Microsoft loses ability to FUD

Something interesting happened in the recent few years, something that has gone unnoticed.

Microsoft has lost its ability to "FUD".

"FUD" is an acronym for "Fear, Uncertainty, and Doubt". It is a marketing technique, used (if not invented) by IBM in the mainframe era.

FUD can be used only by a large, established company. It is a bullying technique, in which the large company prevents customers from purchasing products or services from smaller competitors.

Here's how it works:

Step 1: Company A, the large established company, has a dominant position with some set of products or services.

Step 2: Company B, a smaller company, introduces a new product that changes the market. Perhaps it is a new product, one that uses a different paradigm from the existing products (which happen to be offered by Company A).

Step 3: Company A, perceiving Company B as a threat, talks with customers and claims to have a product or service that will perform the same functions as Company B's product. Company A tells the customer to wait for their product, and delay any purchase of Company B's product.

It's a neat arrangement. Company A can use their reputation to throttle the sales for Company B, simply by claiming to have a similar product. Of course, Company A's product will be compatible with the rest of Company A's product line, to which many customers are already committed. Company B loses potential sales, while customers wait for the offering from Company A.

Some may call it unfair. Perhaps it is. It allows a large company to keep market share, at the expense of small companies.

FUD works solely on reputation. A large company can use it, because they have a credible claim to deliver the promised product or services. A small company cannot use FUD; customers judge them only after they deliver.

IBM used this technique. Microsoft used this technique.

But Microsoft cannot use this technique today.

Legal challenges to Microsoft has forced them to use open formats for documents and spreadsheets. This allows competing products that can use the file from Microsoft products. New companies have introduced new products that do not compete with Microsoft, but exist in a different space (think "Facebook" and "Twitter"). Microsoft no longer dominates the market.

Customers can purchase products from Apple, Asus, and Samsung, and services from Amazon.com, Google, and even IBM. People and enterprises can purchase competing products for Microsoft Word and Microsoft Excel, without fear of incompatibility.

Customers have lost their fear of Microsoft. Now, Microsoft has to prove their worth to customers.