This summer has seen a number of little erosions of Microsoft's power in the market which -- when taken together -- show the tide turning in a serious way against the evil empire. And the decline may come quicker than people expect. Redmond is definitely on the defensive.
It started with the failed launch of the new operating system Vista. With strong resistance from business buyers and lackluster interest from consumers, Microsoft knew in late 2007 that it had a dud on its hands. But the news has gone from bad to worse.
Instead of accelerating new PC shipments (as previous new versions of the OS had done), Vista is slowing them down, upsetting PC makers who are already reeling from brutal price competition and a slowing economy. So Microsoft took a hard line: from 30 June this year no one is allowed to ship a PC with XP installed. That pushed PC makers too far, so they are getting creative:
- It is widely known that resellers are offering to downgrade customers to XP at little or no cost. According to InfoWorld, some 35% of business users are ripping out Vista from their new PCs. As a result, Vista is on less than 15% of desktops, and even that number is likely to be overstated as it is based on shipments.
- For months now HP has been shipping PCs with a Vista Business Licence (as it has to), but with XP pre-loaded so that customers can downgrade themselves.
- The Wall Street Journal published a lengthy report yesterday [sorry, registration may be required] about how PC makers are adding proprietary software to PCs that mask Vista's more annoying features and make it faster and easier to use. Dell added a 'Dock' that looks suspiciously like the Mac Dock we know and love. HP has developed its own interface that sits on top of Vista for managing digital media on its new line of touch-screen PCs. Sony is doing the same, giving consumers a choice of three types of 'desktop' (business, home, etc) which remove much of Vista's clutter.
- New Linux-based desktop PCs are gaining ground beyond the geek market, though still a tiny 2% of the overall market, or less. But look at the $350 EeePC from Asutek, with others to follow.
Microsoft's share of browsers is slipping, down to 58% (off 7 points) from last year. In general, Microsoft appears to be getting very defensive about its Internet presence: the failed talks with Yahoo, the acquisition of Greenfield Online announced today (which will give it access to a wealth of consumer data and research panels). The beta version of Explorer 8, its latest browser incarnation, is said to include a Private Browsing setting which will block ads being served by arch-enemy Google, among others.
Microsoft is suffering the indignity of people buying powerful Windows Mobile devices and then using software from vendors like Kinoma to 'improve on' the user interface. For $30 any consumer can enable Kinoma to take over the multimedia functions of a phone or PDA running Windows Mobile and make the entire menu structure disappear, to be replaced by intuitive touch-based navigation very similar to an iPhone. Ouch!
Slow death by a thousand cuts?