In the first part of this essay I raised the question of whether Microsoft with Office and especially Vista had done tremendous damage to the Microsoft Brand – lowest initial and ongoing costs in software, top features with no show-stoppers, most applications and therefore interoperability is largely irrelevant, etc. All of these attributes are in shambles with Office but especially Vista. Then I raised the issue that in its efforts to be more open and interoperable, Microsoft was just offering a Silverlight Solution – open to some of the current major software methods and players in some respects but insuring that all products and services worked best by far exclusively in the Microsoft stack.

Then I finished with idea that Microsoft had the market power to sell and then enforce SilverLight Solutions- i.e quasi-open but still stocked with proprietary features and/or dependencies. This second essay will consider the notion that there may be some counter trends, based on Microsofts poor handling of its Brand and the necessary transition of that Brand to new market realities.

The Counter Trends

I would like to raise three observations that would seem to imply that Microsofts vaunted market power may have some serious cracks in the wall.

First, take the Internet Explorer browser monopoly. Just five years ago IE market share was in the 95% range and had been so for 5 years after starting dead last in the market. As of January 2008, Computerworld and others were reporting that Internet Explorer market share had dropped into the 75% range (there is great variance on these browser market share measurements). Going forward, Firefox and Safari will both have major upgrades before mid-Summer. Both will have major feature enhancements with Firefoxs factor of 2 speed improvement in DHTML=JavaScript+CSS+DOM processing being one of the most important. With more Web 2.0 apps running ever larger DHTML-based scripts, browser response time is more dependent on solid runtimes for DHTML components.

In contrast, IE8 is not due out until the end of the year, if that. But it does raise the question on Redmonds promise at IE7s launch in 2006 to shorten significantly the upgrade time for IE editions. For this reason, continued better DHTML compatibility in all browsers but IE plus Firefoxs big performance advantage, the 1% percent market share gain per quarter may become more pronounced as organizations switch to more Web 2.0 applications.

In general, this is a case of a promised open and free browser from Microsoft with serious continuing proprietary and standards compatibility problems losing ground to Firefox mainly but all browsers. Head to head, Microsoft is not keeping up with open and open source.

2)The Apple Problem

The Mac ad aside, the problems with Vista have certainly contributed to Apple latest quarterly results. The consenus among financial analysts would be for modest growth in Mac sales in 1st quarter as the economy in the US where half Mac sales are would see a downturn. Surprise – Mac computer sales were up by 30% to just over 1 million units. This contrasted with overall US PC sales gaining by just 3% in the quarter. Except for Dell at a 15% gain, all other vendors saw declines, some in double digits.

Now I dont want to do an Etch-a-Sketch prediction, but until Vista gets really fixed, will Windows PCs market hare see a steady IE-browser like quarterly drop ? The next quarter will tell the tale.

3)The Linux Problem
Linux doesnt go away because its free and constantly improving. The first point is important because Linux on the Asus Eee and a new hoard of me-too products are gaining traction as a mini-laptop for $200-250. Change to the new Microsoft XP-lite (it runs only 3 apps simultaneously) and the price has to go up because Redmond will not give away its software free forever even to protect its PC desktop monopoly. Watch for the pricing of Asus Eee with XP versus Linux. Watch for other vendors that use Intels Atom chip – and where they price Linux versus XP versions.

Regardless of pricing, this liitle PC from presents not just Microsoft but all PC vendors with a problem – how do they react to PCs targetted to fit the low cost, highly mobile market place represented by the EEE and its knock offs. Clearly regular OS pricing is not going to fit into this ultra- competitive market place.

IDC sees Linux total spending growing from 2007s $21 billion in 2007 to $49 billion by 2011. That is a 35% annual growth rate around a core of free software. To put the question on whetjher Linux is mission critical I quote from the same article:
Linux is continuing to become the lifes blood of many businesses. Or, as in the case of the Chicago Mercantile Exchange, an early Linux adopter, it already is. A representative of the Exchange at the Summit said, “Were already doing a trillion dollars of trades on the exchange.” What part of mission-critical ready do you not understand?

In sum, Linux in particular and Open Source in general has been a reaction against a) the premature closing out of the IT software marketplace by Microsoft and Oracle and IBM and others with predatory pricing and other monopoly enhancing practices , b)the need for open, user driven development and refinements in the marketplace, and c)emphasis on more service and support as opposed to EULA protected “we will choose how to support and serve users”.

Now as noted, Microsoft is not the only sinner – but might be fairly described as pioneering prodigal son – especially when one considers the Brand-killing nature of Vista and the hubris behind the thinly disguised as open SilverLight Solution . What is needed is a clear rethinking on how to innovate and create real value in the IT market . And to add insult to injury, Microsoft has yet to shed the image of being the most Machiavellian of corporations – testament to that is a)Vista being foisted on consumers and b)when Brad Smith, Lawyer in Chief for Redmond, has to be present on a big announcement of the companys new Interoperability Strategy.

So let me say it one more time – its the Microsoft Brand , its the Microsoft Brand, its the Microsoft Brand. … right now it is Lost.