"Microsoft's Business and Server and Tools divisions are largely insulated from economic downturns because of annuity licensing contracts."

That does not help if the company with the annuity contract goes out of business. You could argue they are better off getting the money up front while times are good.

I think that there will be a lot of pressure from the netbook manufacturers to drop the price of Windows for netbooks. The last figures I saw had XP being sold at $30 and 7 sold at $60. That is very hard to justify on a $150 netbook.

"Windows Vista came just 18 months after Windows 2000"?

:P

A few points here:

1. This is most likely a Depression, at least in the USA, and it is showing all the signs of getting worse. (hopefully I am wrong)

2. Netbook sales will most likely increase in percentage this year Joe, cutting further into the MS profit pie. The reasons for this, are (A) Netbooks with their small form factor are easy to carry around. (b) Cheap, compared to other Notebooks, and this will take on huge importance during an economic downturn. (c) This could be one of the only places where its easy to get Linux or XP preinstalled, as Notebooks will likely only be offered in major retailers with Vista/Seven.

3. Expect the movement of users from Windows to alternative Operating Systems to continue. MS will continue to lose desktop share, and this could even snowball, as more "gurus" move to GNU/Linux and become proponents. Seven is going have to offer something more than eye candy like a new mac like taskbar and ribbons. That is not real value. Bug fixes and tweaks should have been included in the next service pack for Vista, so Seven fixes over Vista, is again no real value. Extra DRM in Seven over Vista is absolutely no value whatsoever!

4. If Seven is late, if Seven is perceived to offer no real value, expect more losses to other alternatives. Expect partner OEM's to rebel to some extend, and start some pre-install of Linux, if Seven is a flop like Vista was/is.

5. And then there is the big wild card, what will the EU courts do?

6. As billybob said, the pressure by OEM's for a cheaper Windows will be extreme if sales fall badly.

7. With Steve out of the picture mostly at Apple, hopefully just for now, will his replacement, decide at some point to cut prices on Mac computers? This will definitely sell more computers for Apple, and cause more pain for OEM's, if they do.

8. Believe it or not, I do not want MS to fail and go bankrupt. Not that it would sadden me to see them go to the dustbin of computer software history, mind you. What I am fearful of, is that if, is if things got so bad that MS failed, that our corporate gov here in the USA, would say that they are too big to let fail, and use taxpayers money to bail them out. Scary. Other than that, its mostly a plus to see them gone, except for the jobs that the softies would lose.

Joe;

"Windows Vista came just 18 months after Windows 2000, which many businesses either had started to deploy or planned to. Seven will ship 30 months or so after Vista, which only 10 percent of businesses have adopted, according to Gartner."

According to my internal clock, it, Vista came out almost seven years after Windows 2000 was released, right?

"It's also tempting to argue that this recession is the same as the last one. It's not. The economic situation is much worse, yet PC shipment growth figures are similar or slightly better than the previous recession. That's a sign nobody should ignore."

ABSOLUTELY TRUE...

Joe;

chips wrote: "What I am fearful of, is that if, is if things got so bad that MS failed, that our corporate gov here in the USA, would say that they are too big to let fail, and use taxpayers money to bail them out. Scary. Other than that, its mostly a plus to see them gone, except for the jobs that the softies would lose."

First off, chips and I may have a difference of opinion about things, however "corporate" I would change out for a better word of "Socialist."

However, I fear that chips may have a very valid point, that is, if it happend, or happens. I personally don't see Microsoft filing for banckrupcy, least not anytime in the near future. There would be some drastic changes, Ballmer removed -- He should be removed anyway along with some others.

Sorry about that -- Joe I got cut off... Not a hardware issue, grandkids.

If, Microsoft fails, many companies outside Microsoft would fail, and concequently do the same thing. There would be "a great dying" in America and throughout various parts or areas of the world. No, I think it would be a drastic domino effect. Won't be the end of the world, might be for some, granted -- I really think with the BS war, the bailouts already, America cannot, and should not bail out Microsoft, or any of these companies to include the three major American Automotive companies either.

Typo: Windows Vista came just 18 months after Windows 2000

You meant Windows XP...

BillyBob, did you make that $150 Netbook yourself? Remember, the operating system is the most important part of any computer, it allows your applications and devices to interact with each other efficiently. Windows does that best, it provides a rich, easy to use experience. Linux is an OS that is still trying to find itself.

