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Sat, Nov 21, 2009 - 02:38 AM EST  —  AAPL: 199.92 (-0.59, -0.29%)  |  NASDAQ: 2146.04 (-10.78, -0.5%)

Microsoft’s last retail store attempt was a dismal failure
Friday, February 13, 2009 - 09:29 AM EST

"After news yesterday that the software giant was plunging into the retail market, I was surprised to find little mention that Microsoft’s last store effort that ended in failure," Kara Swisher reports for All ThingsD.

"MicrosoftSF," Microsoft's last grand retail attempt, "was located in San Francisco’s Metreon Sony Entertainment Center," Swisher reports. "The huge 8,500-square-foot store with 160 Microsoft products and related software and hardware from 30 partners was billed in a June of 1999 press release, as 'an interactive, hands-on retail environment in which people of all ages, from all walks of life and at all levels of technological expertise can explore the benefits technology can bring them. Far more than just another computer store, microsoftSF is a showcase for the latest technology from Microsoft and the hardware and software companies with which it collaborates,'" Swisher reports.

Swisher reports, "And Microsoft CEO (then President) Steve Ballmer weighed in enthusiastically: 'We are delighted to be able to showcase in this one-of-a-kind retail environment the entire range of Microsoft software and hardware, as well as the technology of other companies who share the vision of how the PC and the Internet can empower people any time, anywhere. San Francisco and the Silicon Valley are home to the world’s largest and one of the most sophisticated high-tech audiences, so this was the natural place to create this site–dedicated to showing, in an interactive environment, the way technology can enhance our working, learning, living and playing.'"

Swisher reports, "Not so much, as it turned out. The store closed in 2001."

Full article here.

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Feb 13, 09 - 09:31 am Comment from: Jw

C'mon, these stores will easily bring Microsoft as much revenue as their Zune, Xbox and other Microsoft Entertainment Division products bring in. Oh wait, those have been money losers since their inceptions. I still stand by my comment.

Feb 13, 09 - 09:48 am Comment from: millenium12

hahahahahahaha LOOOOL - this one is great wink

Feb 13, 09 - 09:56 am Comment from: AppleJack

Is this report fair? I read different article, and it said that so-called store was only a big display showcase, but that no actual MS retail sales took place there. Is this the state of contemporary journalism?

Feb 13, 09 - 09:59 am Comment from: DH

What a bunch of knuckleheads. Hopefully they'll place their stores next to Apple Stores so consumers can get a real look at computers that are easy to use and ,asthey say, just work. Dell was going to open retail stores and realized what a disaster that would have been.

Feb 13, 09 - 10:03 am Comment from: DreamTheEndless

Ha - I've been there. There were cash registers and sales staff so it wasn't "showcase only" I didn't quite get the point of it at the time. I guess I still don't.

I was much more interested in the Where the Wild Things Are exhibit/theme park/store/thing... Also - the discovery store was cool also.

Feb 13, 09 - 10:05 am Comment from: 84 Mac Guy

The Microsoft brain-trust strategy meeting in Fall 2008:

- Any Apple ideas we haven't copied yet?
- How about their classy stores?
- Great idea! Who should we get to plan these?
- How about someone from Walmart, because when people think class they think Walmart.
- What will be our biggest challenge in opening stores?
- Hiring enough IT people to keep the computers keep functioning after those pesky consumers touch them.
- What should we call the store?
- Since we have no original ideas and the "Apple Store" is already taken, let's use the name we tried before: MicrosoftSF
- What's SF stand for?
- Steve's Folly.

Feb 13, 09 - 10:05 am Comment from: Harvey

There is a fundamental problem here. Before one opens a store, one must have merchandise.

Feb 13, 09 - 10:19 am Comment from: Harvey

In other words:

Wiley Coyote ties another anvil to his foot and tries to throw it over the ravine to hit the Roadrunner.

Grandma Microsoft will never learn.

Feb 13, 09 - 10:20 am Comment from: Randian

"Any Apple ideas we haven't copied yet?"

How undeniably true, 84 Mac Guy. Each and every day brings another prime example of Microsoft's abject emulation (read that "envy) of all things Apple. The management of that company is shockingly vacuous and devoid of any sense of creativity whatsoever.

Shame on you, Microsoft. Bury your head (what's left of it) in the sand and let the true innovators get by!

Feb 13, 09 - 10:20 am Comment from: Mr. Reeee

Microsoft DOES innovate!

They invent things that make not just your money, but their own money disappear.

Brilliant!

Feb 13, 09 - 10:20 am Comment from: Bizlaw

Now, now, be nice.

After all, where else can you go to see a Big Ass Table? They don't exist in the wild.

Feb 13, 09 - 10:22 am Comment from: Rob

But wait, now they have Zune, Xbox, and possibly the greatest thing to be introduced in 2009, ZunePhone...M$Phone, or whatever it might be called.

