New Windows opens to a changed IT world

Certain tribes of American Indians, particularly the Kwakwaka’wakw in the North-west, once rejoiced in a ritual called potlatch. At its extreme, it involved the organised destruction of a person’s most valuable possessions, perversely to demonstrate that person’s wealth.

Expect an imminent explosion of corporate potlatch, emanating from Redmond, Washington – global headquarters of Microsoft.

For this week Microsoft launches its much heralded successor to Windows XP, called Vista. Whatever its shortcomings this much is certain: it will trigger a mini-boom in the IT sector, with ramifications for the global economy; not dissimilar, in fact, to the quadrennial effect, or the Millennium Bug.

Why? Because about 97% of the world’s PCs ultimately depend upon Windows to power their software. Vista is a must-have that immediately makes obsolete not only existing software but the machines on which it runs. Hence the potlatch referred to, as the world’s leading corporations make their way to the local landfill site to dump their massive inventories of what, to the untutored eye, look like perfectly adequate computers.

Never mind that hackers will soon make mincemeat of Microsoft’s boastful claims about Vista’s invulnerability. Or that Apple has already achieved much of the functionality of Vista in its Tiger version of OS X; or that the forthcoming Leopard will trump it. Apple, after all, is a mere 3% of the PC market.

It is part of Microsoft’s “awesome” market power that things like not being at the forefront of innovation don’t seem to matter very much. But not for very much longer. There are good reasons for supposing that the launch of Vista marks the last occasion on which the software juggernaut will steamroller the world’s IT sector in this way.

In the first place, there is evidence that Microsoft, after 25 years of undisputed leadership, has lost some of its momentum. The serial headaches involved in developing Vista have in themselves been a distraction, but not quite so large a one as the time inevitably wasted by Microsoft’s top executives, Gates and Ballmer, fighting the regulators on two fronts: in the US and Europe. Moreover, as Gates the founder and strategist gradually recedes from the business, unavoidable questions are being raised about Microsoft’s grasp on the future.

This is critical because, in the five years since Vista was conceived, the IT world has become a very different place, replete with new challenges.

Open-source software, such as that pioneered by IBM and Linux is one issue, but more important still is the increasingly problematic future of the “intelligent” PC on which Microsoft has traditionally built its success. As the Google intelligent server model makes its mark, people are beginning to wonder whether Vista isn’t a case of a refined superdreadnought surviving into the era of the aircraft carrier.

Ballmer admitted as much this week, stressing that the company would now be devoting a lot more attention to “advertising-funded models” (for which read Google). As he pointed out, Microsoft has been no slouch in this area: it’s number three seller of internet advertising in the world. But three, as they say, is threatened, and certainly a very long way from unchallengeable leadership.

Nor is Google Microsoft’s only worry. Although it has latched onto the ambitious strategy of convergence, results so far have been mixed. X-box, after a slow start, has been a remarkable success and now offers a promising window into, for example, trendy IPTV. But what of the mobile platform? And how come Microsoft has been beaten to the draw by Apple, over iTunes, MP3s and – most likely – the iPhone?

The world of consumer IT has now become a much more threatening, pluralist place for the software monolith.

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