Microsoft and Vista: a Retrospective

I posted on Microsoft and Vista way back in December 2006 and February of this year. My analysis of the Internet dialogue was very, very negative, painting an early picture of fear and desperation on the part of my friends in Redmond. Further, I identified a series of development and PR gaffes that didn't portend well for a blowout across corporate IT departments or consumer channels. This was then:

From Microsoft vs. Apple: Is Vista the Answer in the Era of Consumer Computing?, 12/12/2006

You pretty much know my view of Microsoft - a big, great, bureaucratic, confused company that has lost its way. I'd like to augment this view with some fresh data concerning Vista, how Microsoft is positioned relative to Apple, and how we have ushered in a new era - the Consumer Era of Computing - for which Microsoft is ill-prepared. And my connect-the-dots analysis leads to painful and stark conclusion: Microsoft, for all its financial resources, intellectual capital and historic success, is at risk of being marginalized in tomorrow's world. The terms of trade have changed, and thus far they have seemed to lack the currency necessary to play. With all the brains and money at their disposal the chance of a turn-around certainly cannot be discounted, but it is the embedded cultural and market perception issues that give me the most pause.

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With the Internet, cheap storage and massive processing power, the playing field has flattened measurably. One doesn't need thousands of developers, hundreds of man-years and tens of millions of dollars in "big iron" to develop applications people want. People want to connect. People want to be able to share. People want to discover. Pictures, movies, music, email, web pages, files, spreadsheets, and more. This means that people want programs and applications that are easy to use. And fun. And open. People and companies became dependent upon Microsoft because the lack of computing power and bandwidth called for a high degree of desktop integration. However, this isn't the case any more. Big, heavy OS and related applications simply aren't necessary. Google threatens Microsoft in search and email. Apple is chipping away with consumers. And these are only two of many companies that are relentlessly challenging the Microsoft franchise. Further, I think what Apple is doing is actually pretty profound.

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Microsoft has to decide what it wants to be. "Bet the ranch" projects like Vista are not the future. While the Company can say it beta tested Vista to death, if it takes 5 years, billions of dollars and millions of man-hours to kick out a commercial product you've got a problem. What top young pro wants to be part of that? The problem is deeper than business model and who your customer really is (though these are, without question, two of the most critical issues to Microsoft's future), but how you attract, retain, excite, challenge and incentivize the best people. Without this, the battle is lost. And right now, Microsoft needs to focus on those dimensions if it wants to maintain its role in shaping the technology of tomorrow. Because we have firmly entered the Era of Consumer Computing, an era with which Microsoft has little experience and even less success. And based upon what I am hearing from the corners of the Internet, they've got a seriously uphill battle.

From Microsoft Revisited: Vista, Apple and the Sony/Nintendo Phenomenon, 2/05/2007

Microsoft on stage. Bill on The Daily Show. It's Vista time, baby. Survey says - thud. It is a hard thing to watch. A cranky, defensive and inarticulate Bill. Trends in the data that have to be massively disconcerting to Microsoft management (not to mention its external shareholders). Dripping, gloppy Apple envy coming from the top. Incredulity at the public's lack of understanding of Vista's greatness. These are not signs of a company, of a culture, of a management team doing well. They are failing. Failing to understand their customers. Failing to understand the tone of the market. Failing to understand the kind of messaging that is necessary to get people excited about their products. And yes, failing to transition into the Consumer Era of Computing, a phenomenon I had written about in a post about six weeks ago.

And I've got to say that this latest leg in the Microsoft/Apple battle bears stunning similarity to the duel (although it is hard to have a duel when one of the participants is already dead) between Sony and Nintendo in the PS3/Wii war, while a story that still needs to be fully played out looks increasingly like the nimble, adaptive, consumer-focused company kicking the crap out of the Grand Dame of Gaming. And I am sure over the ensuing months and years we will see more of this stuff happening, where the more consumer-centric, lighter, friendlier applications will dominate the legacy titans of yesteryear. It is all just beginning, and the first and highest profile casulty may well be Sony, closely followed by Microsoft. Anyway...

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We may be witnessing an historic changing of the guard, which takes place in every generation. Remember IBM? They were invincible. How could they be beat? By a couple of geeks in a dorm room, that's how. Microsoft rises. And then another snot-nosed kid with a great idea and a dorm room made it happen in the box business, enter Dell. Then others got wise and squeezed their efficiency-based margins to nothing. Apple rose like a phoenix, crashed and rose once again, by virtue of innovation and a customer-centric ethos. Sony was like IBM. Now they've been bloodied by the customer-centric and community-oriented Nintendo. And now there's Google, the poster-child for the democratization of the Internet and the ever-flattening, increasingly frictionless world. When put in this context Microsoft just seems so big and slow and old, hidebound by 30 years of culture and organizational silos that seem impregnable. And it appears that Vista - the product, the PR, the marketing approach - is the result of such an organization. At times brilliant, very heavy, complicated and expensive. This is not a product for today. This is a product for an era when the desktop ruled. And that era is long gone.   

