FRIDAY IN FOCUS
Hasta la Vista for Microsoft?
07-04-2006
by Ciara O'Brien
Dogged by security flaws and product delays, could Microsoft's dominance be tested in 2006?
It's been a tough couple of months for Microsoft. Not only has it been hit with a number of security flaws, but now it is facing delays in the release of its new operating system and productivity software -- delays that could put it a competitive disadvantage.
Instead of a 2006 release for Vista as the company had originally planned, it is now believed that the consumer versions of its operating system won't hit the market until January 2007.
The news has caused various grumblings in the tech industry, and caused market researcher IDC to slash this year's PC sales forecast for the US by 2 percent. In addition, postings have appeared on blogs calling for Microsoft boss Steve Ballmer to resign and suggestions abound that the firm is experiencing internal chaos.
To be sure, this is not the first delay to hit Vista -- originally known as the client version of Longhorn, the industry had been predicting the system would hit the market in 2005. Microsoft has already scaled back Vista, from its original ambitious plans, in order to get it out on time, including dropping the idea of including a revamped file system, WinFS.
Vista will be the first time in five years that the company has updated its operating system. The last update was Windows XP, which was released in 2001.
In contrast, rival Apple has managed to put out a number of new versions of its Mac operating system, as well as adopting new features that Microsoft has yet to incorporate into its OS.
A lot of speculation has surrounded the exact reason for the Vista hold-up. Reports have blamed the delay completing certain features, including security functions -- an important consideration for Microsoft. However, the tech giant has been quick to scotch those rumours.
Mike Hughes, Microsoft Ireland, said that Vista is ready on time -- it's simply a matter of getting the code to equipment manufacturers for testing.
"We will still be able to deliver Vista on schedule," he said, adding that the so-called delay was because original equipment manufacturers (OEMs) and system builders needed to run compatibility tests on Vista. "They would need a certain lead time."
The difference between the business version and the consumer version is that the business users will be installing it on existing machines, whereas consumers will need to wait for the manufacturers to release Vista on new machines.
The news that Vista won't be available to consumers until next year will certainly come as somewhat of a blow for PC manufacturers. While the hold-up is only a matter of weeks, it means that Vista will miss the all-important Christmas market something that could cost the firm as much as USD500 million and worse, cost the PC industry as much as USD4 billion in lost holiday sales.
Perhaps more seriously for Microsoft, the delay could afford rival Apple ample opportunity to gain ground on Microsoft in the consumer PC market. With a new range of laptops and desktop machines powered by Intel processors, it could be that Apple is about to convert a new generation of computer users to the Mac.
Add to that the security aspects -- there are far fewer viruses aimed at the Apple OS than target Microsoft systems -- and there could be trouble ahead for Microsoft.
However, Microsoft doesn't appear to be overly concerned at the prospect. Hughes says that if potential buyers really want a Vista PC, they will wait to purchase one rather than being tempted by a completely different system. Instead, he believes the choice consumers will be faced with is whether to buy a machine before Christmas and upgrade to Vista, or delay their purchase until January.
It seems that the Office suite of products isn't faring too much better. The decision was also taken recently to delay the release of its updated 2007 productivity suite until January, coinciding with the release of Vista -- yet another blow to Microsoft. The Office suite makes up a sizable proportion of Microsoft's revenue.
And Microsoft's woes don't end there. The company has also had some recent run-ins with the European Commission over its plans for Vista. The company was warned in March by anti-trust commissioner Neelie Kroes that unless Vista conformed to European competition laws, it would not be permitted to be sold in the region.
Reservations have already been voiced by IBM, Sun Microsystems and Oracle, who were concerned that Microsoft would add digital rights management to the software to prevent documents created using the Microsoft products from being opened by competitors' software.
As it struggles to control some of the issues hampering its growth, Microsoft last week announced somewhat of a shake-up in the division responsible for its Windows operating system, ostensibly to improve its online strategy.
The Windows operating system and Windows Live group is now to be headed up by Steven Sinofsky, who is responsible for the development of some of Microsoft's Office business products, and more crucially perhaps, has a reputation for delivering products on time.
But will this move be enough? A lot depends on Microsoft's new operating system and office software suite; the firm's growth has remained stagnant for the past few years as the market awaits Vista. Certainly, the firm could do without the embarrassment of these latest delays.
Looks like it could be a challenging year ahead for the software giant.
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