Summary: Slowly but surely, Free software breaks Windows and other Microsoft platforms by lowering their market value and thus hurting Microsoft's cashflow
ONE of our sceptical readers has raised an important matter in IRC yesterday. By looking back at some numbers he claims to have found more proof that Vista 7 does not succeed in the marketplace, contrary to these ludicrous claims that "Windows 7 might be a massive commercial success" (utter BS from Engadget, no offence intended). We'll get to the pertinent details in a moment, not before pointing out that our informant from Sweden, Mikko, claims based on this article that "[S]ilverlight on the web is dead [...] Ballmer states that Silverlight is now pretty much strictly a client, non-cross platform thing, while explicitly stating that when it comes to doing something universal, "the world's gone HTML5"." So, we were right about Silverlight all along [1, 2, 3, 4], but that's a separate story.
Mikko says he "thinks that there's only bad journalism on
Engadget" and
we too wrote about the subject. Microsoft even
gave this publication an expensive new laptop with Vista 7 (pre-beta) preinstalled so that it can praise Vista 7 before anyone else gets to see it. It's an exercise of PR.
Windows undoubtedly has a margins problem. Mainstream publications that we cited recently say it clearly as it's not hard to see. And looking at the source our reader cites, there is
this MSFT analysis (Q1 of 2010) and
one particular image that says it all. It's all big minuses for Microsoft's cash cows too.
Our reader responded by saying: "Record numbers of sales but 52% decline in income? Wow!
"If Microsoft's sales have been flat of declining, it is no wonder they have gone from virtual dominance to 68% of all units today. 68% is a Vista 7 channel stuffing number, and the actual number is probably greater than that. That is, more than 32% of desktop computers are shipped without Windows..."
As we have shown before,
Windows profits declined over the years. Profit fell by more than half based on the above, but income aside, revenue is down 39% too for Windows. That's pretty shocking unless there's a snag to be taken into account.
Our reader summarised by saying that "you can't see the reports, sadly but the SEC will serve them to you... I was more interested in finding the number of licenses Microsoft has sold as a fraction of world PC shipments. Both are slippery numbers, with IDC providing most of the published PC shipment figures to Microsoft boosters and few hits on license numbers." GNU/Linux is
one cause of the stated declines. Microsoft is
forced to lower prices to remain competitive. This may help explain the FUD attacks we've been seeing recently. One talking point is about GNU/Linux being "fragmented", which is basically a negative word for "diverse". ""Fragmented" is a proprietary spectacles view," explained Groklaw some days ago in relation to Android, and "[p]eople say that about GNU/Linux too. But what they miss is this: you can do whatever you want. That is a wonderful feeling, and it leads to superfast development, not to mention a lot of fun."
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Comments
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2010-10-29 03:44:37
Sounds great, right? Not when compared to 2009 [2], the tail end of Vista failure. In 2009, the company had income of about 7 billion. So, there is little change from where Vista left them in 2009. In fact, the company is probably worse off because they managed to channel stuff 240 million Vista 7 licenses recently. Not much should be expected beyond that spurt.
Predictably, Microsoft bills the deferral roller coaster as explosive growth. In this article, for example, claims "During Q1 FY10, before Windows 7 was released..." which is not true. Microsoft was already selling licenses for the new OS and had channel stuffed enough of them to cause a big dip when the revenue was "deferred". A year later, we have some more channel stuffing billed as actual sales to make an apparent rise. The two year numbers tell the story more clearly but Microsoft boosters pretend to be unable to remember the numbers. Goldfish might do better.
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2010-10-29 12:59:01
TemporalBeing
2010-10-26 17:12:59
Back when Windows 9x/Me was released, an upgrade cost $90USD, and the full version (everything!) was $199 at most. WinXP increased that slightly; I think upgrades were $120-130 range, but the full version (Pro) was still only about $199. With Vista, Microsoft more than doubled the cost. All of a sudden upgrades were $199, and the full version was $399! An inflated value that they kept for Win7, only they added the Family Pack (3-5 licenses) for a little more than that $199 upgrade price. Still, not really much of a deal.
At least with Office they were smart enough not to change the price too significantly; but it's still pricey; and Microsoft relies Office to drive sales of Windows. So as people and organizations have started moving off of Office, they now find themselves able to move off of Windows as well, or at least in a better position to do so.
So, I expect that we are at the beginning of the exponential curve downwards of ousting Microsoft from the PC business. The same wave that pushed them to market dominance is now going to crush them.
Dr. Roy Schestowitz
2010-10-26 17:28:11
lightpriest
2010-10-26 09:20:02
On Windows, you cannot replace the "Explorer" (shell), you cannot replace "Gena" (the login manager), but still - there are 4 major versions of Windows splitted amongst different SPs and each with its own problems/bugs. Different MSOffice versions sometimes don't match each other making documents look funny. Different IIS versions have weird bugs, not to mention performance issues. Some laptop OEMs build drivers only for Vista/7, making it impossible to use XP with that laptop.
If anything's true about fragmentation is that every software has it. MS users suffer more from it. If you have a problem with a certain version of Windows you either need to pay for an upgrade, which breaks other stuff, wait for the company to build a fixed version or don't use the feature you wanted at all. If that same problem occures on Linux, at worst you chroot.
Fragmentation on Linux is an advantage, it was created that way. Fragmentation on Windows is how they do business.
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2010-10-27 13:36:21
It is better to talk about the fundamental issues of software freedom which clear the air quickly. More freedom and fewer restrictions are obviously better for everyone. "Fragmentation" does not exist where people are free to share. Most other software problems boil down to people being uncooperative and abusive towards their neighbors.
Dr. Roy Schestowitz
2010-10-27 13:41:36
twitter
2010-10-30 05:46:01
twitter
2010-10-30 18:47:55
Poor Steve Ballmer only got a $670,000 bonus because results were so bad and even people at Information Week realize that Microsoft might not be around in five years.
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2010-10-30 18:53:44
Dr. Roy Schestowitz
2010-10-30 19:36:05