DarkJedi’s Blog

Microsoft : The Fall From Grace

In a time where their biggest product launch in many years has just happened Microsoft is suppose to be quite on top of things. However, things are not well at Microsoft even though their major cash cows: Windows and Office has just been launched in new versions. The newest version of Windows – Vista – is looking like a failure of graet proportions on more than one front for Microsoft. The hype surrounding the launch of Vista is now being questioned every day, like the great hype surrounding Microsoft’s real support intentions on “Games for Windows”. The problems surrounding the “Windows Vista Capable” stickers also ended up being an embarrassing affair for Microsoft, when customers discover that they had been caught between hype and a lie. With Vista Microsoft’s marketing department outdone both themselves and the truth resulting in great marketing deception the real discussion quickly ended up in one question: Was the sales of Vista really good or bad?

When such a question is asked the marketing department quickly readies their hype machine and sets a spin on every sales number they can find. Nobody wants the investors to see the true signs of a weakened Microsoft with reduced earnings in sight. Unfortunately for Microsoft they are the only one knowing about the true sales numbers of Vista. The hardware vendors have already been complaining about the poor sales of Vista, while Microsoft continues to deny everything. Hauppage points to poor sales of Vista, as well. The sales of Vista in China cannot even be categorized as poor, but catastrophic – especially since this is a market Microsoft is betting heavily on! The demand for Vista is waining and has made Dell allow customers to keep ordering Windows XP for their new computers, but Microsoft isn’t about to let this continue – They need to show good Vista sales numbers and they are having real problems doing so!

While Microsoft newest product, Vista, is having take-off troubles, another problem is creeping in everywhere on their domain – Linux… The open source solutions and especially Linux has been slowly gathering steam while Microsoft was busy building Vista. When Vista failed to impress they are leaving themselves vulnerable for a serious amount of time. A new operating system cannot be built overnight and Vista simply doesn’t offer the customers any real new value, compared to Windows XP and Linux. Microsoft has been forced to accept that some of their largest customers are going a way Microsoft has been fearing for some time. Dell has just announced that they will be selling computers with the Ubuntu distribution of Linux pre-installed and has done so with a massive hype surrounding the event. This of course sends repercussions throughout the market and especially on the server side is competition hard for Microsoft with HP, IBM and Dell now offering extremely popular server solution with Linux. Ubuntu, in its newest version, is showing major class and potential and has quickly become a respected alternative to Windows in many areas. Ubuntu is often more easy to maintain, especially with the built-in software package system and high stability.

Open source has always been a major obstacle for Microsoft. In some areas Microsoft uses and embraces the values of open source and in others their fears of the competition leads Microsoft to hate it. This dual feeling is based upon Microsoft being a huge company and different departments act differently. Over the years Microsoft has become more and more frustrated with open source, which has been quite clear in the memos released in the antitrust cases against Microsoft, where Bill Gates thought about using their status as a monopoly to make it impossible for Linux to implement ACPI or to go after free office suites by dragging them through hard patent cases and court after court. Meanwhile, however, Microsoft doesn’t mind urging an anti-trust case against Google, when they become a competitor that doesn’t bend to Microsoft’s will. The problem with Google for Microsoft is that they keep on doing well, no matter what Microsoft attempts. Microsoft on the other hand continues to do poorly in this market and thereby giving Google an indirect boost by showing investors that Google can indeed outdo Microsoft – even though Microsoft is doing all they can to use their monopoly to push their technology out to everyone. In terms of Google another problem is staring Microsoft in the face every day: Google is using a lot of open source and continues to boost the open source movement…

The competition is starting to gather around Linux and while Vista is still suffering from basic errors you would never expect in such a high profile product, like simple file handling and copying problems, and are causing great problems for upgraders. While Microsoft might already be heading for a Vista discounting it has become clear that the Vista sales has been hyped by Microsoft and they are keeping very quiet about Office sales, as well. Total silence from a marketing department is never a good sign for a company… As Windows XP seems to be the operating system of choice currently it will be an important challenge for Microsoft if they choose to focus too much on Vista. Paul Thurrott has already claimed that Microsoft has absolutely no plans of releasing Service Pack 3 for Windows XP, as they want people to buy Vista, but this might be the final drop that makes the Linux the new operating system of choice for many businesses. Businesses wants support, stability and systems that do not require them to keep spending millions upon millions on new hardware. Windows XP provides this currently, Linux provides this… Vista, however, does not! For private users the main problem with Vista, apart from the many driver issues and annoying security implementations, is the many DRM schemes filling up the CPU cycles in Vista. Microsoft has always been a main force behind DRM and they have chosen to fill their newest operating system with it, so that they can use that control to sell new DRM schemes to content-providers. The customers did not ask for DRM and it can be a tough task for the marketing department to put a positive spin on the fact that users have lost a lot of control over their own computer.