I think this is good news, let them flush their money down the drain.
They don't get it, they don't get that they are not Apple.

Feb 13, 09 - 10:22 am Comment from: Viktor

..."world’s largest and one of the most sophisticated high-tech audiences,"

high-tech??? You must be kidding me, most of the microsoft users uses windows because they don't know anything else. Even corporate IT administrator does not change to Mac mostly because they don't have knowledge of anything else besides windows.

I understand that some times you need to have Internet Explorer for some pages that the ignorant who created put some lock to use only IE, or some other applications. But 90% of the day to day operation on the desktop users can be more easily done with Macs. And besides all that, Mac users always have the most advanced software, they were the first to have Audio on the computer, Mouse, Graphic, CD Rom, SCSI, Digital Audio, built in camera, etc....

Feb 13, 09 - 10:24 am Comment from: Rob

Oh, and one more thing...

They should rename their company to MicroMe or MeTooSoft, really.

Feb 13, 09 - 10:24 am Comment from: Jw

I think the funniest part of the whole story is that Microsoft has this great idea. Their stores will employ "Gurus" (no similarity to Geniuses) that will be there to help users with technical issues.

Once the first Gurus drop dead from overwork, will Microsoft be charged with accessory to murder?

Feb 13, 09 - 10:26 am Comment from: Bizlaw

I heard they'll also have a booth where you can go in and record a message about how great phantom Windows OSes are.

Feb 13, 09 - 10:33 am Comment from: Steev

Ahh finally a venue for that B.A.T.

There'll be BSOD tabletop in every store.

Feb 13, 09 - 10:35 am Comment from: Zune Tang®

Wow. I can smell the fear in the MAC sheep this morning. This is the day MAC has dread: Microsoft will enter the retail space. Your MAC astroturfing will have no effect on consumers who get to experience the empowering and innovative technologies from Redmond. Microsoft technology can enhance our working, learning, living and playing. It's a paradigm shift.

And Microsoft copies MAC? Puhleeeeeze. You MAC fangirls tell a lie often enough you start to believe it. I-Cal this: In 18 months I'll be squirting with multitudes of former I-Pod lemmings in the Zune Zone section of the Microsoft Store. I'll bet my Zune Points on it.

Your potential. Our passion.™

Feb 13, 09 - 10:49 am Comment from: dukemeiser

lol, no flame bait in the last post that I can see...

Feb 13, 09 - 10:51 am Comment from: Just Remember

May Steve Ballmer run Microsoft long enough to run it totally into the ground!!

Q: What can we learn from Apple's struggle to innovate during the decade before you returned in 1997?
A: You need a very product-oriented culture, even in a technology company. Lots of companies have tons of great engineers and smart people. But ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great pieces of technology all floating around the universe. But it doesn't add up to much. That's what was missing at Apple for a while. There were bits and pieces of interesting things floating around, but not that gravitational pull.

People always ask me why did Apple really fail for those years, and it's easy to blame it on certain people or personalities. Certainly, there was some of that. But there's a far more insightful way to think about it. Apple had a monopoly on the graphical user interface for almost 10 years. That's a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly.

But after that, the product people aren't the ones that drive the company forward anymore. It's the marketing guys or the ones who expand the business into Latin America or whatever. Because what's the point of focusing on making the product even better when the only company you can take business from is yourself?

So a different group of people start to move up. And who usually ends up running the show? The sales guy. John Akers at IBM (IBM ) is the consummate example. Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they're no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn't.

Q: Is this common in the industry?
A: Look at Microsoft (MSFT ) -- who's running Microsoft?

Q: Steve Ballmer.
A: Right, the sales guy. Case closed. And that's what happened at Apple, as well.


http://www.businessweek.com/bwdaily/dnflash/oct2004/nf20041012_4018_db083.htm

Feb 13, 09 - 11:05 am Comment from: Derek in Milan

Never underestimate the sheer stupidity of politicians, businessmen, industry leaders, executives etc.

Microsoft and Dell prove this every day.

Feb 13, 09 - 11:09 am Comment from: Harvey

Microsoft is copying the Apple Geniuses with Microsoft Gurus? I think they call them Gurus because they'll be in India. The Guru Bar will have house phones that you use to talk to them or computers for online chat. Did I guess it?

Feb 13, 09 - 11:12 am Comment from: received

i think Microsoft has this crazy idea that their customers actually like them.

Feb 13, 09 - 11:20 am Comment from: @received

90% still use them with Windows 7 coming out and it promising to be better than Vista (and it only needs to be better) it will regain marketshare

Feb 13, 09 - 11:23 am Comment from: MM

What will help Apple grow is new products that should have been announced....

iMacs, Mac mini and Mac Pro... all in serious need of an upgrade

With Jobs on medical leave, you can see how its affected Apple.


