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  • Welcome to Microsoft’s Newest Sales Tactic

    May 17th, 2007

    Over the years, Microsoft has without doubt used every sales trick in the book with which to hawk its products. Back in the 1990s, for example, facing threats from advanced operating systems from NeXT and other companies, Bill Gates touted a formidable new technology called Cairo that would virtually destroy the competition.

    Over the years, Microsoft delivered Windows 95 and its various successors and the server-grade Windows 2000, but Cairo never arrived. Despite its non-delivery, Microsoft has extraordinary clout, so tech pundits invariably accepted the broken promises from Gates and Steve Ballmer as gospel. The hard questions about promising one thing and delivering a second-rate substitute were seldom raised.

    The operating system formerly known as Longhorn was the 21st century equivalent of Microsoft’s grand bait and switch scheme. Over the years, key features were ditched, and the original Longhorn was reincarnated as the slimmed down Windows Vista. Slimmed down, by the way, not in efficiency and speed, but in terms of its capabilities. As an operating system, it requires powerful hardware to deliver decent performance and its full 3D graphics eye-candy.

    To be sure, I suppose the PC box makers must feel good about Vista, because it ought to boost the sale of new computers. Indeed, Vista will be vastly compromised on the $399 PC you buy at a consumer electronics superstore, so you are forced to upgrade. Those cheap boxes mean slim profits for their makers, so if they can convince you to buy something heftier, great. Thank you Microsoft!

    Of course, this is not to say that Vista is necessarily a bad operating system. If it realizes even some of its promise of far greater security, it’ll mean a lot to the home and business users who will inevitably adopt it over the next few years.

    So how well is Vista doing? Well, if you can believe Microsoft, some 40 million copies have been sold, mostly preloaded on new PCs. The number of actual upgrade packages purchased, which generate a much higher return on each unit sold for Microsoft, is far, far less.

    The figure is supposedly a lot more than Windows XP in 2001, but you have to remember that far more computers are sold these days. More to the point, it is widely reported that many of those PCs are still stored in stock rooms and haven’t actually been sold to end users.

    So is Vista a train wreck? A good question, and not something I’m about to claim right now. Vista’s biggest and best chance to gain traction will occur during this year’s holiday season, when Mac OS X Leopard will also be in full bloom.

    For now, however, Vista has made little if any noticeable impact on the sale of new Macs.

    So what is Microsoft going to do next to fuel sales? How about the implied threat of a lawsuit? Well, maybe not, but that was the impression created when the story appeared this week quoting Microsoft as claiming to possess some 235 patents covering various elements of Linux and Open Office technology.

    How are IT managers who are considering a migration to Linux or another open source operating system supposed to react to the possibility that they’re using software that may violate Microsoft patents? Will they shy away from dumping Microsoft in fear they’ll be sued to recover license fees?

    Good question, but Microsoft is now saying that it really isn’t planning to sue anyone, and, apparently, hopes to ultimately make license agreements with open source developers to cover its alleged intellectual property.

    Talk about the great game of poker! You see, Microsoft has, so far at least, not disclosed precisely which patents are involved. All large technology companies have huge portfolios of patents. In fact, with frequent patent lawsuits an ever-present possibility, you can bet that a company will apply for a patent even on the suggestion of a potential innovation. They need those patents — assuming they’re granted of course — in the hope of providing solid defenses against the threat of patent litigation, as a means of exacting license fees or just bluffing the competition.

    Indeed, just what is Microsoft’s end game here? Are they trying to use fear to force people to choose their products instead of the competition, because they can’t sell their products on their merits alone?

    I do hope, for Microsoft’s sake, that this isn’t a new trial balloon, or realistic threat, but just a few executives speaking silly words out of turn. Of course, considering some of the stuff that comes from the lips of Gates and Ballmer, they are simply following their leaders.

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