Chips, what will it be this time 2009 the year of Linux or maybe 2010? 'YAWN'. Windows will be around as long there is a PC, it will continue to dominate because it does the best job - simply it just works. Linux has merits, but those merits are theoretical rather than practical. Windows is secure, efficient and everybody loves it. The rave reviews that Windows 7 has been getting proves that everybody cares about this platform.

When you think of Reliability, Compatibility, Security, Support, Ease of use - think of Windows.

Yes, netbook sales are doing really well. But their growth will only serve to drive down Microsoft's profit margins.

@Andre

Well said, well indeed... =;o)

10% adopted vista.
The other 90% is most likely still on XP
XP support is going to end on April 2009
The hardware running XP will most likely be old too.

In light of those points I'd expect corporate spending on PC's and thus OS's to actually go pretty well as soon as 7 comes out. Perhaps some companies will get an Enterprise Agreement or at least Software Assurance on Vista earlier so they are eligable for 7.

Worm infects 1.1M Windows PCs in 24 hours

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9125941

" The computer worm that exploits a months-old Windows bug has infected more than a million PCs in the past 24 hours, a security company said today.

Early Wednesday, Helsinki, Finland-based security firm F-Secure Corp. estimated that 3.5 million PCs have been compromised by the "Downadup" worm, an increase of more than 1.1 million since Tuesday.

"[And] we still consider this to be a conservative estimate," said Sean Sullivan, a researcher at F-Secure, in an entry to the company's Security Lab blog. Yesterday, F-Secure said the worm had infected an estimated 2.4 million machines."
--------------------------------------------------
Yep, its a windows worm.

Hacker leaves message for Microsoft in Trojan code

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9125745

"Zlob is one of the most common types of Trojan programs used to attack Windows these days. In a typical Zlob scam, the victim is sent a link to what looks like an interesting video. When the link is clicked, the user is told to install a multimedia codec file in order to watch the video. That file is actually malicious software."
----------------------------------------------------
Yep, its a Windows Trojan.

@Draoi Dubh
I think you have a very valid point when you say that if Microsoft fails, it will failure for many other companies.

In my first week here, someone quoted me a statistic about the amount of money Microsoft partners make for every dollar of money Microsoft makes. I can't remember the exact figure now, but there are a lot of companies who make their profits by selling, implementing and building on top of Microsoft solutions.

While I don't want to see Microsoft go down for the sake of my bank account :) I think that there would be a serious effect on the IT industry if they did. That's something non-softies need to consider as well before wishing this company gone.

In the history of IT there was a lot of big companies that closed like DEC,Ashton-Tate, Borland to name a few. These companies had a lot of partners world wide but the failure didn't mean that these partners closed also. They just changed to something else (like MS!) and continue business. The same will happen if MS close someday. Nature and business hate void and there is always someone that will replace that void. Also if this think ever happen it won't happen in one day. It will be a gradual thing that will last for a few years at least. Plenty of time to find alternatives which are already here BTW.
In my few posts here, although i read the post for 2 years almost, i never commented on any user personally but this guy Andre starts to look like a robot or something. I mean we got it Windows offer a rich experience you don't have to repeat it in all of your posts.

@Dimitrios
You're right. If there's a gradual shift, the partners would be able to find other sources of income. But there are some people in the IT world who seem to think it would be great if Microsoft went down overnight. I don't think that's at all likely - and I also don't think it would be a good thing (and not just for the sake of my paycheck).

"BillyBob, did you make that $150 Netbook yourself? Remember, the operating system is the most important part of any computer, it allows your applications and devices to interact with each other efficiently. Windows does that best, it provides a rich, easy to use experience. Linux is an OS that is still trying to find itself."

Linux is a much more flexible OS than Windows so is a better fit for Netbooks. MS had to take 18 months out to manage to get Windows to work (and that is taking into account increasing netbook specs). If you create your own Linux distro then the licensing is free meaning you save $60 per netbook. That's a lot on a $150 base price. Even if Windows is more rich, $60 is too expensive $30 is more like what the market can handle.

When you think reliability, speed and security, think Linux. That is why so many companies are using it as a base for their OS. Just look at Palm and Google.

P.S. Why do all your comments about Windows include the word rich? What exactly does it mean in this context?

