April 21, 2006

Software Brief: Microsoft Vista too late?

Much has been made of Vista being delayed and now we have Boot Camp from Apple so we can run XP on imacs. Vista will come in 6 different flavors though not sure if that includes all of the embedded variants (CE, WiPOS, etc), which will impact self-service and POS. Nice comprehensive article on outlook for Vista rom newsfactor. Is it too late? Has Microsoft finally lost the monopoly of Windows?

Microsoft's Worst Nightmare

Mark Long, newsfactor.com

Few events in the technology sector generate more scrutiny than the release of a new operating system from Microsoft. The world's biggest software company had planned on releasing the next version of its flagship product, which runs nearly 90 percent of the world's computers, in time for the holiday season. But when Microsoft announced in March that its new Windows OS, Vista, would be delayed until January 2007, some observers smelled blood in the water.

The delay is only the latest roadblock for the first new OS from Microsoft in five years. Vista's development has been marked by setbacks, including scrapping the data-driven system that was the hallmark of "Longhorn," the project's former code name.

Meanwhile, Microsoft's competitors have been busy. Apple recently released Boot Camp, software that enables its Intel-powered machines to run Windows XP, giving customers a choice of OS on the same computer. While the release of Boot Camp in and of itself shouldn't affect Microsoft's market share (it might even sell more copies of XP), it could draw people to the Mac platform, where they could eventually abandon MS altogether. What's more, now that Macs can run XP, speculation continues that Apple's OS X will someday run on PCs built for Windows.

There is also the question of which company offers the better operating system. Apple has made accessibility, security, and cool graphical touches its stock in trade, and Microsoft has placed much emphasis on these features for Vista. On the open-source front, Linux on the desktop has advanced by leaps and bounds, garnering praise for stability, flexibility, and a user-friendly interface.

Is the venerable Windows OS finally vulnerable in the market it has dominated for years?

You bet, said Louis Suarez-Potts, community manager of OpenOffice, a free, open-source office suite. The longer the delay on Vista, he said, the bigger the opportunity for vendors of OS alternatives. But the greater issue, he said, is that the delay affords the opportunity to evaluate not just OS alternatives, but also strategies. "Does one really need, in practice, the overhead Vista will demand?"

'A Scary Proposition'

For its part, Microsoft says that the extra time is necessary to ensure quality, and that business versions of Vista will be available in November of this year. In fact, Microsoft is planning to offer Vista in six versions. Only the higher-end iterations will feature the snazzy new "glass" interface, however, and some business versions will require a subscription to Microsoft's Software Assurance service.

This tiered approach has some people wondering if it's all just too much to keep track of. Others have predicted that consumers and businesses using older machines won't even bother to upgrade because these PCs won't be able to support the more-advanced features of Vista.

"Microsoft has lost the monopoly logic that made it the most powerful and richest software company in the world," Suarez-Potts said. "I don't think an eventual Vista -- perhaps better named 'RearView' -- will help; it's already a lost cause."

However, not everyone is convinced that Redmond will suffer. "Microsoft may be more vulnerable than it's been in the last 10 years, but I don't think it is going to lose to an open-source alternative, because I don't see any other cohesive capability to match them," said Jim Murphy, a director at the advisory firm AMR Research.

"They continue to provide features and functions that are pretty compelling once you see them," he said. "And for the most part, the customers we serve are not in a position to want to experiment with drastic alternatives, because that's a scary proposition."

Microsoft appears to have the most at risk in the basic terminal and kiosk markets, where companies are looking for ways to minimize costs. "Microsoft has never liked the idea of a thin client, like Novell and Sun offer, because it threatens their desktop business," Murphy said. "But they've had to make some concessions to it. This has placed Microsoft in a position of having to hedge its bets, by supporting a hybrid approach that will support a rich desktop experience as well as kiosks and smart devices in the field that don't require a rich OS and the extra hardware that goes with it."