And this is now:

From CNet News.com 9/26/2007: Why Microsoft must abandon Vista to save itself

While Vista was originally touted by Microsoft as the operating system savior we've all been waiting for, it has turned out to be one of the biggest blunders in technology. With a host of issues that are inexcusable and features that are taken from the Mac OS X and Linux playbook, Microsoft has once again lost sight of what we really want.

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The first indication that Microsoft should abandon Vista is its poor sales figures. According to a recent report titled "Windows Vista Still Underperforming in U.S. Retail" from NPD, Vista sales are significantly behind XP sales during its early days. Even worse for Redmond,  some are reverting to XP, citing issues with compatibility and overall design. And if that wasn't enough, Macs continue to surge and with the impending release of Leopard, Microsoft may be in for a rough holiday season.

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Never before have I seen such an abysmal start to an operating system release. For almost a year, people have been adopting Vista and becoming incensed by how poorly it operates. Not only does it cost too much, it requires more to run than XP, there is still poor driver support, and that draconian licensing scheme is a by-product of Microsoft picking on the wrong people.

The road ahead looks dangerous for Vista and Microsoft must realize that. With Mac OS X hot on its tail, Vista is simply not capable of competing at an OS level with some of the best software around. If Microsoft continues down this path, it will be Vista that will bring the software giant to its knees--not Bill Gates' departure.

Of course, categorically dumping an operating system is quite difficult and with millions already using the OS, chances are Microsoft won't find a good enough reason to do it. And while I can understand that argument, there's no reason the company can't continue to support Vista and go back to the drawing board for its next OS. Even better, go back to XP--it's not nearly as bad as Vista.

Hey now, that's kind of rough talk, eh? Well, if you think this piece is bad, you should check out the chat on Slashdot in the wake of the CNet piece. Let's just say that Steve B. would have steam coming out of his ears after scrolling through some of those comments. I find it interesting that a lot of the issues I had raised early in the game between Vista and the Mac OS X have come to fruition. This simply shows the power of the Internet as a leading indicator of the Vista debacle, and the follow-through in the offline world is nothing short of remarkable. But wait, there's more...

From Macnn 9/28/2007: MS to sell XP until June 2008 after Vista backlash

Microsoft will continue to sell both retail and OEM (pre-installed) copies of Windows XP for five months more than originally planned, the company announced today. Although plans would originally have dropped both versions from stores by January 2008, the new extension will remove the OS only by June 30th of that year -- nearly a year and a half after Windows Vista's January 2007 debut.

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The software developer has encountered an unprecedented level of resistance to its Windows upgrade since its release early this year, with large-scale computer builders such as Dell restoring an XP option either due to a lack of stable hardware drivers or customer complaints relating to software compatibility and performance. Microsoft recently began offering an XP downgrade licensing option for system builders who wanted to let customers fall back to the earlier OS for systems that would normally ship with Vista. For its part, Microsoft maintained that Vista was the fastest-selling version of Windows to date and noted that far more people were choosing to upgrade through buying a new PC rather than a stand-alone copy. The firm did not say whether the shift was just evidence of stronger growth in system sales or a decline in sales of upgrade copies.

Well, CNet hit the nail on the head. XP is being kept out there longer because... drum roll please... VISTA SUCKS. The trade-off of features to brain damage just isn't worth it. Credit Microsoft for using their brain on this one, though they would have to have been completely brain-dead to have arrived at a different conclusion. It's just sad, mostly. But at the end of the day Mr. Market rules, and the market has spoken loud and clear on the issue of Vista: too expensive, too heavy, not worth it, even after more than $500 million of ad spending and one of the biggest hype campaigns known to man.

The same cultural issues that I raised over nine months ago are still present today, with unclear prospects for resolution. It is difficult turning around a supertanker, especially one tethered to the bottom of the ocean. The real question is what will be the catalyst for setting it free - if it is even possible. Maybe we are witnessing the transformation of Microsoft into an oil well - once a gusher, today a valuable annuity, but a depreciating asset nonetheless. The growth stock luster has long been tarnished, and Vista is only a manifestation of a larger problem: the increasing rigidity and bureaucracy of a once-great entrepreneurial titan. Google, take heed. No firm is above the inexorable pressures of success and scale.

Comments

[jreid]

The main challenge for Microsoft is that they are developing their products for their customers, who are the managers signing the purchase orders, not the users and developers who have to deal with the minutae.

The success of the free unixes is a result of the incredibly short feedback loop between user and developer - who are often the same people. The productivity of a unix user with sufficient privileges to add packages and run programs is significantly higher than the user who has to put in a change request with IT to get anything done. MacOSX dealt with this by allowing users to re-authenticate as administrators without closing down all of their programs. While the link between sophistication and productivity may be vague, MS products are designed to support the "enterprise" bureaucracies they sell to, and not to equip individuals with powerful tools, on-demand to succeed.