InformationWeek

Marekting Memo: Does It Sound Like The Real Thing?

See Microsoft's Response

By Stuart J. Johnston
March 10, 1997

One aspect o f watching Microsoft over the years is that there have been ample opportunities to learn about the company's marketing techniques--if through nothing else than constant repetition. There have also been many Microsoft documents that have been leaked from time to time, and there tend to be certain similarities among them.

With that in mind, this month I'd like to present what purports to be a marketing memo from about three years ago that was supposed to have been distributed inside Microsoft on how to deal with customers who have already purchased Lotus Notes. I'll let you know in advance that the general technique is to "damn with faint praise," which is a classic Microsoft marketing ploy.

Now, the person who forwarded the memo along to a co-worker of mine thought it had been penned by Bill Gates himself. After all, it ends: "Good luck, and please keep me informed as to your progress. Bill."

Having read quite a number of Bill's memos over the years, though, I'd have to say that this one--if it w as actually written inside Microsoft--could easily be the product of a committee, appearing under Bill's signature. It's language has none of the color or eccentricities of Gates' usual writing style.

In fact, as implied above, it is true that I have no absolute proof that this memo came from within Microsoft. A Microsoft spokeswoman said she could not confirm whether the following is indeed an official company memo. Still, the structure and purpose of the language, its tone, and the thought processes reflected in it indicate to me that, if this was not written inside Microsoft, someone went to an incredible amount of trouble in order to exactly describe a classic Microsoft marketing technique. And why?

The memo, excerpts of which I've presented below, has none of the biting humor that you�d expect it to contain if someone had intentionally written a parody. And I can think of no other point that any counterfeiter could have been trying to make by forging it otherwise. So that three years later, someo ne might decide to base a column on it? I don't think so. To incriminate Microsoft? There is nothing that I find particularly incriminating.

Instead, this illustrates a well-oiled marketing machine�s strategy to counter a major competitor's products through spreading fear, uncertainty and doubt (FUD), and by somewhat overpromising the capabilities of its own, yet-to-be released products. There is nothing unusual about that. I can remember plenty of discussions with Microsoft competitors where they tried to do the same thing, although usually they were less effective than Microsoft's premier marketers.

After pondering this for a couple of months, I finally decided to put it to the ultimate test of authenticity: you.

So think back over the past three years of your meetings with Microsoft sales reps or of private meetings with Microsoft marketers. If you recognize things they said to you in these words, then I submit that this is the real thing.

But before I go on, let me point out that I have much respect for the Microsoft marketing machine-- as my very first online column pointed out last October. Neither am I condemning such marketing techniques out of hand. Perhaps I've just gotten too cynical, but I consider myself a pragmatist.

We exist in an industry that could have given lessons to the Byzantine emperors on parrying, feinting, and scheming. And if you want to canonize any company in the battle against the "evil" Microsoft, I'm afraid you'll have to hold your nose, because they're all guilty of wanting to be "emperor of the universe," and of trying some pretty ugly tactics in that pursuit, from innuendo to outright prevarications.

None of these companies necessarily have your best interests at heart, and in terms of competing, some are better at tactics and strategy than others. They are all fierce competitors and their main goal is always ultimately market dominance and the massive profits that go with it. We do still live in a world where the ancient Roman sign still hangs in t he marketplace: Caveat emptor (Let the buyer beware).

Still, it is probably useful to look at an illustration about how the Microsoft "group- think" process translates into a discussion of how the subtle turn of a phrase can be used to try to gradually shift your purchasing decisions until you're headed in the direction that they want--in this case, towards Microsoft's bank instead of Lotus/IBM's. To be able to recognize a technique for what it is, a clever marketing technique, can help you resist such manipulation, if that is your choice.

What might make you somewhat uncomfortable--because it certainly does to me--is that it is so calculating to undermine your confidence in a particular product. It also promises a bit more functionality in Microsoft products that were then in the works than was actually delivered in their first release. More than anything, however, the memo provides a script for assailing Notes in Microsoft accounts. It reminds me of telemarketers with a script to make you feel immed iately insecure about yourself so that they can maneuver you into a sale.

So is the memo real? You be the judge.

