Just a quick note before we get started: We're giving you a break from reader
feedback this week, even though we've had some great stuff come through recently.
This week's entry
on social networking
has drawn some especially interesting feedback, so
we're actually going to blow that out a bit and come back to the subject in
future RCPUs. In the meantime, keep the good stuff coming to [email protected]
We'll run your e-mails again soon, probably next week.
Anyway, for many people, the title of this entry comes as no surprise (heh
heh). But seriously, folks, the Vista debacle -- and that's really what it is
now -- is starting to bite Microsoft in the...well, in the stock price, among
other sensitive places.
Before we get to that, though, let's go ahead and get one thing out of the
way: We were wrong, apparently, about Vista. Many are the times we've said right
here in this newsletter that Vista would be the next XP eventually, that we'd
all use it and come to love it and miss it when it gracefully bowed off the
stage. We even said
something similar in the more formal confines of RCP the magazine.
And it appears that we -- along with a few analysts, although we should've known
better than to agree with them -- were wrong. Sorry about that.
The enterprise hates Vista, almost in the same way that people "hate"
a food they've never tried or a city they've never visited. That is to say that
most people we know who have Vista actually kind of like it -- maybe it's an
acquired taste -- but those who don't have it absolutely, completely, definitely
don't want it. And despite Microsoft's many claims of Vista success, the avoiders,
as far as we can tell, still greatly outnumber the accepters.
That's probably why we're hearing so much about Windows 7, the next version
of the operating system, which Microsoft seems to be rushing to market in an
effort to make up for Vista. We've already had limited
demos of the new OS, even as Microsoft is still ostensibly trying to move
us to Vista. Let's just say that the emergence of Windows 7 hype relatively
early (perhaps very early) in Vista's intended lifecycle isn't exactly a subtle
move on Redmond's part.
From a partner perspective, Vista's main cost has probably come in customer
confidence; after all, not many enterprise partners make serious money these
days by selling an OS. But they do sell Microsoft applications in an increasingly
competitive and dynamic (no pun intended) environment, and when Microsoft trots
out an Edsel like Vista as a long-planned, long-hyped major release, it doesn't
exactly inspire confidence that Microsoft's other big products -- such as this
year's batch of servers -- will be winners.
That might be (and probably is) unfair, as the new server team is mostly getting
rave reviews, and new-ish products such as SharePoint have taken off very well
indeed. Still, Vista's relative failure might make customers think twice about
trusting ol' MS, and that's not a good thing in today's competitive environment.
For Microsoft, though, the cost of Vista has been higher -- much higher. And
that's why we have an excuse to rag on it again today. BusinessWeek --
the best business magazine out there not named Redmond Channel Partner
-- documents this week the fairly
steep financial cost of Vista to Microsoft. The forlorn OS is taking a bite
out of Redmond's revenues and stock price, and big, big businesses (think GM)
are increasingly looking at passing it by altogether.
That's bad news for partners, too, as less money flowing into Fortress Microsoft
will mean less cash trickling down to partners. More than that, the pressure
is on Microsoft to execute now -- with Windows 7, with its critical SaaS efforts
and with generally adapting to a rapidly changing (more rapidly now, we'd say,
that in the last five years or so) software market.
Can Steve Ballmer, Ray Ozzie, Kevin Turner -- and, critically, not Bill Gates
-- and their 80,000 or so colleagues pull it off? We'll see. Vista disaster
or otherwise, we still wouldn't bet against them.
How much has Vista cost you, if anything? Send your thoughts to lpend[email protected].
Posted by Lee Pender on 06/12/2008 at 1:22 PM