Microsoft Puts On the Brakes
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Have you noticed that Microsoft is trimming substantially (yet quietly) the number of new product releases on its books? This is happening across a number of divisions of the company. In the past couple of months alone, we've seen Microsoft: In all of these cases, Microsoft said that it is pushing back, consolidating and outright killing-off slated new releases as a result of customer and partner feedback. Let's lower our Evil Empire FUD filters (just for a New York minute) and assume that Microsoft is actually listening to its core constituencies and isn't just using customer-input as an excuse for ship dates becoming "slip dates." Say customers and partners actually are advising Microsoft that they can't afford (budget-wise, deployment-time-wise, and training-wise) to keep rolling out new releases of mission-critical apps every couple of years. Instead of frequent incremental releases, they'd prefer the occasional, big-kahuna code drop — so long as it doesn't break their existing apps, mind you. They want Microsoft to slow down because it's been moving too fast. And they want to make each re-lease last…. If this really is what's happening out there, Microsoft execs mustn't be feeling too groovy. In fact, they must be getting pretty jittery. How can you prove you are innovating if you are being requested by your users to delay shipping new product releases so that customers don't get left behind? And even more importantly, if you are Microsoft, how can you keep making money? If your customers aren't keen on moving to a software-licensing subscription model (as is the case with Microsoft's Software Assurance program, based on renewal data), how are you going to keep your business growing when you aren't churning out new, shiny, must-have products at a rapid clip? The way I see it, Microsoft still has a few options in this new, customer-centric world order. The Redmondians could decide to charge for service packs, feature packs and new subscription services (such as the company seems to be planning to do with anti-virus and anti-spyware software, for instance). They could roll out more add-ons for their existing products, as they've indicated they plan to do with Internet Explorer. They could move to more of an IBM model and focus on building up their Microsoft Consulting services business. They could attempt to crack down on those running pirated versions of their products (a la Windows Genuine Advantage) in order to keep the revenues flowing into the Microsoft coffers. Or they could do a combination of all of these things. What's your bet as to what Microsoft will likely do to keep the revenue stream flowing even while the number of new product rollouts is shrinking? Or do you see a different Microsoft world order evolving than I do? Write me at mswatch@ziffdavis.com and |
Comments (1)
On close reflection, if we posit the possibility of service pack fees, antivirus fees etc., and rebuys forced by questionable license inspections (whatever happened to the constitutional limit against unreasonable search and seizure here folks?) what we have is essentially the pay-forever schema originally implied by .NET with less than gentle nudges to make the dream happen.
It was always my assumption that .NET was the technical faux "necessity" by which what amounts to rentalware MS style would be claimed as essential and then forced on the end user. Originally .NET was implied to be remote software and data storage with fees for both, but it seemed to me it was really a process of tucking just enough functionality away from the desktop that apps could be rental-tethered. We are seeing this now with the MSN Outlook payforever rental schema, by the way.
The difference now is that having failed to get big firms to do rentalware voluntarily, and having seen customers in test markets like Australia and New Zealand react with hostility to the subscription sales tests of MS Office a few years ago, the firm is employing the good old Microsoft Nudge (a.k.a. bum's rush) to force compliance.
The ace up the "sleeve" here of course is the DRM-pointed "trrust" heavy Windows LooooooongHorn, whose DRM will be the pretext to lock out most pre-Longhorn apps as "untrusted" and thereby force a huge software sales pressure. Of course MS will be waiting with expense-cloaked Longhorn rentalware/tetherware that will suck up buyer's money so fast little will be left to buy other-than MS tetherware. It will seem a good buy but added up year by year I predict we will pay about the full cost of an upgrade for each app every two years or so. And it will leave little for other than MS tetherware.
It isn't just antivirus and firewall vendors that MS is freezing out now in my view; the introduction of stealth subscriptionware like the new MSN Outlook option will eat up end user revenue such that few will even think of buying third party software.
I also think by the way that MS is quite deliberately killing off the general PC market other than for those systems used by business. When MS said years ago that it envisions home users on the Xbox (with presumably rented home-style apps), I think they were detailing the strategy in a way: Eliminate the local desktop and force users who must have PCs to play in a new "trusted" rental-tethered Longhorn environment. And we thought MS was playing rough with Netcape way back when. Now it is our turn as end users.
Posted by Keith Risler | February 13, 2005 10:03 AM