient cars. Detroit acquired the reputation for "gas guzzlers" and shoddy workmanship.

Detroit learned a hard lesson, changed its ways, and built better cars. They were more efficient, safer, and more reliable. Detroit improved the quality of its product and now produces cars that are of equal quality to Japanese cars.

Yet the reputation lingers.

Within companies, the sales and marketing folks are very conscious of "the brand" and do things to maintain the companies "image". They run advertising campaigns and conduct customer surveys. Reputation is the customer's version of brand management. It's not managed, it simply happens. Whatever customers think of your brand becomes your reputation. And Detroit earned the reputation for unreliable and inefficient products.

Which brings us to Microsoft.

Microsoft is the Detroit of the software world. It has a long reputation of building buggy, bloated applications. And until recently, it was the only game in town -- if you were using computers, you were using Windows. (A few rebels used Apple or Linux, but they were on the fringe, much like the folks who drove foreign cars in the 1960s.)

Just as the Japanese automakers moved in to the American market, Apple moved in to the PC market. Apple now has a significant share of PC sales and software sales. (Linux remains fringe, except in the server arena.)

Detroit changed its ways, and Microsoft is making changes to Windows. The Windows 8 line, with its "Metro" GUI and the Windows App Store, is a big departure from the old Windows. The old Windows provided a platform (Windows), office software (Word, Excel, Exchange, Outlook), development tools (Visual Studio) but left the market open to all others. Anyone could write and sell applications for Windows (and many people did). Windows PCs were open in the sense that the owner (or administrator) could install applications from any source - Microsoft, third-party providers, or even in-house developers.

The brave new world of Windows 8 changes that. Apps (at least, apps for the "Metro" side of Windows 8) must come through the Windows App store, much like iPad apps must come through iTunes. This change will allow Microsoft better control over the quality of apps, and allow it to filter out poorly-written apps and malware. It improves the quality of apps in the Windows environment.

With these changes, Microsoft may be able to achieve a level of quality that equals (or perhaps even surpasses) that of iPad apps.

Which brings us to reputations.

Will improved quality be enough for Microsoft? Or has the market assigned a reputation to Microsoft? The reputation of buggy software may limit Microsoft's growth.

For Microsoft to succeed in the market, they must provide software of a higher quality than Apple, and they must build a reputation for reliable software.

I believe that they can do it. But I believe that it will take a lot of control over the products that are released in the Windows world. A level of control that is on par with Steve Jobs' obsession with quality. And I am not sure that the existing market of Windows application providers is ready for that.