When it comes to companies, there aren’t many bigger than Microsoft; they have over 75,000 employees in over 100 countries and more than $50 billion in annual revenue. While Microsoft’s product focus is definitely software, they do compete in a number of other markets such as gaming consoles, consumer hardware like mice and keyboards, and media and content such as MSNBC. Less visible is the product experimentation that goes on at Microsoft. You’re more likely to hear about Google employees tinkering with ideas and side projects (thanks to the company’s “twenty percent” time) but the fact is, Microsoft employees are a creative bunch.

You’ve likely heard all about the successful experiments. Not just the “big bets” as Gates likes to call them, or the interesting things that happen at Microsoft Research, but projects that almost never made it to market, like J. Allard’s Xbox. But what about the flops? As our exploration of Microsoft’s Internet TV initiatives proved, the company is certainly not afraid to experiment, taking the good with the bad. And Microsoft has had its fair share of bad. Let’s look now at some of the company’s more interesting “digital lifestyle” flops.

Smart Personal Objects Technology (SPOT)

Sold under the brand MSN Direct, SPOT is Microsoft’s attempt to create more intelligent everyday devices, like a watch that can show the current weather in addition to the time. The technology behind the devices is called Microsoft DirectBand, a wide-area wireless network that “utilizes unused FM radio spectrum” to communicate with the devices. The service is supported in over 100 cities in the United States and Canada, and a number of electronics manufacturers have created and sold compatible devices.

Why it’s a flop

Though technically still on the market, the SPOT initiative was launched way back in 2002, and has changed very little in the five years since. In addition to watches there are now coffee makers and GPS units that support MSN Direct, but that’s about it. How many people do you know that own a SPOT device? I don’t know any. The one thing keeping SPOT even marginally interesting is the .NET Micro Framework that Microsoft released earlier this year, and chances are developers will find far more innovative ways to use the technology than Microsoft has.

It’s also worth noting that SPOT’s goal of making small bits of information available to users wherever they are has already been achieved to a large extent by services like Twitter. With SMS support and a number of weather, news, and financial bots available, why fork over the money for a SPOT device?

Microsoft Automotive

Microsoft’s attempts to create software and other technology solutions for automobiles are almost legendary – who hasn’t heard a joke about a car running Microsoft software crashing and needing a complicated reboot? Like SPOT however, Microsoft is still plugging away at the idea, with three products currently available: Windows Automotive, Microsoft Auto, and Windows Mobile for Automotive. The success of these products is up for debate – the news page is quite sparse, but the Windows Automotive page proudly mentions Ford Sync, a vehicle set to launch this fall.

Why it’s a flop

I still do not drive a Microsoft-powered vehicle, and I’m guessing you don’t either. Chances are — that won’t be changing anytime soon. Almost ten years of making announcements, and yet ending up with very little in the way of tangible products, make Microsoft’s auto projects a disappointing flop.

Microsoft Networking Hardware

Microsoft has been quite successful in the peripherals market, with mice, keyboards, and webcams all selling relatively well. Their foray into networking hardware back in 2002 was a major failure, however. Called wireless base stations, the MN-500 and MN-700 were billed as easy-to-use broadband routers. The devices included a built-in firewall, support for NAT, WEP security, and software that would automatically detect Internet settings. Microsoft also produced a variety of wireless networking adapters.

Why it flopped

There is a lot of competition in the market for networking gear, and it seems Microsoft just wasn’t committed enough to stick it out. Faced with poor sales, Microsoft discontinued their networking equipment after only a couple years. But they didn’t stop there – all associated web pages at microsoft.com are gone too. Only the support information remains. It’s almost as if Microsoft wanted to forget all about their routers. Fortunately, the Internet doesn’t forget.

ActiMates

Strangely enough, Microsoft has dabbled in the toy industry. In the fall of 1997 the company announced ActiMates Interactive Barney, an “innovative early-learning system” for young children. The idea behind the toys was actually really cool – the plush Barney toy would “come to life” when a special broadcast of the popular children’s show came on TV. Microsoft eventually released seven different characters, including Barney, Arthur, and the four Teletubbies.

Why it flopped

Price was probably the main factor which led to the demise of the ActiMates toys. With a starting price of $99, they were not cheap. Combined with a certain “creepiness” factor, it’s not hard to see why the toys failed to catch on.

The Digital Home

You could argue that Microsoft has the entertainment aspect of “the digital home” covered quite well with their current product offerings. TV, movies, music, and photos are easily stored and transmitted digitally, and products like the Xbox 360 make it easy to work with all kinds of media. Yet Microsoft has for years been promising much more than just entertainment.

One need look no further than the annual Bill Gates keynote at CES. Sometimes he has used the event to launch new products, but more often the keynote is all about looking into the future. Kitchen countertops that assist with recipes, bedroom mirrors that double as television screens, digital picture frames, biometric door locks, and intelligent rooms that recognize individuals as they enter to adjust preferred lighting and temperature settings. Truly awesome ideas that could have a big impact.

Why it flopped

Too bad the ideas have never been implemented. The “Microsoft Home” prototype does actually exist at the company’s Redmond campus, but the technology included within isn’t yet commercially available. The company talks about the advanced house almost every single year, yet it never seems to move any closer to commercialization. It’s sad, but Microsoft’s idea of the digital home is nothing more than “vaporware”.

What will they come up with next?

Microsoft is larger and more successful than ever, so don’t be surprised if their product experimentation becomes even more varied in the future. There will most certainly be more flops, but they’ll hit a few out of the park too. And don’t forget about their announced products that have yet to launch – Microsoft Surface, Windows Home Server, and Windows Live Folders, to name just a few. Will they be major successes, or big disappointments? Time will tell!