When you think Windows, think many many different pieces of software required just to keep it free from viruses. Even experts cannot work it out so I feel sorry for Joe Public.

http://www.theregister.co.uk/2009/01/15/royal_navy_email_virus_outage/

Is that what rich means?

Where are all the Linux viruses we were promised?

What did corporations learn by not installing Vista? If their takeaway was that XP is good enough it will impact 7 sales. Will the failure of Vista mean the end of the automatic upgrade to the latest OS? Maybe, especially during hard times.

Will those who buy netbooks be more likely to buy MS Office or go with Google Apps? It would seem likely that they would go with the lower cost option: Google. Of course there is the Office lock in to consider: everyone in the business is using Office and you need to communicate. So I guess it comes down to whether people who buy netbooks do it for price or portability. Time will tell.

What is probably most important to see is the renewal rate for Software Assurance over the last quarter and the rest of 2009. If projects are being put on hold then corporations will be paying for upgrades they have no plans or resources to use. Many will face the choice of cutting Software Assurance or cutting staff. It is likely that there will be cuts here if the budget managers are on their toes. Hopefully this will be broken out when Microsoft reports results.

Despite any ideological arguments I think the fact that corporations are skipping Vista is the biggest factor. The OS (XP) and software, as well as the hardware of their fleets will need to be refreshed eventually. Depending on the severity of the global economic problems some could delay these upgrades for maybe another 1-2 years. But I think there will be a major refresh cycle starting within the next year regardless. If Microsoft can get 7 out by mid-year I think we'll see some of the more agressive companies, or those with the oldest fleets making an effort to start refreshing by beginning of 2010 with 2010-2011 being peak years, maybe even into 2012. It's important to keep in mind that for large environments the development, testing, and planning for OS/hardware upgrades can easily take 12-18 months.

This will give Windows 7 a major boost in adoption rates compared to Vista. Barring any missteps I expect 7 will see very fast adoption rates.

I also think this upgrade cycle will definitely provide opportunities for Linux and Mac in corporate environments. I would look for corporate Linux solutions from IBM and other big service providers that include transformation, end-user training, and ongoing maintenance and support. If they can bundle these in a way that beats or at least meets Microsoft's TCO when ammortized over fleet lifecycles I think there could be some big wins. Especially for industries where XP and Office 2003 are "good enough" and they can more easily replace these with low-end hardware and Linux-based solutions.

I think the mainstream will remain Windows for some time though. After a major failure with Vista, Microsoft has a lot of variables working for them with Windows 7 and so far it seems they are executing. Always interesting to watch!

Chad

Andre said:

"When you think of Reliability, Compatibility, Security, Support, Ease of use - think of Windows."

Go back to the "rich user experience" stuff.

Are you now taking drugs? I won't even dignify that crap with constructive criticism.

I think Vista broke the hardware/opsys upgrade hamster wheel. Corporations saw that the world didn't end if they didn't get new computers for every employee every three years. I think the main thing that forces new computers is hard drive failure. With large flash memory based harddrive replacements on the market, I wonder how long lifed a computer will be expected to be. Probably the only thing that will need to be replaced will be the keyboard and someone might start making metal keyboards again (like the old IBM ones) that last forever. Current word processors, email and browsers are plenty good enough, I think companies are going to start to look for computers that last 10+ years without requiring an operating system or office upgrade.

I also think many companies are deciding the annuities they pay MS aren't worth it and aren't renewing, which will be a long term problem for MS. This is being precipitated by MS stopping support for products enterprises rely on like VB6, FoxPro, etc. these are too expensive to replace.

@Jess
I've been around this business long enough - 30 years =:-0 - to have lived through two "sea changes." In the late 80's the landscape was dominated by IBM mainframes. Within a few years, these were swept away by the DEC VAX and similar minicomputers. In the late 90's, these, in turn, were swept away by PCs. Neither change resulted in economic distress. To the contrary, the changes allowed huge growth in the industry. Microsoft, as did IBM, will survive the upcoming sea change. However, it will not be the same Microsoft we know and hate (or love) today.

