Microsoft admits Vista failure
Actions speak louder than PR
By: Charlie Demerjian in Beijing
<javascript:__doPostBack('_ctl0$lnkEmailForm','')> 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
<http://news.com.com/Dell+brings+back+XP+on+home+systems/2100-1046_3-6177619.html>.
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 behaviour, 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 XP
<http://news.com.com/Microsoft+aims+to+reach+next+billion+PC+users/2100-1003_3-6177431.html>.
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
<http://news.com.com/Acer+Vista+is+an+excuse+for+Microsoft+price+increases/2100-1016_3-6130136.html>?
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 <http://www.theinquirer.net/default.aspx?article=13350>. 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. ยต
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