Will Microsoft Departure Kill CES?

Can one major defector kill a trade show institution?

It happened with COMDEX – the show got so big that it exerted tremendous pressure on companies to spend more and more money to keep their coveted locations on the show floor. Location – being in the North Hall of Las Vegas was so important in fact that companies acquired others so they could improve their location! And as the desire to be in an important location increased, show organizers decided to increase the sizes of the booths exhibitors had to take in order to remain in important halls. They even had an auction process pitting companies against each other to see who would bid the most for important spots.

And this adversarial relationship resulted in increased pressure in the relationship between the largest US trade show and its partners/exhibitors. As soon as a few big names pulled out, the show more or less imploded.

But poof, just like that it was over. And too bad… I personally had a great relationship with Bill Sell on the management team and as in the nineties when I got my start in publishing, COMDEX was good enough to work with TMC and include us at the event.

Want to know how important the show was? One year a company from Asia came to us and offered us I believe $7,000 in cash to be able to have a table in our booth.

And now that Microsoft has announced it is pulling out of CES, some are wondering if the same thing will happen to this show. The answer is that the show organizers will now be under a lot of pressure from other major sponsors to get more for their dollar. Items requested will likely be more speaking slots, low-priced sponsorships and other sweeteners to keep one major vendor defection from turning into 3, 5, 7, 15, 50.

Yes it is true that the momentum of CES is tough to kill but the big names are a major reason many attendees go to this show and if they are gone then there will be an associated traffic decrease which will mean the remaining players may take smaller booths which will translate into the sense the show is losing traction.

What probably happened in my opinion is CES was under pressure to give less exposure to Microsoft from some of the other players who were vying for the same sponsorships, speaking slots, etc. Microsoft most likely didn’t take too kindly to not being treated as if they were the most important player at the show – they spend a fortune there and the relationship headed south.

Apple pulled out of Macworld the story goes it did so in order for it to have more control over its destiny and Microsoft is making a similar argument. The difference is of course that Apple had retail stores which allowed it to have direct connections with its customers. Microsoft can use virtual communications such as social networks to approximate the same end-user relationship but it isn’t the same.

From my perspective however with the advent of IT becoming consumerized, now is not a good time to leave the Consumer Electronics show. Moreover, with Apple rumored to have a new TV next year which approximates much of what the Xbox Kinect does today, do you want to have a void at this event where most of the media and forward-looking tech enthusiasts will and want to be?

Microsoft for its part can always reverse course – we’ll have to see if they begin to miss CES or if the CE Association makes them an offer (including an apology) they can’t refuse.

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