Microsoft admits Vista failure. Actions speak louder than PR

Discussion in 'Wall St. News' started by Optionpro007, Apr 22, 2007.

  1. Wonder if any of the tech savvy members can comment on this article.



    Microsoft admits Vista failure

    Actions speak louder than PR

    By Charlie Demerjian in Beijing: Saturday 21 April 2007, 12:20

    WITH TWO OVERLAPPING events, Microsoft admitted what we have been saying all along, Vista, aka Windows Me Two (Me II), is a joke that no one wants.
    It did two unprecedented things this week that frankly stunned us.

    Dell announced that it would be offering XP again on home PCs. The second that Vista came out, Microsoft makes it very hard for you to sell anything other than Me II. It can't do this on the business side because it would be laughed out the door, but for the walking sheep class, well, you take what you are shovelled.

    This is classic abusive monopoly behavior, Microsoft wrote the modern book on it. It pulled all the major OEMs in by twisting their arms with the usual methods, and they again all fell into line. Never before has anyone backpedalled on this, to do so would earn you the wrath of Microsoft.

    But Dell just did. This means that Me II sales are at least as bad as we think, the software and driver situation is just as miserable, and Dell had no choice but to buck the trend. If anyone thinks this is an act of atonement for foisting such a steaming pile on us, think again, it doesn't care about the consumer.

    What happened is the OEMs revolted in the background and forced Microsoft's hand. This is a big neon sign above Me II saying 'FAILURE'. Blink blink blink. OK, Me II won't fail, Microsoft has OEMs whipped and threatened into a corner, it will sell, but you can almost hear the defectors marching toward Linux. This is a watershed.

    The other equally monumental Me II failure? Gates in China launching a $3 version of bundled Me II. Why is this not altruism? Well, it goes back to piracy and how it helped enforce the MS monopoly. If you can easily pirate Windows, Linux has no price advantage, they both cost zero.

    With Me II, Microsoft made it very hard to pirate. It is do-able, you can use the BIOS hack and probably a host of others, but the point is, it raised the bar enough so lots of people have to buy it. Want to bet that in a country with $100 average monthly salary, people aren't going to shell out $299 for Me II Broken Edition?

    What did MS do? It dropped the price about 100x or so. I can't say this is unprecedented, when it made Office 2003 hard to pirate it had to backpedal with the student edition for about $150. This time though, things are much more desperate.

    If you fit Microsoft's somewhat convoluted definition of poor, it still wants to lock you in, you might get rich enough to afford the full-priced stuff someday. It is at a dangerous crossroads, if its software bumps up the price of a computer by 100 per cent, people might look to alternatives.

    That means no Me II DRM infection lock in, no mass migration to the newer Office obfuscated and patented file formats, and worse yet, people might utter the W word. Yes, you guessed it, 'why'. People might ask why it is sticking with the MS lock in, and at that point, it is in deep trouble.

    So, it did the unthinkable, and dropped the price. I won't bother to hunt down all the exec quotes saying how people can't afford clean water would be overjoyed to sell kidneys to upgrade to the new version of Office, but they are out there. This was a sacred cow, and it is now hamburger backed up against the wall.

    These two actions by Microsoft are proof of what I suggested three years ago. Microsoft has lost its ability to twist arms, and now it is going to die. It can't compete on level ground, so is left with backpedalling and discounts of almost 100 times.

    What we are seeing is an unprecedented shift of power. It is also an unprecedented admission of failure. And the funniest part about the moves made? They are the wrong things to do. Microsoft is in deep trouble. µ
  2. shame..
  3. laputa


    just the usual MS tatics...

    They lift the old product and push for the new one even though there is no demand from the customers...

    Soon MS is going to retire win xp by not providing new hotfixes, and corporate customers will all be forced to upgrade... that's how they retired windows 2000
  4. ess1096


    Dell is mailing me XP for free after I complained that my Trading platform, among other things don't work with Vista. Their other choice was to take back the machine for a full refund.
  5. Microsoft is now in crisis.

    There is no doubt.
  6. Going to be a very interesting earnings report from them on Thursday.
  7. hels02


    Vista sux by all accounts, but I wouldn't say Microsoft is about to DIE because of it. XP took about 3 years for people to accept too, and there are still people using 2000, and even 98.

    I don't have it yet, but Office 2007 is supposed to be nice.

    The most interesting thing to me is the Zune. With no fanfare, it seems kids prefer it to iPods, at least around here. And by common agreement, it's the better system than iPod (I don't know crap about either, but my kids are Zune crazy, and are convincing their friends to buy them instead of iPods, or in most cases, in addition to iPods). This doesn't mean much, we should all remember Betamax's. But if Zune is as good as the kids think, it may gain market share. That's a pretty big market too, since it's Apple's claim to fame.

    I think the biggest question for Microsoft is how will it will continue to do with Bill Gates retired. But given the size of Microsoft now, it's fast growth days are probably behind it.
  8. Yeah, their operating system's penetration sucks and they have almost 0 cash.


    Seriously though, I think the comment about their huge growth days being behind them is the relevant one. It remains to be seen how they convert their incredible legacy and adapt going forward. I'm not a Windows fan, but the threat of Linux has been around for a while, but hasn't really materialized yet, has it? We need the opinion of a corporate IT guy here.
  9. I'm sticking with my XP until a real improvement of an operating system comes along. I see no reason to upgrade right now, every piece of software I currently use runs fine with XP.
  10. andread


    #10     Apr 22, 2007