It would make sense for Microsoft Corp. (NASDAQ: MSFT) to enter the Cyber Monday race with Xbox, which gets a huge portion of its sales over the holiday. However, the software company has rapidly expanded its e-commerce based hardware business, in a challenge to Best Buy Co. Inc. (NYSE: BBY) and, on a much less ambitious level, Amazon.com Inc. (NASDAQ: AMZN).
The Microsoft Store, the company’s brick-and-mortar operation, is part of the marketing plan. Microsoft’s new promotion encourages consumers to visit these locations to benefit from discounts. At the same time, its online counterpart offers many non-Microsoft products that are powered by its software. Arguably, the Asus Transformer Book Flip with Office and a 360-degree rotating screen competes with Surface. Microsoft is pushing the Asus product hard anyway, with a price cut to $199 from the “regular” price of $349. Microsoft’s online store also is offering discounts on Acer, Dell, HP and Lenovo products.
Microsoft also is offering discounted versions of its own Surface 3 and Surface Pro 3, bundled with accessory products. Microsoft may be clearing inventory because consumers want the Surface Pro 4. Alternatively, the sales may be a means to get wider distribution for Windows and Office. No matter how much Microsoft wants to rebrand itself as a cloud provider, its core operating system products remain at the heart of its future.
One of the aspects of the Microsoft e-commerce site is that it has a wide array of products and accessories. It is actually not a Microsoft store at all, based on its product array from movies to apps (which include Amazon and Kindle).
Microsoft has gotten out of the “buy Microsoft or buy nothing” frame of mind. Its Cyber Monday sale includes gifts for the whole family, no matter which company makes them. The old walled-garden Microsoft is gone, in the hope an open garden will make it a more relevant part of the hardware and software sectors.