Microsoft therefore faces the unpleasant prospect of companies resisting wholesale upgrades and investments, Murphy said. "Fewer workers will need or get full versions of Office, and fewer will require Vista to do their jobs," he said.

A Switch in Emphasis

Microsoft's initial Vista development effort was dedicated to giving PC operators vastly expanded search capabilities. But along the way Microsoft had to switch its emphasis to security, which these days ranks first and foremost in the minds of business managers and consumers alike.

"Microsoft's popularity makes it and its users the continual targets of exploiters, spammers, hackers, and malware makers," Murphy said. "Since they are more vulnerable, they have to find more ways to stem that flow."

For example, Vista will incorporate a technology called BitLocker that will encrypt and password-protect the contents of any desktop or laptop hard drive. This is expected to make it harder for unauthorized users to access data on a stolen PC. The technology should appeal to businesses worried about compliance with Sarbanes-Oxley and other government regulations that incorporate data-protection provisions.

From the home user's perspective, perhaps the greatest upgrade to the Windows OS will be how Vista will provide a multimedia experience that has been optimized for high-definition (HD) wide-screen displays. The move comes as a result of folding today's Windows XP Media Center Edition software into the new Vista OS.

The Media Center embedded into Vista will include the requisite support for allowing people to watch and record premium and HD cable programming on Media Center PCs without the need for a separate set-top cable box. Satellite TV households also will benefit from a partnership between Microsoft and DirecTV that will enable the flow of DirecTV digital content, including HDTV programs, between Windows-based PCs, DirecTV's digital set-top boxes, and even Microsoft's Xbox 360 gaming platform.

From the business perspective, however, there's not much interest in Media Center, and melding such sophisticated software with Vista could prove to be a liability, Murphy said. "Microsoft probably wants to move people forward, but if your choice is between fat-client and thin-client architectures, the fat one is starting to look extremely obese and there's where all the hardware requirements also get boosted."

The extended multimedia capability of Vista is overwhelming for a lot of companies to think about and will have to prove itself as an asset at some point, Murphy said. "But, invariably, there will be demand for that somewhere down the line."

Vista also will sport several enhancements to the Windows graphical user interface (GUI) that is designed to help people find information quickly on their PCs. "There's a lot of 'eye candy' that comes with Windows Vista, including live icons on the task bar and a 3D capability that gives previews of windows as you flip through them," said Michael Silver, a vice president at the Gartner consulting firm. "While attractive to consumers, most businesses won't see a lot of benefits from these features in terms of better performance and management, and you'll need the right graphics card to make it play."

Everything but the Kitchen Sink

Vista will be offered in two versions for businesses, three for consumers, and one geared to "emerging markets." The strategy is meant to ensure that Vista buyers only pay for the feature sets they truly need. All versions will be available for either 32-bit or 64-bit PC systems.

For the PC fanatic who wants the best of all possible worlds, Vista Ultimate will include the entertainment, mobility, and business-oriented features available in all Vista offerings. At the other end of the spectrum, Microsoft will be offering a stripped-down version called Vista Home Basic for the cost-conscious, and somewhere in the middle sits Vista Home Premium, which will ship with most consumer PCs. Companies will have a choice between Vista Business and its security-heavy cousin, Vista Enterprise, in November. The low-cost Vista Starter is designed for families and entry-level PC users in developing economies.

"The number of Vista versions is a little bit overblown, but on the other hand the Vista mix is more straightforward than what happened with Windows XP," Silver said. Windows XP was released in five versions, but these were tailored to specific hardware architectures, not users.

Vista Enterprise is geared to organizations with highly complex I.T. infrastructures. However, the enterprise version will be offered only to customers participating in Microsoft's Software Assurance, a security-oriented subscription service, which will require a multiyear financial commitment.

Linux Alternatives

Ironically, Microsoft's rivals have been among the first to take comfort from Software Assurance. "When Microsoft announced Software Assurance, it was a great day for the Linux desktop, because the multiyear commitment and the large checks that companies have to write will cause them to reevaluate the situation even as the pen hovers above the contract," said Greg Mancusi-Ungaro, director of marketing for Linux and open source at Novell.

