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Archive for March, 2007


The Fear-Factor Revisited: Time for a Microsoft Death Watch?

Friday, March 30th, 2007

I suppose a company’s life-cycle might resemble that of a living creature. Some die rapidly, often without achieving success. Others attain the pinnacle of success, grab the brass ring and discover the end of the rainbow. A precious few, such as Microsoft, come to dominate their industry. You can almost think of them as invulnerable, yet it seems that only oil companies maintain that status for terribly long.

Consider the 1980s, when IBM was king of the PC universe. Today the market leaders are Dell and HP, whereas IBM’s PC business was sold off to Lenovo, a company based in China. If you went back in time roughly two decades and told anyone how the PC business would look today — and don’t forget about Apple using Intel chips for the Mac — you’d get laughed at or put away in a little room with extremely soft walls.

It wasn’t so long ago that any suggestion that Microsoft was losing its mojo would garner loud laughter, and that’s quite understandable. And certainly with sales of 20 million copies of Vista, the mere suggestion that Microsoft might be in its death throes may strike you as absurd. Besides, the company is hugely profitable, stockholders are happy and 95% of the world’s personal computers still run some version of Windows.

But it’s the little things that count, and I’ve been covering a few of those things in recent months. Moreover, I’m not alone in this suggestion. More and more people are talking tough about Microsoft, and you do hear suggestions that its executives might just be a little out of touch with reality.

Take the statement from Bill Gates that Macs are suffering from as much malware as Windows. What planet is he living on, and where did he get that silly idea? Before you go look for the first Mac OS X virus to spread into the wild, let me tell you that it’s not worth the bother. You see, Microsoft’s spin-meisters would probably claim that Gates was just pointing to the various Apple updates that fix security leaks, and not speaking about genuine exploits. Maybe his comments were, well, misinterpreted.

Then you have the incessant rants of Steve Ballmer that everything the company does is spectacularly innovative and will change the computing world forever — for the better of course.

But it’s not the irrational remarks of its executives that should be cause for concern. They have the right to feel optimistic about their products and they are expected to evangelize Microsoft’s vision.

However, you begin to wonder whether or not there are a few signs of a long-term erosion in Microsoft’s dominance. Indeed, Mac market share, after years of stagnation, seems to be on the rise, particularly when it comes to notebooks, which is the real growth category in the PC business. But that’s certainly not all.

Why are more Macs being sold? Well, one key reason is that more and more Windows users are disgusted with that platform’s instabilities and vulnerability to malware. Virus protection software often has to be updated on a daily basis to keep current. By the time you add software to protect your PC from spyware and various and sundry ills of the Internet, it takes its toll. Your PC may even run noticeably slower under the load of all that security software.

More and more tech writers who formerly touted Windows as the ultimate PC solution talk of their great experiences switching over to Macs. Some just do it as an experiment for a story, perhaps, or just to see why Mac users are so passionate about their computers. But more and more of these experiments are life-changing experiences. They embrace the Mac, and urge others to do so as well.

No, it’s not just a set of goofy ads that made this happen. But I suppose that the fact that millions of Windows users have adopted the iPod as their music players of choice might be a factor.

And just look at all the awesome gadgets that Apple has introduced of late, such as the Apple TV, and let’s not forget the iPhone. Even the Chairman of the FCC reportedly spent time admiring one. Imagine that!

In contrast, Microsoft begat the Zune music player, such as it was, and Windows Vista, which seems almost an afterthought after six years of hype.

Office 2007? Well, you don’t hear so much about that anymore.

Now there ought to be a little reality check: I happen to like Microsoft’s Mac products, including Word, Entourage, their wireless keyboard and mouse outfit and, more importantly, the people I know who work there. So let’s not take this long critique personally.

