The sad (but respectable) demise of Microsoft Spot

Microsoft announced last week that it's discontinuing its Spot data watch program.

The trouble with predicting the future is that it's always easy to do in retrospect. Looking back, it's obvious that Microsoft's Spot products were a dumb idea. The concept was that Microsoft would send small bits of wireless data -- weather forecasts, stock prices, etc -- to specially-equipped watches and other small devices like refrigerator magnets, which would display the information. On the face of that, it sounds kind of appealing. There are definitely people who want information like that when they're on the go, and Microsoft had a clever plan to use some unused FM radio bandwidth to deliver the information to the devices. You'd use your PC to pick which data feeds you wanted, and Microsoft would take care of blasting it onto your watch or other device.

The problem, of course, is mobile phones. Five years ago, when Spot was announced, the handset vendors and operators were already getting hot on delivering small bits of data to mobile phones. The market for Spot, rather than being everyone who wanted data on the go, turned out to be everyone who wanted data on the go who didn't carry a mobile phone.

In other words, almost no one.

Like I said, it's easy to point out that problem in retrospect. But Spot was probably in development for a couple of years before it was announced, meaning it was probably started in about 2001 -- before the real rise of wireless data in the US. I think someone who was paying close attention to the mobile market could have predicted Spot's troubles. But it was much less obvious then than it is now.

Once you as a manager put people on a project and spent some money on it, it's very easy to talk yourself into ignoring emerging signs that the product might fail. You want the thing to succeed, so you have an incentive to rationalize away any concerns. Besides, business history is full of stories about products that succeeded despite adversity and critics. How can you tell the difference between a "normal" pothole in the road, and an impassable rift?

Lessons from Spot's demise

In the early 1990s, a number of companies developed specialized wireless modems and private wireless services for delivering data to personal computers. Internet connectivity at the time meant slow dial-up connections for most people, which could not be left active at all times. The idea of blasting data to PCs in real time seemed very attractive, and indeed the products sold well for a few years -- until Internet connections became faster and didn't require dialing out on a phone. Spot ran into the same basic process in the mobile space.

So one lesson is that when you're potentially competing with other sorts of networks is to look very carefully at where they'll be in three or four years.

How to manage convergence. It's very hard to predict how "convergence" will affect a product category. Fifteen years ago many people thought it was obvious that printers would soon be built into every PC, but it never happened. Convergence seems to happen only when there is absolutely no downside to it. So you can combine a printer and scanner -- or a mobile phone and a Spot watch -- because there is no loss of functionality in the resulting product. But put a printer in a PC and you have to sacrifice too many things (or the PC gets too darned big).

Because a mobile phone has a larger screen than a watch, it's actually a better data device than a watch. That should have alerted Microsoft to the danger.

Solve real problems. I've mentioned this before, but it's worth repeating: Products have a much better chance of succeeding when they solve major problems for customers. Spot was cool and convenient, not life-changing. That made it much easier to absorb into some other product.

Microsoft often gets criticized by people in the tech industry for failing to innovate. According to this perspective, all Microsoft does is copy things that others have already proven. But initiatives like Spot are an exception to that rule. I wish Microsoft had chosen its battle a bit more carefully, but I respect that fact that it tried. I wish it would take more chances like this, rather than just focusing on ways to imitate the iPod and copy Google's advertising business.

Some other commentary on Spot:
An early discussion of the technology, from InfoWorld (link)
Engadget's article (link)
Watches vs. mobile phones (link)
Enthusiastic review in 2004 of the Tissot $750(!) Spot watch (link)
An obituary in 2006 for the discontinued Tissot Spot watch (link)


By the way, I apologize for being away from the blog for so long. Family and work issues have to be my top priority, and the blog is in line after that.


Stefan said...

Sort of, kind of, not really related, but I simply can not wait to hear what you have to say about Microsoft Mesh.

tamberg said...

.NET Microframework - the technology behind SPOT - is well alive.

Phillip Lindberg said...

I worked for one of the terminal manufacturers when Spot was initially ramped up. The big questions - e.g. how does it hold up against the (true) competitive set? - could never be answered.

The whole exercise drew our best and brightest away from far more compelling core business cases. The company is still paying the price.

So here's an additional lesson; when you're a small fish be highly diligent before you jump into an experimental tank with a big fish - lest you be eaten...or left high and dry.

Ask the big questions, and interpret no answer as a very stong indicator.

Thanks rock.

Michael Mace said...

Thanks for the info, Phillip. Very interesting stuff.

Stefan wrote:

>>I simply can not wait to hear what you have to say about Microsoft Mesh.

Oh, man, that's a huge subject. I'm still trying to get my head around everything that Microsoft has been doing. I think it's pretty clear that they want to assemble a comprehensive alternative to the open source web apps ecosystem. It's an incredibly ambitious plan, and I don't understand all the pieces of it, but at least it's worthy of a company of Microsoft's size.

Thanks for asking, and I'll see if I can pull together a post on it.

John Gordon said...

I get the sense you've been resisting, but I think you ought to give the iPhone a good go this June, when the SDK (and perhaps iPhone 2.0) are out.

It would be a good balance to writing about the long list of mobile items receding into history (Palm, SPOT, Microsoft Mobile, etc).

Michael Mace said...

Dang, John, I was almost done with my post on the IBM 360.

Thanks for the iPhone suggestion, but the one I've got my eye on is the iPod Touch (I've always been a two-piece guy)...