Report pans Windows PCs, lauds Macs on customer experience

18 Apr

Posted by erikbowman as Uncategorized

Through its recent "Laptop Hunters" ads, Microsoft has done a good job making the case that Windows PCs are less expensive than comparable Apple Macs. But even if PC buyers end up with more money in their pockets, they often turn out to be less satisfied with the overall experience than Mac users do, according to a Forrester Research report released today.

The new report adds more detail to Forrester’s 2008 Customer Experience Index, released late last year. Among computer makers, Apple was in the top position, with a "good" rating of 80 percent, according to a post today by Forrester analyst Bruce Temkin. Compaq, HP and Gateway scored between 63 percent and 66 percent, while Dell came in at the bottom, with a 58 percent ranking.

Dell "was rated well below the other firms in the areas of being easy to work with and being enjoyable," Temkin writes.

The report is based on questions posed to 4,500 U.S. consumers about their interactions with the companies.

Of course, Windows is the common thread among those PC makers, and it’s obviously contributing to the overall experience, but how much of the blame should Microsoft get for the results? That question illustrates one of the challenges inherent to Microsoft’s core strategy of supplying software for a variety of hardware makers: It’s ultimately not in full control of the customer experience.

That strategy of focusing on software has been key to Microsoft’s success in the market, and leads to a much wider diversity of Windows PCs. It also means that Microsoft is relying on partners to deliver the final product in many cases.

Microsoft has been making a big effort to work more closely with PC manufacturers in recent years, and the results of that closer collaboration have been evident in newer machines. But in comparison, Apple handles everything from software and hardware to, in many cases, the actual sale of the computer and any follow-up service.

However, the New York Times Bits blog quotes Forrester’s Temkin calling the results a "wake-up call for Microsoft," saying that consumer impressions of the Windows "ecosystem" played a major role in the negative ratings for PC makers.

Temkin reiterates that sentiment in his own post. "The Windows ecosystem," he concludes, "needs an extreme customer experience makeover."

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and Report questions state’s support of Oak, while WSIB shifts on VC

Is the Washington State Investment Board — which manages billions of dollars on behalf of the state’s teachers, firefighters, judges and other public employees — tossing good money after bad? That’s the premise of story by VentureBeat’s Matt Marshall who takes a hard look at the lackluster track record of Oak Investment Partners, which is reportedly raising a new $1.5 billion fund with support from the WSIB.

The report comes on the same day that Pensions & Investments reported that the WSIB was not going to pursue future venture capital investments and had terminated its venture capital consultant. Liz Mendizabal, spokeswoman for the $67 billion pension fund, told the online publication that they may make selective investments in venture capital, but they no longer will actively seek out new funds.

Citing reports from the state pension fund (which are publicly available here), Marshall calls Oak’s performance mediocre. The Connecticut and Silicon Valley firm — an investor in Jamba Juice, Huffington Post and others — showed a positive internal rate of return (IRR) of just 1 percent and 5 percent for its two most recent funds.

Interestingly, there’s a Seattle area firm that is faring much worse. OVP Venture Partners, which is not currently raising a new fund, shows a negative 13 percent IRR for its 2001 fund and a negative 16 percent IRR for its 2006 fund, according to WSIB data as of September 2008. Given the poor M&A and IPO markets over the past eight months, those returns have likely dropped further.

Of course, venture firms can turn the performance around in a hurry with one big home run. But with the exit markets pretty much closed — something OVP’s Chad Waite mentioned in my last interview with him — it will be hard to reverse course in the short term.

VentureBeat’s report focuses on Oak, but some of the same arguments that Marshall makes could be applied to OVP and other venture firms. Of the VC firms that have raised multiple funds with the WSIB over the years, OVP is among the worst performing, according to the WSIB’s report.

Marshall says he’s been stonewalled in his attempts to get information from the Washington State Investment Board about its support of Oak, noting that his calls have not been returned over a period of three years. "The silence is odd, given that most public institutions routinely call back reporters when they have questions," he writes.

Interestingly, Oak has been involved in some of the most successful venture-backed companies in the Seattle area over the years, though of course its performance is judged across the portfolio rather than one geographic region. It was an investor in aQuantive, which sold to Microsoft for $6 billion in what still stands as the software giant’s biggest acquisition.

It also backed Qpass, Tegic Communications and SnapIn Software, all of which sold at handsome valuations.

I do not have information on the amount of money Oak made in those deals, and as a later-stage investor its payoffs may have been small or non-existent. The firm also invested in Trumba, Talisma and some smaller Seattle startups, which didn’t fare as well.

Marshall does point out Oak’s very respectful 55 percent IRR on its 1998 fund, but he also raises questions as to why the firm has been able to stay on the list of "trusted firms" given its more recent performance. The report also has some interesting analysis on the take home pay of partners at VC firms and the problems with so much LP money flowing into the industry.

Both stories are worth a reading, and a more in-depth follow-up.

[Flickr photo via purpleslog]