At the same time, of course, there is the worldwide attention that’s focused on every little thing Apple does. iTunes has a “Complete My Album” feature, which allows you to upgrade from singles to the full album within six months for the difference in price. The new feature made worldwide headlines, although you wonder if they are simply paying heed to music industry concerns that albums aren’t so popular anymore.

On the other hand, there’s that nagging feeling that, even if it takes a decade or two, Microsoft is on the long road downward, but to where, nobody really knows. Except for those time travelers of course.

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The Fear-Factor: Yes, Microsoft Has Lost its Clout!

Thursday, March 29th, 2007

Once upon a time, the name Microsoft invoked feelings of abject fear from most of its competitors. And no wonder. The world’s largest software company was notorious for entering PC-related markets and squeezing out competitors. Its victories over the Mac and Netscape are legendary.

However, as Apple continues to dominate the headlines, not just in the tech pages of your daily newspaper, but just about everywhere, it seems that Microsoft doesn’t quite seem so tough anymore. For example, when the Zune music player arrived last year, fanboy fawning over the product was surprisingly low-key. Except for a few apparently subsidized sites early on, the product’s buzz quickly fizzed out.

These days, you hardly hear much about the Zune music player, which you have to regard as an abject failure. Even Microsoft’s own promotional efforts to yield memorable results, as if they knew it was a misguided venture.

In fact, it seems as if more and more people are inclined to stand up to the Redmond giant. Take Dell, now struggling to reverse falling sales, which is reportedly mulling over the idea of offering desktops with Linux preloaded. According to an online statement: “We will expand our Linux support beyond our existing servers and Precision workstation line. Our first step in this effort is offering Linux pre-installed on select desktop and notebook systems.”

It’s not likely that Dell is going to say anything publicly about whether they’ll still have to pay the Windows “OEM tax” exacted by Microsoft for each PC sold. Maybe it doesn’t matter, because the PCs involved are higher-end products and Dell can afford to assume the loss.

So how are Steve Ballmer and Bill Gates reacting to the news that one of their largest customers is openly defying the Windows hegemony? No doubt they are seething inside, but they would also face consequences from the Department of Justice if they tried to object too strenuously, although I wouldn’t doubt they are expressing their displeasure privately to Dell executives.

Then there’s the announcement that HP is ditching its line of Media Center PCs.

The more important thing is that all this is just the latest evidence that Microsoft is becoming more and more of a paper tiger. Now it doesn’t mean they don’t have any influence. No company that large can be remotely considered to be powerless, but how things have changed!

Yes, Microsoft boasts that they’ve sold 20 million copies of Windows Vista, but the vast majority of those copies are simply loaded onto new PCs. As with those inflated Xbox sales claims, these figures presumably include the number of units shipped, rather than how many actually reached the hands of customers.

You could, of course, point out that this is more than the number of copies sold of Windows XP in 2001 over the same period of time, but fewer PCs were sold then, so that compensates. However, I have to wonder how many Windows users are begging for a downgrade to Windows XP? More to the point, would the manufacturer still have to pay for Windows Vista and thus count that as a sale for the new operating system? Ah, contracts, contracts. You never know just what’s going on behind the scenes.

At the same time, Apple is poised to gain a huge amount of traction under these circumstances. Everything it’s doing appears to be coming up roses. Just the other day, AT&T announced that they’ve had a million requests from customers who want to know when the iPhone first becomes available. After a short delay in shipping the Apple TV, it has been reported that sales could amount to a million or a million-and-a-half units this year alone.

Inasmuch as both the iPhone and the Apple TV use an embedded version of Mac OS X, I suppose you could count them as potential sales for that operating system. No matter. It just shows how well Apple has managed to leverage its crown jewels and bundle it seamlessly into additional products. I don’t think that Microsoft has done near as well with Windows CE. Do you?

And as more and more tech journalists — even the ones who supposedly tout Windows as the appropriate solution — suggest that the Mac ought to be considered as a viable alternative — it’s clear the climate has changed big time.

I can’t wait to see how it all plays out.

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