Vista will have a broad-based launch soon. Unlike the launch of Windows XP and Windows 95, buyers won't be lining up outside stores to get the first copies. Vista is late, and Vista benefits are uncertain. This uncertainty was not helped by Microsoft's longstanding and widely publicized fascination with DRM – the benefits of which were seen by customers as ranging between dubious and toxic.
The other recent Microsoft product launch – the Zune – did not add to Microsoft's momentum. Zune is a geeky, awkward device that adds DRM to your own rips. It is promoted by an ad campaign with an obscure and awkward strap line that feels like something out of a “your brain on drugs” ad. And then there is the “squirting.” Oh, the squirting.
With all the bad news about Microsoft, you might be shocked to find statistics that say that 90% of the installed base of PCs are running various versions of Windows.
One can argue that the number is flawed. But the numbers that all add up to around 90% come from various sources, with diverse methodologies, such as retail sales and Web-site visitors. So 90% can't be attacked as a static measure, or one that is skewed by showing only one kind of computer user.
Another measure that suggests a near-monoculture of Windows is that viruses and spyware are almost exclusively targeted at Windows. Or, look at a catalog: Even the catalog of a “hobbyist-friendly” outfit like Micro Center has, maybe, 3% of desktop PCs with Linux. The rest run Windows. 0% of laptops come with Linux installed.
All indications are that personal computing still at the very narrow end of the wedge of restoring diversity in end-user operating systems. This is a movement that could be crushed or turned back. It certainly has not become strong enough that it is certain to survive.
However, when change comes, it will be sudden. Either Linux will be banned as too subversive for society, law enforcement, and content publishers to tolerate outside of Web servers and embedded applications, or Windows will precipitously fall from its position of near monopoly in the installed base of client operating systems, driven into retreat by the polish of Apple's MacOS and the freedom and democracy of open source.
The reason that change will be abrupt is that the Windows monopoly is brittle. It is brittle because it is based on hegemony in licensing to manufacturers, and on taking the content publishers' side in promoting DRM even as publishers become more strident, restrictive, rent-seeking, and litigious in their view of how content can be used by consumers.
This isn't the road to general popularity, much less is it the way to keep opinion leaders on your side. Any customer that is smart enough to be aware that their computer is going to rat them out to content publishers (and who knows who else) resents it. While most consumers are unaware or apathetic, opinion leaders are almost uniformly against DRM. Microsoft failed to grasp early opportunities to show DRM could be used to secure users' documents against misuse. That might have shifted the argument to something closer to a balance, but as it is, DRM is purely a source of resentment, without identifiable benefits.
Microsoft also appears to have a tin ear for the resentment against DRM. Apple is praised for pushing DRM mostly out of sight, while Microsoft is in the news for completely embracing DRM to the extent it is fundamentally changing the nature of a personal computer from a machine the user controls completely to one that is outfitted for surveillance and control by publishers (and who knows who else).
But all that does not mean that the Forces of Good will triumph. It does mean that the conflict over free and open software will be sharp and full of rhetoric about how free and open software is the tool of drug kingpins, terrorists, and pornographers. This rhetoric, and laws that make general purpose computing and communication tools contraband, will be used against free and open software. It will be used to hang the threat of liability over computer makers in order to maintain license hegemony.
Is Microsoft's share price stagnation and Microsoft's position for DRM linked? Before answering that, let's also ask if there was a different corporate culture at Microsoft when it was in ascendancy.
Microsoft's success was based on providing an inexpensive, off-the-shelf computing system that was good enough to replace many expensive minicomputer and mainframe systems that held customers hostage to high maintenance fees charged by hardware and software vendors. For those who could not afford minicomputers, Microsoft's software used to be the tool the little guy could use to level the playing field.
When Microsoft was on the way up, they were breaking eggs and making omelets. They were making other companies' products obsolete, and delivering high value, and driving companies like Wang, Digital, and Data General out of business. Now they are in the business of preventing the RIAA and MPAA dinosaurs from shuffling off to the tar pits, preventing corporate computer users from doing anything their IT department does not approve of, and preventing you from knowing everything going on inside your computer. That is, Microsoft has gone from selling creative destruction, to preserving obsolete business models, corporate IT controls, and facilitating content publishers' and others' intrusions into your use of information.
Does this mean Microsoft is doomed? No. Microsoft has thriving businesses in appliance devices like mobile handset software and game consoles where customers do not expect – yet, anyway – to have full control over the device. Microsoft's Office Communications Server is a dagger at the heart of the PBX business, and very much fits the model of the ascendant Microsoft. These parts of Microsoft will grow rapidly in the coming years.
It does mean Microsoft is in a vulnerable position on the consumer desktop. Like GM that can't compete with BMW quality or Hyundai price, Microsoft Windows is becoming a product only for those that don't care about having something better: Apple will be the choice of customers that can afford Apple, and Linux will be choice of those that value a true personal computing experience. Microsoft will be left with the sort of people who still buy Buicks. On top of that, depending on the extent to which DRM becomes visible to end-users of Vista, Windows will also become a product for people who don't care about not having Big Brother Inside. That may sound like an extreme comparison, but there was just recently a time when it seemed like GM could go on selling Buicks forever, too.
To really turn itself around and gain a path to new growth, Microsoft has to say no to the content publishers and say yes to end-users' concerns about privacy and control over computers and content they buy. But I don't expect Microsoft to do that until the message is written in declining market share and further stagnation of the company's value.