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November 21, 2007 4:05 PM PST

Scary news for Microsoft in HP's earnings call

Posted by Matt Asay
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HP never saw a "Vista moment at any time over the past year" declared HP CEO Mark Hurd in yesterday's earnings call. Think about what that means for HP, and what it means for Microsoft. As it turns out, it means essentially the same thing:

Microsoft's dominance of the PC industry may well be fading.

For Microsoft, this is a Very Bad Thing. For everyone else on the planet, it is a Very Good Thing.

Including HP. As CIO.com reports, HP's growth is increasingly coming from developing nations:

HP was happily announcing that revenue for its personal systems group has spiked to $10.1 billion; that's up 30 percent compared to fourth quarter a year ago. But that success sure isn't because businesses planned a Vista upgrade and refreshed systems at the same time.

On the contrary, Vista did not play into HP's sales uptick, Hurd declared. That uptick is all about sales in emerging markets including China, he says. In fact, HP says that revenue from Brazil, Russia, India and China increased 37 percent; it's now nearing 10 percent of HP's $104.3 billion in sales.

Think about that. These are markets that don't need Vista, that have no institutional memory of Windows (over the Mac or Linux). These are markets that are wide open for real competition (and real innovation).

Again, this is great news for every person on the planet...except Microsoft shareholders.

Matt Asay is general manager of the Americas and vice president of business development at Alfresco, and has nearly a decade of operational experience with commercial open source and regularly speaks and publishes on open-source business strategy. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.
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Add a Comment (Log in or register) 12 comments
markets that have no institutional memory of wind.
by dcardozo November 20, 2007 11:00 AM PST
Not so sure about this.
At least in Brazil, the decision makers know Windows as well as anyone in the States. They didn't pay for it, mostly they pirated it, yes, but they do know Windows.

What I'm seeing is that, when MS tries to avoid piracy, forcing the world to go legal, the population in these countries can't afford to pay for the OS, so it's beginning to try Linux.
Government and education sectors lead in trying to be completely legal, so they're the first with big migrations to Linux. After them, the private sector (mostly in fear of legal/financial troubles) is experimenting.

Once the kids are used to see Linux in the school desktop, and the parents are used to work with it at the office, they become confident to deploy it at home, even against the zero cost that the pirated Windows has to them.
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Kinda Confused?
by chustar November 20, 2007 11:12 AM PST
Why is Microsoft's failing seen as such a good thing? I might be missing something but i thought all software makers had something to offer? I mean, why should anyone be happy that a company is failing. If they killed anyone, then I'd be pleased they were going down, but if all they did was make software we don't like and other people do, what's the deal?
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If failure = greater choice, that is worth...
by Matt Asay November 20, 2007 11:26 AM PST
celebrating. I'd be equally happy to have Microsoft open up and treat its customers like equals (and, frankly, I think Microsoft is much better than most proprietary vendors in this department). So, it's not about beating Microsoft so much as it is about customers winning.

Customers win when there is more choice (within reason). They win when costs come down. They win when they, not the vendor, own their data.
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I'm sorry, but I still don't understand...
by chustar November 20, 2007 11:57 AM PST
Wow! I actually got a reply from the article author! Hello, up there! Anyway, how do proprietary companies own the data? Or do you mean stuff like drivers? Also, do you run Windows or Linux? (You don't have to answer that, you don't even have to answer to this post.) Thanks.
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Microsoft failure has nothing to do with choice
by MicroNix November 20, 2007 4:00 PM PST
The choice for alternative OSs have been around since MSDOS. The choice to buy a PC without Microsoft installed has always been around (maybe not from large vendors, but the option has always been there from some retailer).

The fact that Vista sucks doesn't mean Linux is going to get a boost. It means people will buy a blank system and throw their old XP disk in and use that. Chances are far greater that someone will install XP on their new machine than Linux if they choose to avoid Vista.

So while Microsoft takes it in the shorts for poor Vista sales, this in no way is going to break the dominance. Emerging countries like China sell Vista on the street corner for $1. Honestly, tell me if you lived there that you would install Linux over a $1 copy of Vista and lose out on all of the Windows software out there that is also being sold for $1 on the street corner?

