The Channel Wire

February 13, 2009

Microsoft earlier this week revealed plans to open several Microsoft branded retail outlets and hired a 25-year Wal-Mart veteran to oversee the effort. One could almost hear the peals of laughter from Apple fans and open source aficionados as they contemplated the software giant's foray into the gnashing teeth of the retail world.

But this actually won't be Microsoft's first retail rodeo: In 1999, Microsoft opened microsoftSF, an 8,500-square-foot retail space in San Francisco's Metreon shopping center, located about a block from where Apple's insanely busy San Francisco store is currently situated.

In microsoftSF, the company showed off more than 160 hardware and software products, as well as clothing, office supplies, and other trinkets adorned with the microsoftSF logo.

The microsoftSF store closed in 2001, but Microsoft probably learned much during its two-year stint in a city whose citizens revel in their loathing for all things corporate, but which gets a steady stream of shopaholic tourists.

Hopefully, one of these lessons was that retail stores are a tough place to demonstrate the magic of software to bored teenagers looking to kill time before a movie.

The microsoftSF store was organized in 12 so-called "lifestyle areas" where various products were displayed in real-life scenarios, including Windows CE mobile devices, home office, personal finance and business productivity software, and Windows-powered cultural and digital art galleries.

Obviously, much has changed in retail since 2001, and Microsoft may go in a different direction with its current retail push. But some partners wonder if Microsoft isn't stretching itself too thin by entering yet another market, this one arguably more challenging than any of the ones Microsoft currently plays in.

"It seems like Microsoft is closing the barn door after the cows have already left," said Scott Stanfield, CEO of Vertigo Software, a Richmond, Calif.-based software development firm and Microsoft partner. "I think it's a little late, although it's a good idea to give consumers a place to touch and feel Microsoft products."

Added Stanfield: "One thing's for certain: It's going to be an incredibly expensive endeavor."