In Microsoft’s latest quarterly revenue and earnings report a lot can be read between the lines that you wouldn’t have expected a couple of years back. In a year when a new Windows version and Office version have been released one would expect Microsoft to do extremely well. Even though the report says that Microsoft is doing all right there are a lot of small hints that Microsoft has a wave of problems and they are starting to loose their battles. The report goes in and states a lot of who Microsoft are considering their enemies at present, which is always interesting as this often indicates which areas of Microsoft’s businesses are in problems or even dire straits. In this blog article I will go into a couple of the battles that has left Microsoft scarred and perhaps scared of acting up. One thing that is obviously wrong is the earnings on Vista…. This new version of Windows, which is more expensive than former versions seems to be in a lot of trouble – especially compared to how Steve “Throwing Chairs” Ballmer promised the world and Microsoft’s partners the sales would go, so let’s start out with a closer look at how Vista is doing…

Vista

Since the launch of its latest Windows version, Windows Vista, Microsoft has been heading into battle after battle on all fronts, defending its heavy cashflow fiercely. Lately, however, the majority of those battles seems to be losses to Microsoft. One of the biggest lost battles is the battle on Vista, where Microsoft is now facing a class-action suit for its “Vista Capable” sticker campaign. While Vista is proving a difficult product to sell Microsoft is faced with increased competition from Linux, where many computer sellers are now offering Linux as an alternative to Windows, like Acer, HP and Dell. Many analysts say that the poor Vista product is actually helping Linux into the Desktop Market. Looking at Vista it is apparent that not much has changed since XP, but the strain on resources and the lack of stable drivers makes one wonder they took 5 years to make it! Many loyal customers have tried to go with Vista and felt the pain, and after a while simply had to turn back to XP – one lousy experience richer! Windows XP is still by far the most popular choice among customers, no matter what Microsoft may claim! Naturally Microsoft isn’t about to let Linux take their slice of the pie, so instead of their ridiculously flawed and FUD’ed “Get The Facts” campaign, which tried to lie to potential customers about Linux compared to Windows Microsoft have now instead launched another FUD campaign against Linux, called “Compare”, which is more or less the same bullshit… The seriously need to wake up their marketing department and learn them some facts about the difference between glamorizing a product and outright lying!

One of the main selling points Microsoft made on Vista was its “improved” security, which has proven to be less than that of Windows XP in many areas, like patching and driver signing. All in all Microsoft’s claims on security with Vista has shown to be bullshit every word of it… And then in a equally poor attempt by Microsoft to try and make Vista look like a good product they instead launch a campaign where they try to tell how lousy a product Windows XP is – ragging down the most popular product at the moment… *sighs*

The selling point for Vista for Gamers is the new DirectX10, which is suppose to revolutionize graphics once again. Looking at the first DirectX10 games though you wouldn’t notice the difference – apart from the fact that it plays slower on Vista if the game has a DirectX9-version. When asked why Microsoft didn’t make DirectX10 for Windows XP they said that it wasn’t structurally possible with XP and people then had to buy Vista instead. Well, lies again… There are no reason why DirectX10 wouldn’t work fine in XP, as many has already shown. It is strange that Microsoft would try and lie to the public and their customers like that. Why aren’t they just coming out and tell the truth about Vista and the privacy problems Microsoft seems to have in every aspect? Why haven’t they explained why the network performance of Vista is decreasing rapidly every time you play audio files? Are they sending information about your listening habits without your consent? Do they think that such information gathering could help them get their crashed attempt at getting into the digital music distribution market back into the game?

Office and Privacy Concerns

With their main selling point shattered to bits Microsoft is left with sales so poor that they are now practically pleading customers to buy this their “greatest” product ever. While this is a big problem for Microsoft and especially their image a more serious problem is the derived effect that has come from their long development cycle with Vista, caused by its great delay. Now their most loyal customers are bailing on their Software Assurance program, as they simply doesn’t get enough products from Microsoft over time to make the program worth paying such high prices for. This is a big problem for Microsoft. With Vista slipping behind sales their other main source of income left is the Microsoft Office series. Microsoft is therefore trying to force users into buying the new version of Office only – even when many could easily settle for the 2003 version. OEM are simply forced to sell the newest version only! In the mean time Google Apps is launching a direct assault on the commercial non-power users of Microsoft Office, hitting after a crucial area in Microsoft’s earnings. Google is a difficult competitor to handle for Microsoft, who has been trying for a long time to win just any battle against Google, but fails every time. At the age of ten Google is now the heart of the Internet and considering Microsoft has always feared the Internet, this is bad news for Microsoft in many ways. Google’s advertisement is beating Microsoft hands down and now Microsoft is getting desperate and using the only tool they got left, selling out on their customers secrets and privacy. They are now planning to put adware and other malware directly into the Operating System – finally showing all their customers why they should install Linux instead… Customer’s privacy has never been the concern of Microsoft as another case has recently shown all to clear. Their largest privacy problem currently is the WGA, which is now being sued in China – a market Microsoft cannot afford to loose once again. The WGA program is becoming a major issue for Microsoft as of late, and also for customers as the program has shown to be extremely fragile – shutting people out of their own computer without reason… Naturally only the paying customers gets hurt by this, as the illegal versions has already gotten rid of the WGA program long ago! Of course their paying customers could just shift to Linux, like Ubuntu – they will still be able to validate as a Windows Geniune in this ridiculously poor nightmare of a program.

