I may have lost a few of you with the headline and you're already deciding to tell me that I'm just plain wrong by even suggesting Microsoft is OK with Vista failing, but hear me out. I'm not going to make the case that Vista has failed--if you look at sales figures, I think it's safe to say that while it isn't the most celebrated OS Microsoft has released, it still has done relatively well--and I won't even make the case that Vista should fail.
Instead, I've had this inkling for the past year based on what I've seen come out of the Microsoft camp that the company is fine with the poor Vista PR and doesn't really care that most businesses are loath to switch from XP.coming from the top echelons of the company telling us exactly why Windows 7 will be the greatest version of Windows Microsoft has ever released, it's becoming abundantly clear that Microsoft just doesn't care that Vista is facing such pressure.
But Microsoft's neglect of Vista. I think Microsoft is perfectly fine with the way things have developed in the industry and its desire to prove the value of Vista was barely a concern once the company released the operating system.
Sure, it's releasing commercials now in an attempt to fight back against Apple, but have you noticed that none of the commercials gives viewers a reason to use Vista itself? The company is quick to point out why you should own a PC, but when it comes to Vista, it's as if the operating system shouldn't be mentioned.
I should point out that there is no way to prove my theory. Microsoft constantly tells journalists that Vista is perfectly fine and it's hitting all the sales benchmarks it laid out in the beginning and that it's proud of the operating system it built. I don't doubt either point. I just think that to push the company's strategy forward and put itself back on the tech map, the company felt Vista could be the single product that would make it take some bumps in the short term, but push Microsoft's agenda forward over the long term.
Build low expectations
When Microsoft released Vista, it knew that it was offering an operating system that didn't have the chutzpah to compete on the same level as XP or Mac OS X. The company knew that with a few more months of development, it could fix the major issues facing the OS, like compatibility problems and the UAC. And yet, knowing that all too well, Microsoft pushed the OS out the door.
Some say that Microsoft's haste was due to Gates' and Ballmer's desire to stop the delays and start realizing a return on the company's investment. Others say that Microsoft was mostly unaware of the issues plaguing the OS.
I think it was all part of the plan.
See, with a less-than ideal operating system on the market that Microsoft knew would be relatively successful no matter what, Ballmer found a way to push his agenda forward. He knew that he wanted the extra cash to funnel into online endeavors and was fully aware that Microsoft's control over the hardware vendors made it practically impossible for Vista to not be a success. And although the company might feel some backlash because of the issues the OS faces, maybe Microsoft brass felt that it was a cost of doing business and it didn't matter: the money would still filter in because the world needed Vista more than Vista needed the world.
Anyone who follows Microsoft's stock knows all too well that it doesn't move. No matter how well the company performs, one share usually hovers in the $20 to $30 range. That's fine for a company that has a stable financial structure and a relatively happy group of shareholders, but it's a real pain when a company wants to shift its focus in another direction.
In essence, Microsoft is a victim of its own success. Shareholders have hitched their retirements to the company because of the success of Windows and Office, and they expect that success to continue on the software front. But if Ballmer has shown us anything over the past few months, Microsoft's focus is slowly but surely moving away from software and toward the online space where Google is beating its brains in.
Should we forget that through Vista's growing pains, Microsoft spent $6 billion on Aquantive, a relatively unknown online advertising firm? Or should we forget that Microsoft even though some were calling on the company to address Windows issues?
According to Ballmer last year in an interview with the Times Online, Microsoft's foray into the online world "proves his commitment" to advertising.
"We're going to keep coming and coming," he said in an interview. "I think everybody would like to see--in advertising and search--Google get some competition."
And perhaps most importantly, Microsoft's chief said last year that focusing on advertising "gives us the chance to surprise shareholders."
But how willing to be surprised are shareholders? With an extremely popular Vista that didn't face many issues, I'd say that shareholders would rebel against Microsoft's desire to move online and compete in an environment that's extremely difficult to be successful in. But now that Vista has faced so many issues and Microsoft went out of its way to tell the world that and explain why Windows 7 is right for us, maybe Microsoft's desire all along was to use Vista as a means to downplay the significance of its OS to get the green light for its online endeavors.
I'm sure some would say that neither success in its software business nor its online business are mutually exclusive, but I have to disagree. Shareholders invest in Microsoft for its software and all the extras are a bonus. And if you look at Microsoft's success (or lack thereof) online over the past few years, it's abundantly clear that when the company's execs focus their attention online, it's to the detriment of software and while they were focusing all their attention on software a few years ago, it was to the detriment of the online business.
Maybe Vista really is as bad as critics want to say and Microsoft is extremely unhappy with the way it turned out. But if we consider the rhetoric coming from the company's execs about how wonderful Windows 7 will be and how Microsoft can be the next big thing online, the company's attitude doesn't reflect that.
I think Vista's troubles may have been the key to Microsoft's strategy. By having critics highlight those flaws, the company could make the case to shareholders that it needs to spend bundles of cash to expand online (thus furthering Ballmer's agenda), while not risking too much: it's still maintaining strong profits each month regardless of Vista troubles.
Call it what you will, but if you ask me, I think Vista was a perfectly drafted mistake on the part of Microsoft to give executives some breathing room to change the focus of the company. Sure, Windows is still an integral part of its business model and nothing can change that, but for the first time in its storied history, Microsoft is using an operating system's troubles to shift its focus from software to the Web.
Will it work? Time will tell. But for Ballmer's sake, it better.