Don't count on any Windows 7 upgrade purchases from Circuity City this year. Couple that with the thousands of other businesses already struggling to stay alive. I think there is excitement with 7, but it will be tempered by the economic realities of 2009.

http://www.foxbusiness.com/story/markets/industries/retail/circuit-city-liquidate-remaining-stores/

@Andre

I had to laugh when you mentioned security as a Windows strength.

http://www.cnn.com/2009/TECH/ptech/01/16/virus.downadup/index.html

@JM:
Not only Circuit City but remember COMPUSA, they jumped on the Vista bandwagon, thinking they were going make a bundle with people buying upgrades and Vista software, and where are they now. Seven is Vista, and no matter how much better it is over Vista, it cannot replace XP on older machines as a rule, because of no drivers for many of the old hardware in those machines. That is the rule, of course, there are some exceptions to every rule, speaking of the old XP hardware, that is.

Not only that, since Seven is Vista, where is the value, what will it do that XP cannot with a few freeware or open source additions? There is none, User Interface changes like the taskbar, ribbon, and removing run from the Vista menu, are not what users want, in fact most will hate those changes, and will stop many from moving to Seven. MSFT need to look at the core problems of what Windows user are up against, and fix those usability problems, not fix that which is not broken. There is no value in Seven, it not even a decent service pack so far for Vista.

@JM & Samuel:

CompUSA & Circuit City had bigger problems than simply people not buying Vista running PCs. Their financial states don't hinge on just one poorly selling, customer-maligned product. (Al has yet to meet a legitimate person who speaks glowingly about Vista. the reaction is either indifference, or disappointment on the shabbiness of the OS. And having had the opportunity to troubleshoot a Vista machine, the sooner MSFT can bury the Vista corpse, the better)

Why do people keep on insisting that Google Apps is cheaper than MS Office. At $50/year this is demonstably wrong, and on top of that it is an inferior product. I defy anyone to show me how Google Apps is cheaper or better than MS Office.

Nice rundown of the actual PC numbers and what they might mean on a relative basis, Joe. Puts it in some context versus all the gloom and doom.

@AL and Sam

I should have clarified that the Circuit City corporate offices will not be upgrading to 7 because it is liquidating (not because it is selling Vista in the stores). That is what I meant that any optimism for 7 will be muted by business failures and the unemployment rate.

@Dave, JM
Chips kindly explained to me here about Andre Da Costa many months ago. The guys a legend. Whilst his posts come across like a pitch from a desperate used car salesman (IMO) I dont believe this place would be the same without him!
-
Andre always manages to lighten the mood. Some people call him a shill. I really cant see it, I cant see why anyone would think his transparent comments that often provoke links with news/information detrimental to MS, would be worth paying for. That being said, we move on nicely (thanks guys) to the subject of free laptops and a question that Andre has ignored 7 times now.
-
For everyones information (including Andre) I will continue to ask this question until I get an answer. I believe this matter needs to be cleared up so that people can judge how much worth to put in his comments. I wont explain the story in depth (thats coming in an open letter to Andre on my site shortly) Ill just ask the question again (8th time)
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Andre, you said on your blog you were not going to last years PDC (FYI I have a screendump of that page) yet an independent site quotes you at the event. Where you there? Did you receive a free laptop?
-
As always Andre Da Costa, a simple yes/no will clarify this matter.
-
Moving on:
@Steve
Quote "I defy anyone to show me how Google Apps is cheaper or better than MS Office."
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I havent used Google Apps so I couldnt answer, but whats your take on OpenOffice V MS Office?
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@Billybob
I know we have had our disagreements in the past and I do believe I have previously done you a great disservice, as the quality and level of knowledge in your posts suggests a deep understanding and I find all your posts very interesting (I should have said that before now). I know you dont need anyone to defend you, however the comment aimed at you
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"rating system is the most important part of any computer, it allows your applications and devices to interact with each other efficiently."
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In respect of Windows/Linux, had me in stiches. This was exactly the experience I didnt get when using a Windows platform at home! and is the reason I moved over to Linux.
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@Jess
Quote "But there are some people in the IT world who seem to think it would be great if Microsoft went down overnight"
-
and thats where I have to be careful, lest my posts appear as having that view. I agree with you Jess, its not going to happen. I personally think MS has done some great things (especially for the home user) I think MS is in no small part responsible for affordable technology for the home user, I think MS is responsible (in the past) for setting a benchmark or minimum standards for software, and has acted as a central point for all other products to compare themselves to.
I think MS is in no small part responsible for attracting more people to computers, and many more things I could type about.
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However that was in the past (IMO). Whilst its great we have all these things, diversity in the software world (IMO) is essential from keeping any/platform product going stale. Ive said before I would like to see a more proportionate market share of ALL OS in order to keep that "competition" alive and force everyone to "up their game"
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Will it happen? I wouldnt put myself on offer by suggesting either it will or it wont. But I hope that it doesnt matter if you believe MS is the future for you or indeed MAC/Linux, we can all agree that competition produces better products than simply one company with total domination.

