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The Fear-Factor: Yes, Microsoft Has Lost its Clout!

Once upon a time, the name Microsoft invoked feelings of abject fear from most of its competitors. And no wonder. The world’s largest software company was notorious for entering PC-related markets and squeezing out competitors. Its victories over the Mac and Netscape are legendary.

However, as Apple continues to dominate the headlines, not just in the tech pages of your daily newspaper, but just about everywhere, it seems that Microsoft doesn’t quite seem so tough anymore. For example, when the Zune music player arrived last year, fanboy fawning over the product was surprisingly low-key. Except for a few apparently subsidized sites early on, the product’s buzz quickly fizzed out.

These days, you hardly hear much about the Zune music player, which you have to regard as an abject failure. Even Microsoft’s own promotional efforts to yield memorable results, as if they knew it was a misguided venture.

In fact, it seems as if more and more people are inclined to stand up to the Redmond giant. Take Dell, now struggling to reverse falling sales, which is reportedly mulling over the idea of offering desktops with Linux preloaded. According to an online statement: “We will expand our Linux support beyond our existing servers and Precision workstation line. Our first step in this effort is offering Linux pre-installed on select desktop and note-book systems.”

It’s not likely that Dell is going to say anything publicly about whether they’ll still have to pay the Windows “OEM tax” exacted by Microsoft for each PC sold. Maybe it doesn’t matter, because the PCs involved are higher-end products and Dell can afford to assume the loss.

So how are Steve Ballmer and Bill Gates reacting to the news that one of their largest customers is openly defying the Windows hegemony? No doubt they are seething inside, but they would also face consequences from the Department of Justice if they tried to object too strenuously, although I wouldn’t doubt they are expressing their displeasure privately to Dell executives.

Then there’s the announcement that HP is ditching its line of Media Center PCs.

The more important thing is that all this is just the latest evidence that Microsoft is becoming more and more of a paper tiger. Now it doesn’t mean they don’t have any influence. No company that large can be remotely considered to be powerless, but how things have changed!

Yes, Microsoft boasts that they’ve sold 20 million copies of Windows Vista, but the vast majority of those copies are simply loaded onto new PCs. As with those inflated Xbox sales claims, these figures presumably include the number of units shipped, rather than how many actually reached the hands of customers.

You could, of course, point out that this is more than the number of copies sold of Windows XP in 2001 over the same period of time, but fewer PCs were sold then, so that compensates. However, I have to wonder how many Windows users are begging for a downgrade to Windows XP? More to the point, would the manufacturer still have to pay for Windows Vista and thus count that as a sale for the new operating system? Ah, contracts, contracts. You never know just what’s going on behind the scenes.

At the same time, Apple is poised to gain a huge amount of traction under these circumstances. Everything it’s doing appears to be coming up roses. Just the other day, AT&T announced that they’ve had a million requests from customers who want to know when the iPhone first becomes available. After a short delay in shipping the Apple TV, it has been reported that sales could amount to a million or a million-and-a-half units this year alone.

Inasmuch as both the iPhone and the Apple TV use an embedded version of Mac OS X, I suppose you could count them as potential sales for that operating system. No matter. It just shows how well Apple has managed to leverage its crown jewels and bundle it seamlessly into additional products. I don’t think that Microsoft has done near as well with Windows CE. Do you?

And as more and more tech journalists — even the ones who supposedly tout Windows as the appropriate solution — suggest that the Mac ought to be considered as a viable alternative — it’s clear the climate has changed big time.

I can’t wait to see how it all plays out.