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  • Is Microsoft Finally Going Downhill?

    April 30th, 2005

    No, Microsoft haters, don’t begin that loud applause just yet. Whatever problems Microsoft is confronting these days, the company isn’t going away any time soon, or that matter for the foreseeable future. It is huge, well entrenched, and, frankly, people are just plain accustomed to using Windows, Office and all the rest. But there are troubling signs, and comparing the recent performance of Apple and Microsoft speaks volumes.

    With Apple releasing it’s fourth major upgrade to Mac OS X, ahead of schedule once again, you have to wonder what it is doing right and what Microsoft is doing wrong. The last major upgrade to Windows came out in 2001, not long after Mac OS X 10.1 appeared. Sure, there have been updates to Windows XP, but they are just maintenance updates, such as SP2, which improves security from perfectly awful to mediocre.

    Oh yes, there is that 64-bit version, and Microsoft loves to boast about the support for the new, speedier chips from the Dark Side. You do recall, though, that Mac OS X 10.3 Panther, released in October, 2003, also had 64-bit support to help fuel the Power Mac G5 and the iMac G5. Well, better late than never.

    Now Microsoft is hoping to release its next great thing, Longhorn, some time in 2006, and I expect it will appear by then or shortly thereafter. Why so late? One excuse is that a large number of software engineers were diverted to fixing the security lapses of Windows XP. Well, I suppose there’s some credibility in that, but even when Longhorn appears, it won’t be quite the product it was originally intended to be. Far from it.

    Along the way, features have been shed or modified in an effort to get back on schedule. Of course, this isn’t entirely unique to Microsoft and many other software companies, but it’s an embarrassing failure. For example, WinFS, the new file system for Windows, won’t be ready, except, perhaps, in beta form. Avalon, the fancy graphics engine that smacks of a Quartz Extreme imitator, will appear first as an update to Windows XP. It’s starting to look as if Longhorn, rather than being a major overhaul of Windows, will be just an ordinary upgrade, probably not much more significant than the move from Windows 98 to Windows XP. Well, perhaps a little more, but it’s going to be a hard sell.

    While those who buy new PC’s will get Longhorn, or whatever the shipping version is called, after its release, how many will actually pay cold, hard cash or use a major credit card to buy the upgrade? Do you really expect Windows users to line up in front of a CompUSA at the appointed hour in 2006 or later to buy the latest and greatest? If they even show up to buy a copy, maybe they will just feel relieved. Or apprehensive.

    To add insult to injury, Apple continues to boast that the best of Longhorn is already available in Mac OS X. “Start your copy machines,” was the playful pronouncement at the 2004 Apple WWDC. That’s where the book was first opened in Tiger.

    But it’s not the first time that Microsoft is facing difficulties selling upgrades. What’s the last version of Office for Windows, for example? Ah yes, Office 2003. Does anyone remember? And how many upgrade boxes did Microsoft sell, and how did that compare with the previous Windows version of Office? All right, a decent number of computers ship with Office, so that’s still a sale, even if it’s just a bundled product. To that extent, you can probably rate the sale of a new consumer Mac as a sale for AppleWorks, right?

    The real problem for Microsoft is that most businesses don’t see the benefit of the last Office upgrade. Why pay for features that few people will ever use? Here’s an example: “AutoCorrect options smart tag. When auto-corrections are made, you can undo or modify a correction or specify that the correction not be made again in the future.”

    I bet you can’t live without it!

    Now it may come as a surprise to Microsoft, but most Office users are adept at a few clearly defined tasks, and the benefits of all those new features to a company’s bottom line are questionable. We’re not talking about gee-whiz features for graphic artists here, but email, word processor and spreadsheet applications. What’s so sexy about that?

    Compare, for example, to the simple elegance of Apple’s iWork. The problem with Microsoft all along is that it can’t get past picking up the crumbs from Apple, and it’s having a harder and harder time forcing customers to spend those upgrade dollars. That is except for customers who are on software subscription plans, thus making them eligible for getting all those “wonderful” upgrades automatically.

    When it comes to Windows and Office, it does appear Microsoft’s best days are behind it. It’s still struggling to move beyond its core operating system and office suite base into other industries. Unfortunately, it’s partnership with NBC, the cable channel MSNBC, continues to get lousy ratings. The MSN online service has gone nowhere. Music? Well, Microsoft’s own music download service has been upstaged not just by Apple, but Napster and Real as well.

    Oh yes, perhaps the Xbox is the exception.

    As I said, Microsoft isn’t on life support. Far from it. But as the market share of Internet Explorer dips, and as more and more people buy iPods and new Macs, Bill Gates can’t feel quite as smug as he used to be. Maybe he should just retire and become a philanthropist, giving away the rest of his fortune to those in need rather than worry about his heirs fighting over it.



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