As Linux continues to get more and more support Microsoft is left behind, not knowing how to handle this competition. The only answer Microsoft has come up with is to true and intimidate Linux and their supporters by claiming that Linux, the kernel, its user interfaces and programs like OpenOffice.org in total is violating 235 patents of Microsofts. However, going with this strategy is dangerous for Microsoft and shows that Microsoft indeed has become desperate. By distributing Novell’s SuSe Linux distribution Microsoft might end up being caught in the GNU Public License Version 3, a move that can end up ensuring Linux from Microsoft in the long run. There is much as stake in this war, which might be the beginning of the end for software patents. There is a good reason Microsoft won’t go public and announce the patents they think have been violated. If they end up in court over this Microsoft might very well end up loosing all together because the patent claims can be invalidated and counter-suits that can end up proving that Windows and Office are in patent violation of open source patents could ensue. Loosing part of the major cash cows: Windows and Office that generate a profit of more than 1,5 million dollars a day is a big risk to take. Furthermore this rattling the patent saber against Fortune companies can end up hurting Microsoft’s own Windows and Office businesses as many of the companies that use Linux also use and sell Windows and Office. Big customers like HP and IBM won’t like that their partner Microsoft is going after their lucrative Linux businesses and might retaliate.

Why has Microsoft then suddenly chosen to go the way of the patent troll? The answer is obvious… Microsoft has reached a stage where they can see the signs clearly and are becoming desperate. They are following the footpaths of RIAA and SCO before them: When you can no longer innovate sue your customers into submission! … Microsoft must really be desperate because just by announcing this unproven claim they have lost a lot of credibility. Not long ago Microsoft claimed to be wanting to integrate Linux into their ecosystem to give benefits to the customers, who had long asked for this. Instead they make a turn in a blink of an eye and comes out with, until proven otherwise, empty threats that might hurt their customers. The Open Source community has apparently done what Microsoft could not – innovate… They have seen that a new business model is gaining momentum: free software, where you pay for service and support… Microsoft, however, still clings to the old way and are not capable of innovating any longer! When you look at Microsoft attempts at patenting it becomes clear that their patents show no innovation and too many of their patents are simply rejected!

Meanwhile Microsoft continues to struggle with Vista. It is now clear that the Windows code was never made maintainable and therefore Microsoft and their customers are still struggling with massive security problems – even on the server side!

All the signs added up leaves a picture of a Microsoft walking wounded, and the recent events at Dell is the clearest sign of this. Naturally Microsoft will be quick to retaliate on Dell for their lack of loyalty, but the change has already been set into motion… Microsoft is being battled on many fronts, not only on Vista and with Linux, but also on their Office suite, where ODF is trying to release Microsoft’s long control over people’s documents through its battle against OOXML. Already Norway and Belgium has declared that ODF will be the mandatory public document format, which is a major defeat for Microsoft. This is another slipping power for Microsoft. When people no longer need the Office suite they will be less bound to Windows as well. Faced suddenly with a choice of upgrading to an expensive and high demanding Vista, with tons of trouble, and paying for a new Office suite as well or choose ODF and have the choice of staying with Windows XP, going Linux, going OpenOffice.org, Going KOffice, going StarOffice …. all in all: Having a choice!

Microsoft is indeed walking wounded. They are starting to use desperate measures that might end up backfiring upon the wounded company. They are under attack from all sides and are themselves helping their competitors gather support by attacking and threatening their own customers. When the innovation no longer exists a company cannot stay at the top and drive the market, unless they keep absolute control of their monopoly. Now, however, people and governments have a choice and the can release themselves from the grip of Microsoft, which will be the first nail in a coffin that will take many years to seal – Microsoft’s fall from grace has begun…