30 November 2006

Microsoft's Vista will be a humongous success

You may not have expected the title to come from me, but really I wanted to state the obvious.

According to the FT, there are 8 times the number of PC's in use compared to when Windows95 was released (800 million vs 100 million). Furthermore, it has been a full 5 years since the release of Windows XP. That has to provide a pent-up demand itself. Previously, Microsoft had updates every few years, so many Windows 2000 users didn't upgrade to XP for instance, even if Windows 98 users did.

So, there is little doubt that Vista will break all records that Microsoft chooses to use to publicise its success, and we will see plenty of such mentions over the next year. And anyone fighting such statistics is basically delusional. (The only question will be whether it is "phenomenally, fantastically successful", or just "successful"; and that will depend on personal interpretation).

But Vista's release is important in many, many ways beyond just number of installations, including:
- It lets Microsoft plant a stake in the ground saying we DO understand security and we've SOLVED it - calm down. You can trust us, after all.
- In the past, you had to have strong reasons NOT to go Microsoft - you were shutting yourself from all sorts of compatibility and functionality. Nowadays, the proliferation of devices including mobiles, laptops, media extenders, and general consumer electronics, blurs the boundaries of the past. The internet and the general "connectedness" of everything means that the average user no longer HAS to go Microsoft. They increasingly have a choice again. Whether Vista is on 80%, 90% or 98% of PC's may not matter when there are many more devices than just PC's.
- It is the basis for Microsoft's one shot at dominating the living room. More than any other company, Microsoft's home strategy needs people to welcome Vista AND to actually use it the way it was intended.

Vista is MS's best shot (and a compromised, late one at that) at keeping and extending it's virtual monopoly on devices that are primarily computers. But Vista enters the market at a different time than XP. A time when a new set of competitors and new technologies have emerged. A time when we use many devices that each have a processor inside running an OS of sorts and providing various bits of functionality. A time when the OS itself no longer provides the true differentiation or, particularly of concern for Microsoft, the lock-in.

In time, Vista will be considered as the last great hurrah of the proprietary OS. There will never be a software release as significant to so many people and businesses. Even Microsoft, by all accounts, never wants something so big again. Reading some recent blog posts about how it took a team of 24 people plus managers (for a total of 43) to decide and code the Shutdown/Sleep functionality, is evidence enough that such an approach is unsustainable.

From here onwards, Microsoft's financial success will be based around how it milks it's huge (and still-growing) installed base, how it maintains the massive intertia and slows the switch away from it's dominant software, and whether it can truly make profitable it's newer initiatives. (My own views are that on 1 and 2 it will do well, and on the 3rd will continue to disappoint).

The next key battleground is in the Office software space. With Office 2007 released simultaneously with Vista, this is symbolic. Until now, anyone who wanted to co-exist in the business space would have been forced to use Microsoft Office. I know that without Office for Mac, I would not have been able to hold out on the Mac platform. The key to this was not unparalleled functionality but closed file formats. If you could not receive a Word document, edit it and send it back to be read without issue by the sender, you would be considered IT-defective. While OpenOffice has made some inroads here, and allowed Linux users some ability to co-exist, it has not been a good enough substitute for many business users for many reasons. With the Office file formats now becoming open, this barrier will now be significantly reduced - a key reason why Microsoft resisted it for so long. Between Google, OpenOffice and other similar initiatives, if the monopoly that is MS Office is broken, then that is the last key blockage towards true interoperability and collaboration across hardware and software platforms (Microsoft came close to establishing both IE and also Media Player as similar monopolies, but has probably failed to do so).

Microsoft has proven itself ruthless and astute at building monopolies and virtual monopolies, and maintaining those in the face of new competition. It has done this on the back of two dominant franchises - DOS/Windows and Office. Both were more than just compelling products - they caused problems to users who did not assimilate. That is not a way to win long-term friends and supporters. But there has been no major new technology from Microsoft that is truly outstanding and field-leading since at least XP, and possibly before that. The parallels are greatest perhaps with IBM - that indisputable champion of the late 70's and early 80's, but that remains a strong, profitable and influential company today. That is Microsoft's fate. It's timing will depend as much on it's competitors failings (e.g Sony's failure with PS3 giving XBox360 a window), as it's own management of that decline. It will no doubt have many successes in the future, but hopefully nothing that is so dominant and that results in such mediocrity from itself and the rest of the IT world hangers-on or leads to grudging acceptance from the worldwide PC userbase at large because they have no alternative.

For me personally, I expect I will buy a copy of Vista eventually to run on a Mac under Bootcamp or Parallels for the same reasons that I had an on-off relationship with VirtualPC at times. I also expect to buy Office 2008 for the Mac. But I truly expect and hope that these will be the last pieces of Microsoft software that I ever HAVE to buy.

History may well look back and see IBM as THE hardware monopoly and Microsoft as THE software monopoly. Let's hope that history doesn't write about a services monopoly, as there's only one name in the frame for that at this time.

Welcome, Vista, may the best man win (but not win big enough to be another monopoly).

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