Office Open XML and Standards

Microsoft’s last minute attempt at preventing the Open Document Format (ODF) giving people a choice when it comes to documents, instead of the current vendor lock in, has failed miserably in every aspect and has really shown how vulnerable Microsoft is at the moment. Their Office “Open” XML headed through a series of troubles along the towards the ISO vote for standardization, even though Microsoft used every lowlife trick in the book concerning pushing and lobbying for their new “De Facto” standard that was supposed to keep people locked in to Microsoft as an Office vendor for many years to come. Naturally Microsoft in many aspects succeeded in persuading ignorant politicians, who were used to taking bribes, to publicly support OOXML, even though they hadn’t the slightest idea what that would mean or what a document format even was. The politicians would never understand the booby trap of patented threat waiting to happen with OOXML. While many anti-OOXML campaigns were fighting fiercely against Microsoft’s heavy artillery of wild promises and propaganda Microsoft still felt that they needed more leverage to push this last-minute “standard” through. They then tried to illegally buy or coerce their partners into voting for OOXML. Despite what mafia methods Microsoft had adapted it was painfully obvious that OOXML simply wasn’t really used in real life – as oppose to ODF – and the only thing that can be found out there is from Microsoft themselves. Before the ISO vote it was already apparent that a lot of countries were leaning towards a NO for OOXML as a standard. When the vote finally came in ISO and OOXML was rejected as a standard it was quickly obvious that OOXML had failed completely, but what was even more embarrassing for Microsoft, who had just paid tons and tons of money for the greatest pierce of lobbying in the history of the world, was went public after the vote… Microsoft had apparently bought a lot of smaller countries to go and vote for Microsoft’s OOXML in the ISO, in order to press their “standard” through. Their attempt didn’t succeed as the countries that buys the most of Microsoft’s software voted no, clearly stating that they didn’t want Microsoft to continue with their vendor lock in. Of course Microsoft isn’t used to loosing, especially loosing this big and obvious to world to see, so they simply proclaimed the NO-vote a victory… *sighs*

No matter how Microsoft tries to spin the reality through their marketing machine they lost – fair and square – even though they used every dirty trick in the book. Furthermore Microsoft has to be rather ashamed of itself, if they consider themselves a professional company, as their dirty tricks have now let to a large worldwide interest in getting less corruption in the ISO after what Microsoft tried to do.

Of course Microsoft will get a second chance this February when they have had a chance to redeem some of the points the critics made that could change some no-votes to yes-votes. Central to this enormous list of points is three things: Interoperability between OOXML and ODF, a better documentation, that allows everyone to implement the standard, not just Microsoft and that control of the format is not placed with Microsoft, but an independent group, that ensures interoperability in the long term.

It should be an interesting process to follow …

GPL3 and license problems

Among the most fundamental of problems is the nightmare Microsoft is experiencing with the coming of the newest version of GNU Public License version 3 (GPL3). Microsoft has for a long time tried to “convince” Linux distributors that they needed to corporate with Microsoft and that Linux might be misusing Microsoft patented technology. No one bought the tactic that Microsoft’s unproven saber rattling was suppose to enforce, but instead Microsoft suddenly found themselves in the opposite situation of what was predicted by the lawyers of Microsoft. Instead of scaring away Linux customers Microsoft made enemies among the Linux distributors, who in many cases were also big Microsoft resellers, like HP, Dell, Acer and others, who are now focusing even more on their Linux business instead. Microsoft then let Steve “Throwing Chairs” Ballmer go public saying that Microsoft’s most feared software competitors, Linux and OpenOffice.org, violated more than 200 patents of Microsoft. Once again the result of this action was devastating for Microsoft. Instead of fleeing from Linux the big companies supporting Linux, like Sun, IBM, Sony, Google and others came out threatening Microsoft that Windows might be in violation a lot more of their patents than puny 200 and that they would defend Linux by countersuing Microsoft and their Windows and Office products into Hell, should they decide to attempt to take Linux and OpenOffice.org into court. Microsoft was then called out by the community, who wanted to call Microsoft’s bluff, concerning which patents Linux and OpenOffice.org was in “violation” of and once again Microsoft got caught in their lie, as they couldn’t come up with any evidence to support their claim. Then came the twist that really must be hurting the legal department at Microsoft since they missed this in their grand analysis…