Andre Da Costaa :wrote

"Linux is an OS that is still trying to find itself."
-----------------------------------------------

You are absolutely right. Linux is finding itself on more and more computers everyday. Linux has found itself on many of my own computers.

Windows Licensing schemes such as making a school pay $40 per year per computer @ 800 computers is a good chunk of change for Xavier school.

Guess what?

Like many others have found the switch to Linux has helped this school save a lot of money. And this isn't a isolated event, this is a daily occurrence.

Many are switching due to economic reasons, but beyond that...switching to Linux is the smart, safe and most logical and economical choice for any company or for any organization.

Please don't take MY word for it.... read about yet another defection from Windows.

http://www.chinwong.com/index.php?/site/comments/dump_windows_save_millions/

Ralph: 'You are absolutely right. Linux is finding itself on more and more computers everyday'

PC PRO Last Edition:
STAR LETTER The groat Ubuntu experiment
l've been a Windows admin for more than 14 years now, but recently l've round myself paying more attention to the Linux market, and with the release of Ubuntu 8.041 decided it was time to finally give it a try.
I started a couple of months ago by migrating my home computer, and round that the whole expérience was incredibly painless and far easier than I was axpecting. Being able to browse the Internet without worrying a bout vi ruses is q trite a surreal expérience, although like any good Windows admin I'm still a little paranoid, which means l'm running NoScript and I set up regulär backups just in case. To be fair, Ubuntu does have its rough edges: I had to disable the 3D desktop effects on one machine to résolve a problem with Ubuntu crashing, and my home printer is playing up a little, but other than that it's been remarkably trouble-free.
In fact, everything about Ubuntu feels faster than XP. Browsing files on my domain is snappier than it is with Explorer. Reading PDF and Office files feels quicker, too, with large PDFs being really responsive. One of the biggest differences, though, is writing CDs. Anybody who's done this in Windows will know what l'm talking about. Start burning a CD and you can forget about doing any useful work for the next live minutes; if you have a DVD to do you may as well write-off the morning. It's so bad that we actually bought an extra Computer at work, just for producing our DVD archives.
On the down side, though, while Ubuntu does nave good support for Windows networks, I can't manage completely without XP. After all, I'm managing a Windows network here, and there's an awful lot of software that's Windows only. Ubuntu does have a lot built in: I can browse files on the domain fine, and its Remote Desktop Protocol support is great for managing my servers, but things such as Group Policy and Active Directory really need a Windows XP workstation. Despite that, they'll have to pry Ubuntu from my dead hands.
-----------------

This is just to example, there are more about, Ubuntu is arriving its maturity

steve says:

Why do people keep on insisting that Google Apps is cheaper than MS Office. At $50/year this is demonstably wrong, and on top of that it is an inferior product. I defy anyone to show me how Google Apps is cheaper or better than MS Office....................

Well steve, is it, I don't use Google Apps, so I could not tell you where its better than MS Office, except for that you were not entirely being 100% honest about Google Apps being $50 a year. OpenOffice and Abiword are definately a better solution than buying the farm with MS Office. Standard is free, BTW.

Its a common form of Propaganda to mislead by omission. You know, leave out a fact or two.
Now maybe you did not mean too, but one does wonder when someone new with just a surname pops out of nowhere with a post like yours.

The fact is there are two Google Apps, Google Standard Edition, which is free up to 50 users, ad supported, and Google Premier Edition, which is $50 a year after the free trial period.

Folks, you have to wonder about these Microsoft people when they make blanket statements running down the competition, without providing any prove, or links. Guess we will never know what the motive was here, but we can all guess.

And here is the link to Google Apps:
http://www.google.com/apps/intl/en/business/editions.html

@The Far Left Hand of God
Agreed, and one just has to do a quick Google to see the seriousness and extent of the practices that Microsoft are alleged to be involved in.