MICROSOFT'S RETAIL MISSTEPS
When Turner was brought in, many questioned how his consumer retail background would play in an enterprise software company. Now, with Microsoft apparently poised to make more of its own hardware, and going even harder after consumers, Turner's background could be advantageous.
At WPC, Turner said Microsoft is planning to have 101 retail stores open by next July, including its first store in China. Microsoft already has 76 retail stores in the U.S, Canada and Puerto Rico, and Turner described these at WPC as "very, very strategic" to Microsoft.
In 2009, Turner vowed that Microsoft would open retail stores in close proximity to Apple stores, as a way to literally bring the fight to Apple's doorstep. Level Platforms' Sobel says Microsoft is still playing the role of feisty underdog.
"Microsoft has always been an organization that's at its best when it's being competed with. They love having their backs against the wall and feeling like an underdog. And in retail, they are the underdog to Apple," Sobel said.
Sid Parakh, senior vice president of equity research at McAdams Wright Ragen, a Seattle-based investment firm that covers Microsoft, sees this as a solid strategy. "If Microsoft is going to build their own devices, just from a distribution standpoint, and highlight the value added in a retail environment they control, it's probably a good idea to showcase products directly to the consumer," Parakh told CRN.
On the other hand, Microsoft's botched retail-only strategy for Surface led to it taking a $900 million write-down in July for Surface RT. While there's no indication that Turner is on the hot seat for sluggish Surface sales, that could change if the rumored second wave of devices sells no better than the first.
There's no denying that Turner has helped Microsoft and that the experience he's applied from his days at Walmart has turned Microsoft into a leaner, meaner business. But it's just as clear that Turner's style has changed Microsoft culture, and in some cases, trampled over some of the things that Microsoft did well but were not easy to standardize, sources said.
"Microsoft did not have a command and control culture -- they had a 'do what Bill says' culture, and you could interpret that in various ways," said one source. "But if you did the right things and served the interests of the company, you were fine. With Turner, that changed to a 'get with the program' culture and a 'do it my way' culture."