Microsoft’s first deal with a Linux distributor, Novell, suddenly came exploding back in Microsoft’s face, when it became apparent that Microsoft with its deal had become a Linux distributor, since they sold Novell’s SuSe Linux distribution on to their customers. Suddenly Microsoft is facing being put under the terms of GPL version 3 which means that they would have to forfeit the possibility of ever using any software patents against open source for all eternity. Microsoft, who already was at a loss as to how to compete against this threat that just kept getting more and more support and popularity in the business was suddenly faced with the complete loss of their “last desperate” method against open source, the courts and Microsoft’s army of lawyers. Naturally a situation like this, where Microsoft’s enormous legal department was caught with the pants down for completely missing this point before Eben Moglen mentioned it, took it through the normal marketing lies and spinoffs at Microsoft, coming out claiming like a dissilutioned emperor that “the GPL has any impact on Microsoft”. Naturally this would have worked better if they didn’t spoil their own bluff when they made the next deal with a Linux distributor, which was Linspire, where they suddenly made sure that the GPL v3 was excluded without any trace in their deal. The problem for Microsoft is of course that by doing this you are actually saying that the deal you made previously with Novell, where this isn’t excluded, means that the GPL is included implicitly. All this evading and spinning of the case clearly shows that Microsoft knows that they are in a load of legal trouble with the GPL v3 – how could their legal department miss that one?! … The most funny part of it all is what has happened lately, which is nothing – absolutely nothing. This is saying a lot as one has to remember that this spring was filled with announcement after announcement from Microsoft on this subject and now: Silence! For once they know that they screwed up – and they screwed up BIG TIME!

Strategies and the Future

What would happen if Microsoft adapted the slogan that Google is using “Do no evil”? It could be seen clearly in the case of OOXML, where Microsoft rushed a new standard out, only when they felt threatened, not because of foresightedness. It was an incomplete standard and it clearly showed that Microsoft is guided largely by a marketing and sales department, instead of customer wishes and long term strategies. Therefore it was natural for people to regard it as an attempt from Microsoft to keep their monopoly going, simply because of history. Microsoft did little to change this! They paid off voters, try buy the ISO and lobbyied like never seen before – instead of finishing the standard and going to heads with the problems of it, like interoperability and implementability.

This is Microsoft’s greatest problem… They have simply grown used to play on their monopoly and regard this as the only way they can compete these days. Instead of doing what Google is doing, which is listening to its customers and adapt a strategy that says that we want to win by making the best product and NOT by screwing our customers, or trading their privacy, or forcing them away from standards that give them choice. Microsoft needs to understand the concept of Software as a Service, where your customers are your primary focus and you supply them with the service they need to have in their software. Windows and Office have become cornerstones in Microsoft’s earnings, and instead of thinking about the future in the digital world, where the Internet is central and everything is based on standards and SOA and everyone in the industry is concerned with offering the service to the products as a way of earning money, Microsoft is trying to stall the world, like the did with Internet after their won battle with Netscape. They need to adapt a long term strategy and convince people that they are committed to their customers need, not only to their own income and keeping people vendor locked in. The only vendor who has an interest in Vendor lock in, after all, is the vendors who cannot compete on equal terms on the market. Microsoft has, with Windows and the last couple of years Office, had a strategic monopolistic situation, which is okay if do not take advantage of it. The problem is that is has become Microsoft’s main strategy to take advantage of this first and foremost, as a standard way of dealing with competition. It is a sad turn of events as a company with such an amount of programmers and smart heads, long history and experience should be able to thrust in their own abilities in the free market… One can only hope and see what the future brings, but I am pretty sure that it will continue to beat Microsoft harder and harder that they are not reconsidering their strategies and adapt customer satisfaction, privacy concerns and start competing on equal terms, instead of counting on FUD campaign after FUD campaign and letting their marketing department issue lie after lie… People are not stupid – and the second they get offered a real choice Microsoft will quickly find out just how fast a competing product can overtake the long-winning giant, who simply got lost along the way!