Microsoft Mandate: Out With the Old, In With the Upgrade

Hispanic and African American small-business owners use computers as much as their non-minority counterparts, but research indicates they are slower to upgrade their technology.

It’s a pattern Microsoft is eager to change. So the tech giant has challenged Lopez Negrete and GlobalHue to persuade minority business owners to invest in updated software. The agencies were hired last week, following a review, to produce creative work targeted at Hispanic and African American consumers.

The Redmond, Wash., company has found that 67 percent of PC-owning African American and Hispanic small businesses use 5-year-old versions of Microsoft Windows and Office. The company did not supply numbers for non-minority businesses.

“There are a lot of [minority] small-businesses owners who still use the same preinstalled software from five years ago,” said Joanna Fuller, Microsoft diversity marketing manager. “They could be using [newer] software more efficiently.”

Research by IDC, a Framingham, Mass.-based information technology and telecom market-research firm, indicates that more than 90 percent of minority small-business owners use computers. Though 36 percent of all small-business owners said they plan to buy a new machine (with new software) soon, only 19 percent of African Americans and 15 percent of Hispanics have the same plans.

Neither Microsoft nor IDC could say why minority firms don’t upgrade more often, but Fuller said those companies tend to have less access to capital and, since they are often smaller than their general-market counterparts, less time to learn about new technology.

Microsoft’s minority business was formerly handled by UniWorld Group in New York, a WPP-backed shop. Fuller said efforts from Lopez Negrete in Houston and the Miami office of IPG-backed GlobalHue will be “more focused on small-business customers.”

Sources estimated each account to be worth $1-2 million. But spending will probably be higher, said Gayle Cruise, Microsoft manager of diversity marketing and communications. She declined to be specific.

Cruise said Microsoft launched the review because “we decided, in fiscal year [2004], that we wanted to have tighter integration working with [IPG general-market shop] McCann-Erickson. And we wanted two separate agencies with a deeper knowledge of each of the targets.”

The campaigns will break in August and will likely involve print and Internet, she said. Microsoft will handle media for the minority accounts in-house, Cruise said. IPG’s Universal McCann handles general-market media.

Microsoft spent $300 million on advertising last year, according to TNS Media Intelligence/CMR.