"The fact that Vista for the enterprise requires a significant financial commitment opens up conversations for alternate methods for dealing with client-side computing," he said, adding that Novell does not require multiyear commitments for Desktop 10, its forthcoming Linux-based operating system.

Gartner's Silver agreed that the multiyear commitment could be a problem for Microsoft. "Software Assurance is definitely an issue for enterprises, and companies will have to come to grips with it," he said. "It presents an opportunity for Apple, [as well as for] Novell and the other Linux players."

Although Novell's Desktop 10 is much improved over previous versions, the cost of migrating Windows applications remains the main barrier to widespread enterprise adoption, Silver said.

"Novell Desktop 10 is an important milestone but most organizations have to support lots of applications, and so a wholesale migration becomes expensive and not doable due to sheer size and cost," Silver said. "Still, Linux could certainly be appropriate for single-function PCs ... and could be appropriate for users with few applications or browser-based applications. And frankly, that could describe a whole lot of people."

Mancusi-Ungaro pointed out that computing is far different today than what it was even five years ago, when the last Windows upgrade came to market. "It's no longer a one-size-fits-all world," he said. "While I don't think we will see too many headlines of companies doing what Novell has done, which is move its entire work force to Linux, I do think we will read about 10 to 30 percent of the seats in enterprises moving to a commodity-class OS because it is all their users really need."

For example, the cash registers at many retail stores are now special-client computers tied directly into back-office systems. "These transactional fixed-function work stations are used for just one or two tasks," Mancusi-Ungaro said. "This is where Linux is an ideal choice and where we see the first wave of Linux adoption occurring on the desktop."

The second wave is the Linux OS for the basic office worker, he said. "There are sets of users in every organization, which because of job function have a definite need for basic elements such as an office productivity suite, e-mail, a file system and printing, but very little else in the way of additional demand. Dollars previously allocated to proprietary operating systems therefore could be reallocated through the deployment of low-cost Linux desktops that provide all of the set functions that the user needs."

Coercion and the Courts

Few large businesses expect to implement Vista in one fell swoop, according to AMR's Murphy. "Some will upgrade in conjunction with hardware upgrades and updates while others will upgrade incrementally based on company division, employee role, or geography," he said. "In addition, many believe, based on past experience, that early iterations of Vista will present too many stability and security risks."

The number-one reason for enterprises to upgrade from Windows to Vista continues to be the threat of discontinued support for older products, Murphy wrote in a recent research note. Executives will need some serious convincing, he said, and decision makers "will continue to bristle at what looks to them like coercion rather than a value proposition."

When all is said and done, just how nervous should Microsoft really be about losing more market share to its OS competitors?

"Microsoft is one of the more paranoid companies in the world, and they always worry about all of these things," Silver said. Nevertheless, as Richard Nixon famously observed, just because you're paranoid doesn't mean they aren't really out to get you. Microsoft not only must contend with its OS competitors, but also must deal with the threat of future antitrust actions in Europe and Asia. One rumor points to this potential litigation as a reason why Microsoft decided to hold back on its Vista plans. Another rumor suggests that Microsoft decided that a wholesale rewrite of the OS code was necessary.

"Vista is ambitious, and it has a fair amount of compatibility challenges to it in terms of the user access control," Silver said. "I think they did not budget enough time for betas, and as things turned out to be more complex, there was no possible way to remedy those in the short amount of time that they had allotted themselves."

Whatever the reasons for the delays, the real proof will be in the pudding. By and large, beta testers of the new OS have had good things to say, and the January 2007 rollout is sure to attract early adopters and generate a ton of news coverage. No matter the result in the marketplace, however, one thing is certain: the hindsight on Vista is sure to be 20/20.

Posted by keefner at April 21, 2006 10:38 AM