If you haven't heard the news by now... well, go read DailyTech and Arstechnica. The jist of the news reports is that major big name clients of Microsoft have decided to pass on buying Vista licenses. The justification given by types like General Motors is that they have no intent to upgrade their current hardware infrastructure for another 3 or 4 years. General Motors figures that by the time they are ready to upgrade their hardware infrastructure the next version of Windows will be available... or will it?
See, the thing is, I'm not convinced that Microsoft will actually SHIP Windows 7. I make that statement with several considerations in mind. For example, Microsoft recently announced they had passed the 140 million mark of Vista sales, a number that I went on the HardOCP forums and contested. I wrote about in this blog before that when Microsoft was claiming over 30 million sales / installs of Vista, I couldn't reconcile that number with reports from major OEM's and ODM's moving Vista software. Rather, on my own independent analysis, I could barely account for maybe 10million... if that. When Microsoft was claiming 50million, again, the sale evidence wasn't there. When Microsoft filed for taxes and gave shareholder reports? There was no evidence of Vista having managed anywhere near the numbers Microsoft had publicized. I also came to the conclusion last year back in November that Microsoft was already known for fudging numbers on almost all it's high profile products, specifically listing Microsoft having to go back and restate Xbox numbers several years in a row that placed the console behind the Nintendo Gamecube in sales. Given Microsoft's accounting history, the likelihood of Microsoft surpassing 140 million units of Vista... isn't just doubtable, I think they are outright lying.
Another consideration is backwards compatibility, a point I brought up on MepisLovers. The claim here focused on rehashing the compatibility problems in trying to manage NT5 and NT6 applications. Last year I went over a technically viable method by which Microsoft could offer native Operating System compatibility for legacy applications, and provide a brand new Operating System experience and configuration.
Much of the industry if fairly certain that Microsoft intends to sell Windows 7 in modules, basically expanding the artificial segmentation featured in Vista to ludicrous levels of functionality separation. While the separation of Windows 7 into various modules might not mean much to the average computer buyer, corporate accounts and large systems maintainers could find themselves nickel and dime'd to death on hidden costs. There's a very good possibility that Microsoft could attempt to ship Windows 7 without NT5 or NT6 compatibility, making compatibility an upgradeable option.
Such a maneuver won't go over well with any consumers. Large corporations that have not yet figured out that Open-Licensed software is a much more profitable, generally cheaper, more intrusion and exploit secure, more secure in a legal sense, and will can be self maintained by existing coders... Will probably find themselves examining why they haven't stopped paying Microsoft Tax.
Microsoft finds itself in a rather, well, for me, interesting position. I'm sure that Microsoft themselves do not find the position interesting at all. That is the position of being a victim of their own success. Too many clients and users are too satisfied with Microsoft's year 2000 offering. NT5 does everything computer users want it to do, quite competently. Aside from security concerns of intrusion and exploits, there isn't much in Microsoft's arsenal to convince clients they must absolutely upgrade.
If Vista is doing as badly as the independent market research shows, Microsoft could very well be in a position where it could be neutralized as a market player. It is entirely possible that the collapse of the Microsoft Tax could mean the collapse of Microsoft itself, as the Microsoft Tax is almost the only profitable business model Microsoft maintains.
Microsoft is also in the position that even if Windows 7 lives up to the promises of being leaner than Vista, easier to use, and better as an operating system, they could still fall to consumers and clients who have realized they don't have to pay the Microsoft Tax. Granted, given that Microsoft's entire coding history makes the concept of Windows 7 being leaner and easier to use a ludicrous concept in and of itself, the possibility is there for such an event to occur.
Now, I'm not stupid enough to claim that Microsoft is already finished... or dead. They have far too much socked away for an outright death of the company. Granted, had Microsoft pursued the deal with Yahoo, financial death would be a possibility, but that event did not occur.
Rather, I see Microsoft possibly having to continue NT5 development, as well as finding a new business model based in services, in order to maintain themselves as a company.