Why Microsoft Is Winning the PR Battle With Big-Tech Companies?
Despite the big tech companies being in hot waters with the regulators over the past few years, Microsoft has somehow been able to avoid the scrutiny faced by its peers during the same time. This is an amazing feat provided that Microsoft has had its own history of legal battles with antitrust regulators but the organization has done a great job to be on the right side of the fence over the past few years.
As someone who is interested in technology and business strategy, I have been observing big tech companies and their business strategies for the past several years and I think Microsoft is easily winning the PR battle with the other Big-Tech companies. Microsoft is not just being an observer on the sideline but is also helping the government regulators by posing viable alternate options to reduce the dependencies on its competitors.
Australia’s News Media Legislation
Even though big tech companies like Google and Facebook will not admit it but Microsoft was instrumental in helping the Australian Government to strong-arm Google and Facebook into striking deals with the major media outlets to pay for news. The legislation that passed in Australia last month is just a start and there will definitely be more countries that would follow soon with similar legislations. When the Australian Government first talked about the news media bargaining code, Microsoft was quick to support the Government’s idea of a legislation to fairly pay the online media outlets. Microsoft also offered Bing as an alternative after Google threatened to quit offering its search engine in Australia.
Microsoft’s President and Chief Legal Counsel, Brad Smith, suggested that the U.S should adopt a similar media code that Australia has implemented and if the past few years are any indication of things to come, the US regulators will make sure that the big tech companies pay the media outlets their fair dues. Similar legislations are being considered in several other countries including Canada and India.
I think Google and Facebook couldn’t have handled the situation in Australia any worse. The PR damage caused by threatening to quit Australia by Google and by Facebook in removing the news from its feed in Australia for a few days were not limited to a particular country. Even worse, both companies ended up striking deals with the online media outlets after unsuccessfully trying to strong-arm the Australian Government and by doing so they lost any negotiating power with other Governments across the world.
While such legislations, if implemented in the US, would mean that Microsoft will have to pay some of its Bing earnings to online media outlets, Microsoft has placed itself in a very sweet position to score some big billion-dollar contracts with the Government.
SolarWinds Hacks
The infamous SolarWinds Supply Chain Attacks that happened a few months ago were one of the worst in federal government history. Microsoft took the lead and obliterated the actions of some of the most sophisticated hacking efforts in recent history. The speed, scope and the scale at which Microsoft was able to respond was tremendous.
Microsoft again came to the rescue of the Government and in the process demonstrated its prowess in cybersecurity which is one of the fastest growing cloud segment for Azure. According to the last earnings call of the company, its security revenue went up by over 40% in the last 12 months and for the first time hit $10B in revenue.
The way Microsoft was able to flex its muscle through its control of the Windows Operating System will come a long way to make big enterprise customers more comfortable with their Cloud security.
App Stores
In June 2020, Brad Smith, Microsoft’s President and Chief Legal Counsel, asked the Governments on both side of the Atlantic to look into the unfair control that Apple has over its iOS App store. Amidst the public spat between Epic Games and Apple, along with the pressure from regulators and other companies, Apple finally conceded to cut its commissions on its App store a few months ago. Last week, Google made a similar announcement for its Android Play Store as well. Whether you call it a distress move or an Olive branch offering, there is no doubt that the big tech companies are conceding more than they would like due to the pressure from the Government.
Similar to the Australia’s news bargaining code, Microsoft is set to lose some of its revenue on its Xbox app stores but Microsoft is not leaving any stones unturned in taking advantage of the fact that the tech titan has been able to avoid any scrutiny by the regulators.
Final Words
The past few years have had the regulators across the world hellbent on making the big tech companies pay over issues like unethical collection and use of data, privacy, market control, etc. Microsoft, under the leadership of Satya Nadella, has been able to execute its strategy of being a partner to the Government at a time when its competitors are butting head with the regulators and this strategy seems to be working really well for Microsoft.
By putting some of its revenue at risk by supporting increased scrutiny of the big tech companies, Microsoft is putting its competitors at a bigger disadvantage by highlighting their biggest problems.
