Microsoft, as expected, is going to implement a policy to only allow legitimate copies of Windows to receive updates. The only exception appears to be security patches. Obviously the goal is to reduce pirated Windows installations floating around the world. According to the article, an estimated third of Windows installations worldwide are pirated. My guess is more than half of those are in China, the land where intellectual property means nothing unless the government owns it. What is interesting about this is that Microsoft is exposing their outdated business model.
Lazar declined to say how much Microsoft hopes to cut into the piracy rate with the Windows Genuine push. However, he said the company does see a need to create a clearer distinction between genuinely purchased and bogus copies of the OS.
"One of ways we are going to do that is by enhancing the value of genuine Windows," he said.
As part of that, Microsoft is adding a few more freebies to the "carrots" it gives to those whose Windows copies pass muster.
Microsoft is indirectly admitting there is not enough value in their current distribution of Windows to entice pirates to go legit. Technically speaking, Microsoft can do whatever they want whenever they want with Windows. They can charge anything for it. Similar to the way they trying to force businesses to upgrade more often, they are trying to force consumers into buying more licenses. From the same article:
With Windows' share of the desktop market estimated to be well above 90 percent, cracking down on illegal copies of the OS is seen as one of the few ways for Microsoft to grow its Windows business. The two other main ways that Microsoft has identified are increasing the number of PCs per household and expanding computer usage in emerging markets.
Modern business is analyzed to death. Every company has a business model and that model is used and re-used until the company reaches a plateau. Microsoft is at their plateau right now; they are looking for any way to show increases from quarter to quarter as they lose sight of the big picture.
This mentality exists in other industries. For example, big banks that increase market share by purchasing smaller banks year after year eventually stop buying. The big bank has no choice but to force branch managers to increase market share with unrealistic expectations. It's no wonder that branch banking employee turnover is increasing. Banks are struggling with customer service and image problems. Decision makers are so focused on counting beans even when customers are telling them what they want. The business model is failing them.
Back at Microsoft, they are like the big bank with all the small banks aquired they can afford. Microsoft has an image problem, software quality issues, and a host of legal issues within the U.S. and Europe. Their business model is not increasing market share since they reasonably can't get any more. Yes, Microsoft is entitled to protect their intellectual property. However, what is the PR cost of locking down Windows updates? Microsoft continually sacrifices long-term image for short-term income. They are hanging their hat on Longhorn (now called Vista), but it's the same old model with a new name.
There are some things Microsoft could do today that would help them out tremendously. For instance, how about lowering the price of Windows XP Home and allowing home users to have three installations? Or what about making an effort to appear less Draconian when it comes to public relations? Or how about playing nice with the technology community and stop trying to control everything?
In the long-term, Microsoft needs to quit milking Windows and Office upgrades for all they are worth. It's like Paramount trying to wring every penny they could out of the Star Trek franchise in the face of diminishing returns. It's time for some unconventional thinking and some new products and technologies for Microsoft or they are destined to become archaic as their innovation grinds to a halt because a room full of bean counters wants to get more money from four-year-old products.
Popularity: 1% [?]
Long Way From Home by The Heavy