"Subject: Notes

During the past few months, I have grown increasingly uncomfortable with our collective response to the threat of Notes. While the positioning of this product was essentially botched by Lotus during the first several years of its existence, it has nonetheless gained tremendous significance in the eyes of both the industry and our major customers. While it remains the situation that few can tell you what Notes actually is, customers now spontaneously think of Notes when the words "workgroup" or "groupware" are mentioned. What comes to *your* mind when "groupware" is mentioned?

. . . . . . . .

The situation now appears to be out of our control; as you well know, virtually every one of our major corporate accounts has cornered one of you and asked how our applications will work with Notes. Due to clever marketing, Lotus has positioned Notes in these customers' minds as a "platform," convincing them that it has some kind of underlying architecture that resembles system software. Although we've estimated that Lotus has only sold about 350,000 copies worldwide [Editor's note: according to recent industry estimates there are 8.24 million Notes seats deployed], the high acceptance rate of Notes within our major accounts is extremely disturbing. These are the only people who care about systems architecture; if we fail to capture their mindshare, do you have any idea how expensive it will be to regain it?

. . . . . . .

But as we learned when launching WFW [Windows for Workgroups], it has proven surprisingly dangerous for us to publicly assail Notes. Notes-bashing is not a sensible solution, first because we can't risk alienating our major accounts who have already embraced the product, and second because we don't currently provide an acceptable alternative. We m ust take an indirect approach to the problem, positioning it as an isolated application and as complementary to our products. The "one-two punch" of our anti-Notes message must be: 1) to disarm the situation by complimenting Notes on the desktop, demonstrating how well the product integrates with Microsoft desktop applications through standard Microsoft technologies such as OLE and MAPI, and 2) to introduce uncertainty in the customer by making it very clear that our systems infrastructure is much more robust than Notes will ever be, that they don't have any experience with systems or infrastructure, and that there will be no need for their back end once our systems are in place.

In short, make the customer feel OK that he made both the Notes purchase decision and the Microsoft Office purchase decision, but make him think very carefully about enterprise-wide deployment.

. . . . . . . . . . . Finally, here's a quick-reference guide that can be used to make potential clients nervous or insecure about Notes, while not alienating them in case they actually do buy Notes:

1. Remember that, in the presence of a client, you should always "be apparently respectful" to Notes, especially if that client is a major account.

2. Always focus on how well Microsoft Office applications work with Notes because Notes was an OLE pioneer, working very closely with Microsoft. Always add that the other Lotus applications were "followers," and have always had abysmal OLE support.

3. Use a number of methods to introduce uncertainty about the "back end" in the customer's mind. The following have been tested and are known to work:

a. They have a directory, but I've heard that it doesn't scale to the size of your organization, and the one in Notes Version 3 was rewritten and has problems.

b. Due to the large Microsoft development community, we already know that virtually every vendor of messagi ng programs, systems , and services are working on Microsoft EMS [Exchange messaging server] integration. I'm really not sure yet how Lotus is going to integrate with EMS.

c. The Notes security stuff was good when it was developed, but that was in 1984. And I've heard that they've had some security problems lately--related to the fact that it wasn't in the operating system.

d. The biggest problems [sic] people seem to have with Notes is in getting support from Lotus. The integrators who install Notes seem incapable of dealing with any but the simplest of problems, and Lotus itself is very slow at problem resolution--they clearly don't understand what it takes to run a mission-critical enterprise system!

e. The next version of NT, Cairo, has a fully *replicated*, distributed object file system, and I'm not yet sure how Lotus is going to integrate with it. A very large development community is already working with the pre-release development kits. You rea lly should ask Lotus about it.

4. If you're sure that they're going to install Notes (or already have bought it), make sure that you pitch NT as the preferred server environment. Once NT is "in the door", it will be much easier for us to supplant Notes on the back-end with NT Version 2 (Cairo).

"I'm sure that you've heard that the Notes Server is a dog on OS/2, but they've been working with NT for years and it's a screamer, especially due to the SMP [symmetrical multiprocessor] support."

"Yes, I've heard that the NLM [NetWare Loadable Module] is faster, but it's VERY unstable and can't scale due to the lack of SMP."

"Because Notes is difficult to manage remotely, you can use Hermes [Systems Management Server] to manage your Notes Servers."

. . . . .

- We will be producing a "Chicago Office" suite to counter any potential Notes-based suite threat. After installation, all Office applications will have apparent "shell-level" integration.

Good luck, and please keep me informed as to your progress.

Bill"

Well. What do you think?

For complete text of the memo click HERE .

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