I like your enthusiasm for Mac and Linux, but let's be real here...
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Free Ubuntu yes-$1 Windows XP-No
by tvphil November 21, 2007 5:57 PM PST
Please, lets get real. Free Linux, no viruses, spyware or malware, $1 Windows XP, all the viruses, spyware and malware you could ever want or stand. There isn't one task I would want to do on Windows over Linux. I prefer Open Office to MS Word, Firefox to IE any version, Evolution to Outlook, Kompozer to Front Page,Kdenlive to Windows Movie Maker(it even does HD editing for free)Totem to Windows Media Player. Ignorance isn't bli$$, if you ever tried any version (distro) of Linux, you would know what I'm talking about.
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I run a Mac...
by Matt Asay November 20, 2007 4:08 PM PST
...so I'm really locked in. :-)

But I store my data in OpenOffice and on the Alfresco content repository. Open source. Open standards. No lock-in.

And yes, people have always had choice, but let's be clear: when 95% of the market is eased into Windows, that's not real choice, and it impinges on the choices that everyone else makes. The kinds of OSes that apps support. The kind of browsers that web sites support.

We really are better off with even just a little bit of choice, because it forces application providers to not be lazy and to develop for more than Windows.
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Pre-alpha
by givmebackmymoney November 20, 2007 4:46 PM PST
Vista seems to work like pre-alpha software, but we were charged the gold release price. Did people like Steve Ballmer think that the general public was stupid? The market is only reacting to a bad product.
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When you say we?
by chustar November 20, 2007 7:42 PM PST
When you say we do mean you also paid for vista? Don't worry, though, Vista sp1 would bring it up to at least beta level. :)
Also, how much computer experience does Ballamer have? I know Bill Gates had a lot, but I don't know about Ballamer.
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market share
by zflorio November 21, 2007 7:36 PM PST
what is the market share for microsoft versus linux versus mac?
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XP Pro I miss you already.
by poopster November 21, 2007 8:57 PM PST
I recently upgraded to Vista at work. I heard the various complaints from users on various forums debating issues of compatability, copy file issues etc. But like most versions of windows up to XP, I never ever encountered any of these problems. Usually it was a few highly sensitive people or those who just loved to hate Microsoft. In XP Pro there were small little issues, but for the most part it was rock solid and kept improving with service packs. So like XP I figured Vista issue were few and minimal. Then came reality.

Only 20 minutes into setting up my shiny new Vista system did I start noticing some very annoying issues. First, I had issues with Samba network drive connectivity, but I was able to resolve that problem. Ok. Then I find out the version of Outlook XP (2002) cannot keep saved passwords for accounts. I encountered this after having to re-enter my password every dam time I strated upo Outlook. I find out later that this is a known issue with Outlook 2002 you will have to upgrade to Office 2003 or higher. Ok.

The lastest issue was one that supirsed me the most. I had heard from various users about the copy files issue with Vista. That it was slow, that copying a slew of directories from one location to another did not work so well, and that the speed was terrible. Surely this was an issue to a few users. Right? Wrong. I finally understood what users were complaining about. If you have Vista, try copying a bunch of files to another network drive, or try copying some directories with new files over to another location containing directories with the same name. Ugh.

The sad thing is that MS was closing in on perfection with XP Pro. It was such a successful merge of stable NT core with the plug and play simplicity of 98. So what the hell is up with Vista?

I will say, I think some of the faults in Vista are attributed to the whole Linux/nix world nagging at MS about building more security into windows. The irony is that soem of the security alerts and prompts get so damn annoying. Please MS whatever you do dont listen to the Linux world in regards to building functional usability, especially in regards to the file system. Sure disable features that dont need to be on by default, but chill on all the damn prompts and the "supposed auto tuning etc". I hope the next Service pack fixes some of these issues because Im already about to re-install XP Pro.
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About The Open Road

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to the Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is general manager of the Americas division and vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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