Considering the bad and often unfair press that Vista got during the last months, it must surprise many that Microsoft reports the fastest revenue growth in any first quarter since 1999. 88 million Vista copies have been sold by now. That's more or less the population of Germany. Since many have been waiting to upgrade, mostly because of the bad press, I would expect that it won't be the last record that Microsoft will set in the near future.

These numbers fit well to a report on eWEEK claiming that Linux loses market share to Windows Server. According to IDC, Linux had a negative growth of 4% in the x86 market in 2006, whereas Windows Server was outpacing the total growth rate by more than 4%.

I must admit that I wasn't expecting it so soon. When I first played with Windows Server 2008, I anticipated bad times for Linux to come. I also thought that it will take quite some time until Windows users would give up their beloved XP. So where will this all lead to?

You might think that I would like these developments since I am running a blog for Windows administrators. The fact is that I am in no way emotionally connected to Microsoft or Windows. If I would come to believe that the future belongs to Linux, I would certainly say good bye to Windows from one day to the other. I work with Linux almost every day, and I confess, it is more fun to play with. However, from a technical and economical point of view, I can't see how I could justify a move from Windows to Linux in my organization.

So whom can you blame for this development? Certainly not Microsoft. They do what all companies are doing. They try to earn money. I never believed that their success was in any way related to their often rude business practices. The contrary is true. Ballmer and friends did more harm than good to Microsoft with their rude and brash manner. No other company in the software business has such a bad reputation as Microsoft. I think it is the only company where people say that they don't buy their products because they don't like them.

Frankly, I believe that one has to blame Microsoft's competitors for the Windows monopoly on the desktop. Since I have followed Microsoft's success story (more than 20 years), its competitors always tried to beat them by doing things in a completely different way. IBM, HP and Sun tried to sell their operating systems as add-ons to hardware. What a big mistake! And do you remember the OS/2 fiasco? IBM still thinks that the only use of software is to sell hardware. That's why they like Open Source so much. Now they don't even have to pay the programmers anymore. As it turns out now, this stance was the best that could happen to Microsoft.

Novell only understood much too late that you can only sell a server operating system if you also have a client operating system to offer. And newcomers such as Red Hat are too dependent on the Open Source community who mostly cares about playing with technology instead of thinking of end users who don't give a damn about the moral superiority of the Open Source movement, but just want software that can be used without reading countless man pages first.

And Apple? They have those smart developers creating great operating systems. And for what? Only to sell it with overpriced hardware to a minority of style freaks. I think that Apple is the only company at the moment that could stop Microsoft. The problem is that they don't want to. To be precise, their CEO doesn't want to. He just doesn't like tasteless Windows users. He only likes to sell his white toys to those who have style (and enough money, of course). Yeah, if I had to pick one person to whom one should ascribe Microsoft's success then it certainly would be Steve Jobs.

So, hardware add-ons, moral superiority and style didn't stop Microsoft. What's next? Google? Can a tiny Web browser with a couple of mega bytes really compete with a full-blown operating system? You really have to be a very optimistic Microsoft opponent if you believe in this. It didn't work with Netscape and not even all of Googles's money can change the technical facts. For most applications you simply need a fat user interface. A Web browser will never be able to cope with this.

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I wonder why people won't look first at Microsoft's yearly growth in revenue before they start talking about their decline. I wonder when Microsoft's competitors will finally understand that you can beat them only on their own turf and not by playing a completely different game on quite a different field. I suppose it won't happen in the near future. So I wonder if things will finally change once Microsoft also reached a monopoly in the server market. In the end it might turn out that only governments can stop them. It seems that the EU commission is quite aware of this already. What an embarrassment for Microsoft's competitors!

4 Comments
  1. Jim 15 years ago

    I certainly agree with much of what you say.

    Some comments though…

    Revenue growth is only a positive sign for MS, shareholders, and fanboys. Consider that they released a number of different versions of Vista, some with jacked up prices, so yes you will find greater revenue growth.

    As for blaming competitors I agree. Over the years alot of tech companies have been pretty volatile unless they settled into a niche like Adobe. Not many had good vision and execution. MS is guilty of this as well however they got so entrenched early on they can make mistakes as well as vapor announcements to detract others so that not many can get the upperhand.

    While there are some good things that come out of MS, much of what they do is truly crap like a kid trying to use a magic marker over the top of a bad crayon drawing. If all things were equal now, I can’t see MS being dominant by any means. The planets being lined up like they were back in the day and being able to use IBM just isn’t going to happen now. Many view MS as the current IBM in terms of influence. 5-10 yrs ago I would agree. These days it’s Google. Maybe someone can use them to vault to the top but I don’t see it happening anytime soon.

    Some feel Apple could do challenge MS and maybe they will. Some feel Linux could do challenge MS and maybe they will. The thing I remind myself is so what? The market will speak even if they are heavily influenced. The market wants to see good execution. MS used to provide that. Right now, Apple and Google might be the only two big ones that are executing pretty well.

    Most thought Apple didn’t have a chance but look at the last few years and see that they’ve mounted an incredible turn-around that truthfully doesn’t show signs of stopping anytime soon. While they are focusing on different markets, it doesn’t mean that they won’t or don’t impact the same markets.

    Linux is what it is. The number one thing about Linux isn’t that they focus on open source but that it’s “free”. Of course many businesses are finding out that it’s not truly free.

    No matter though Apple and the Linux community are formidable competitors for MS in the OS realm. Again though just as before MS is so entrenched that either of those two aren’t going to make much more of a dent than they already have. Apple knows this…the Linux community, well, some might, some might not. It will take time before we see if either can.

    MS isn’t going anywhere anytime soon. They’re too entrenched and too big. Maybe it will take governments to address it but honestly I think MS will eventually undo themselves as they grow too big to manage. It’ll be up to others like Apple, Redhat, etc. to be ready and execute. Execution will be critical.

  2. Hi Jim, I agree with many of the things you said. However, I don’t think that much of what MS is doing is crap. If this were true, it would be hard to explain their success. Do you really think that you could build up the biggest software company just by bad business practices? Or how else can you explain their success? Perhaps because all their competitors are producing even more crap?

    You say that there are formidable competitors. Apple is certainly doing fine recently. But much of it is related to the success of the iPod. I seriously doubt that they can compete with Microsoft in the OS market as long as they bundle Mac OS with hardware. And if Steve Jobs fires all his designers, and hires some usability experts from Microsoft instead, there would be a good chance that Apple could be a real competitor for MS. As to Linux, it could be that this OS has already seen its best times. The fact that they lose market shares to Windows even before Windows Server 2008 comes out isn’t a good sign. As long as OSS programmers don’t focus on usability first and on technology second, they will never be able to catch up with MS.

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