Apple's life cycle is generally 6 months for a computer update.

The Mac mini is over 15 months old
The iMac is going to be 11 months old
The Mac Pro is old in todays world.

Feb 13, 09 - 11:47 am Comment from: Demon

The real problem is Microsoft is in decline and Ballmer is desperately trying to save his bacon. He see Google as beating the snot out of them in search and online services (in other words Advertising Dollars), Android is becoming a threat to Windows Mobile too. Apple's iPod and iTunes is hammering the Zune & Zune Market place so hard that it can't gain and keeps loosing the market-share it took away from it's old partners of Play for Sure DRM. The iPhone has just trounced all over the Smart Phone market to the extent that Windows Mobile is looking to have less market-share then Palm in the next round of stats. The MacOS has gain a 10%+ market-share in the computer space and HP, IBM, Sony, Dell and the rest keep the pressure on Microsoft to claim Vista is a failure and let them keep selling XP. All the while HP, IBM and Sony are exploring the possibility of selling computers with customized Linux distributions which could damage MS lucrative OEM sales channel. Linux is already damaging Microsoft's Windows Server OEM distribution channel to the point that Microsoft has started to threaten hardware Vendors with removing their Windows OS OEM Status. While Dell has Backed off the Linux Server flogging HP and IBM are moving forward in their Marketing of Linux Servers over Windows OS based Server. Once the Mac OS market penetrations continues to climb over the 10% mark and start to head to that 15% mark it will be too late for Microsoft to stop the erosion of the market. Linux will continue to broaden it's reach in the server space and MacOS will start to play a bigger and bigger role in the Desktop space.
Microsoft Opening retail stores on the cheap will not change that fact. A Microsoft retail store will need to generate about $980.00 per square foot per month for the store to break even. To profit the stores will need to generate $2,000.00 per Square foot pre month. But, that is in Middle-tier Retail space not the upper tier Retail space where Apple locates it's stores. Apple's Stores by contrast generate about 10 times on average per store, that of what a small Middle Tier Microsoft retail store would need to generate to be profitable (or $2000.00 per square foot on average per store). The only way Microsoft could generate that sort of Revenue is to charge for Classes, and Guru Support, this however would be a negative for the retail effort which could then collapse is serious losses. Microsoft doesn't really have enough products to fill much of a retail space. Even a Radio Shack sized space would be on the large size for a Microsoft store. Plus Microsoft does not have much in the way of physical products let alone any compelling products.

Feb 13, 09 - 12:31 pm Comment from: HuskerMac

@recieved

90% still use them with Windows 7 coming out and it promising to be better than Vista (and it only needs to be better) it will regain marketshare.

It will gain market share from whom? Those who have crossed over to Apple are not likely to return to Windows.

Feb 13, 09 - 12:36 pm Comment from: therepguy

And a wal-mart guy is going to change anything... Microsoft has become such a joke!

Feb 13, 09 - 12:37 pm Comment from: qka

@Demon

White space is your friend.

Use it to make your post more readable.

Thanks!

Seriously, while you may have had something good to say, just looking at solid lump of text hurt my eyes; I didn't bother to try to read it.

Feb 13, 09 - 03:00 pm Comment from: Gosh

made on a Mac:-)

Feb 13, 09 - 08:53 pm Comment from: Road Warrior

Zuney dude, still more of your bets and predictions, that's quite some gambling debt you must be accumulating. Earlier this week you have said:

"one year from today Apple will recognize their folly and cancel the debacle which is was the I-Phone."

Of course way back in November 2006 you made a similar prediction about the ipod:

"I told you the lack of FM was the Achilles heel of the iPod. I would say that for that reason alone we're going to see a flip-flop in market share between the iPod and Zune in less than a year."

http://macdailynews.com/index.php/weblog/comments/11792/

Of course I can't recall you ever stating how wrong you were about that prediction.

And now you are saying this:

"In 18 months I'll be squirting with multitudes of former I-Pod lemmings in the Zune Zone section of the Microsoft Store. I'll bet my Zune Points on it."

Well first of all when you make a bet you have to offer something of value. Second of all, congratulations, I am glad the doctors have given you 18 months to live. That might be enough time to complete a course at Gambler's anonymous.

Feb 14, 09 - 08:54 am Comment from: another random mac person

"The Mac mini is over 15 months old
The iMac is going to be 11 months old
The Mac Pro is old in todays world."

And they all have classically simple designs that will stand the test of time. Update the insides yes, but a for factor design change for the sake of change is just a dumb idea.
FWIW I have an "old" Mac Pro and the thing is a monster. I don't need an upgrade.

Besides, to all the new Mac switchers, those models all appear new to them.

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