Response to Windows 7 Article on ZDNet
A friend of mine sent me a link to a ZDNet article about Microsoft giving away it's next OS for free. I think the author of the article, Andrew Nusca, is absolutely out of his mind and has no concept of running a business. It's not about being popular, it's about making money.
Nusca references a Gizmodo blog posting about why Microsoft should had out it's new OS for free. From the Gizmodo post, it states that Microsoft should sell it's new OS at a significantly lower price or simply give it away. The reasons for such are:
For starters, Microsoft needs to get rid of all the separate license types (OEM vs. upgrade vs. full) and trim the number of boxed configurations. Give buyers three versions, Home, Business and Ultimate, all at a reasonable price. $129 would be ideal for the first two, with $149 for Ultimate.
Vista probably would have been much more well received has Microsoft gone with a similar business model that Apple went with for OS X Leopard. One SKU period. But this is still not a story about popularity because in the computer world Microsoft still possesses 90% market share, and nearly 98% market-share in the business space.
Here's where the Nusca starts loosing it, he states that,
Microsoft should just allow Windows 7 and Internet Explorer 8 to show up as a Windows update, plain and simple. For those who don’t have high-speed connections, they can call in and request a CD to be mailed. Businesses can work out client licenses but shouldn’t get screwed, either.
That is just ridiculous! Simply just as an update?! Obviously Andrew Nusca has no concept of the logistical nightmare of upgrading an OS, especially one delivered as an update.
First who would qualify for this update? Windows Vista and XP owners? What about users that are still running Windows 2000? As a IT professional I have worked on over half a dozen sytem migrations from Windows 95/98 to 2000, 2000 to XP, and XP to Vista and it all takes months of planning and careful execution. Even critical patches takes weeks and sometimes months to prepare in a business environment. And for those home users that are patching on their own, who remembers the "bugs" during Vista SP1? Windows 7 is a major kernel change from XP and a derivative of the Vista/Server 2008 kernel. So the underlying system kernel may be similar it's certainly would not be as simple as sending out updates via the internet or via CDs, who uses CDs anymore anyways. Windows 7 Beta nearly fills up an entire DVD at 4GB, forget CDs.
In the article he also states:
This could be the biggest PR success of the tech industry.
“What of revenue?” all you penny pinchers ask. Well, the quick answer is that this is a short-term hit for a long-term solution: With a good product, Microsoft can reclaim the market share it lost to Apple and Co.
Let’s be frank: Just how much revenue does Microsoft get from consumer purchases (as opposed to the revenue from licensing Windows through computer manufacturers such as Dell, HP, and Lenovo)? I’m willing to wager that it’s not that much, relatively speaking.
PR success? Sure Vista was poorly received and it's probably better than most people expect it to be especially after Microsoft's marketing disasters (The Mojave Experiment and Gates and Seinfeld commercials). A PR success does not always translate to a business success especially when you cannot monetize the numbers. So what Nusca implies is that if Microsoft gives away it's product it will gain back 5% of the market-share it's lost to Apple in the last 3 years. I doubt it. Apple manages a vertical business model because that way it can control the user experience from top to bottom, and thus it can deliver a better product and user experience, and that's one of the main reasons why Apple has done so well in recent years. Though I would agree that Microsoft should not expect users to pay $300+ for an OS, not even more than $150 especially since Windows 7 is what Vista should have been.
Andrew Nusca further proves his inability to understand the business side of technology by stating:
So: Buy a new computer, get Windows 7 (cost paid by manufacturer). Keep your old computer, Windows 7 is free, assuming you can run it.
He fails to realize that NOTHING is free to the customer. He assumes that the manufacturer will just give customers Windows 7 for free, but it's built into the cost of the hardware software bundle. If he knew anything about the hardware manufacturers he'd quickly realize that even the "free" software and trial ware that comes with a computer comes at a cost the the consumer. The manufacturer will either pass the cost onto the customer by including it in the price, or it will pass the costs off to the third-party vendors that want their trial software pre-installed on the system as a means of try-before you buy. And if the customer doesn't want trialware installed on the system, he/she is usually charged a $50-100 fee to get the computer system with only the OS installed and no "free" software pre-installed.
Sure the perception is that it's FREE but you are paying for it, and buying new hardware is much more costly than simply buying the software and upgrading your system. There's no way that Microsoft is going to give it's OS away for free to hardware manufacturers.
As for the users that are on Windows Vista or XP, they are still stuck with their existing hardware, which may or may not run Windows 7 to it's full capability - obviously depending on how old or powerful their hardware is.
Nusca's argument is, "They won’t need to convince XP holdouts - it will be a no-brainer upgrade."
However, Microsoft will still be left with a bad PR situation by handing out it's new OS, because there will be those users out there that will want to install the new free operating system on their old machines. So consumers will now be left with the choice of trying to reinstall their old OS to bring their machines back to a useable state, or they will be forced to upgrade to newer hardware. The later option would definitely not be perceived as FREE to any user.
So no Mr Nusca, giving Windows 7 away for free is NOT a "no-brainer upgrade."
Alright, now that I've clarified why it's not a good idea for Microsoft to be handing out Windows 7 for free, beside the fact that it would be financially irresponsible of the company, there are a few suggestions that could be used to make the new operating system a success.
Nusca references a Gizmodo blog posting about why Microsoft should had out it's new OS for free. From the Gizmodo post, it states that Microsoft should sell it's new OS at a significantly lower price or simply give it away. The reasons for such are:
- Poor consumer perception of Vista, especially with consideration to the Mac;
- Vista’s resource hog ways with regard to the blooming Netbook industry;
- The most important reason for ZDNet readers: Business users just won’t bite. Period.
For starters, Microsoft needs to get rid of all the separate license types (OEM vs. upgrade vs. full) and trim the number of boxed configurations. Give buyers three versions, Home, Business and Ultimate, all at a reasonable price. $129 would be ideal for the first two, with $149 for Ultimate.
Vista probably would have been much more well received has Microsoft gone with a similar business model that Apple went with for OS X Leopard. One SKU period. But this is still not a story about popularity because in the computer world Microsoft still possesses 90% market share, and nearly 98% market-share in the business space.
Here's where the Nusca starts loosing it, he states that,
Microsoft should just allow Windows 7 and Internet Explorer 8 to show up as a Windows update, plain and simple. For those who don’t have high-speed connections, they can call in and request a CD to be mailed. Businesses can work out client licenses but shouldn’t get screwed, either.
That is just ridiculous! Simply just as an update?! Obviously Andrew Nusca has no concept of the logistical nightmare of upgrading an OS, especially one delivered as an update.
First who would qualify for this update? Windows Vista and XP owners? What about users that are still running Windows 2000? As a IT professional I have worked on over half a dozen sytem migrations from Windows 95/98 to 2000, 2000 to XP, and XP to Vista and it all takes months of planning and careful execution. Even critical patches takes weeks and sometimes months to prepare in a business environment. And for those home users that are patching on their own, who remembers the "bugs" during Vista SP1? Windows 7 is a major kernel change from XP and a derivative of the Vista/Server 2008 kernel. So the underlying system kernel may be similar it's certainly would not be as simple as sending out updates via the internet or via CDs, who uses CDs anymore anyways. Windows 7 Beta nearly fills up an entire DVD at 4GB, forget CDs.
In the article he also states:
This could be the biggest PR success of the tech industry.
“What of revenue?” all you penny pinchers ask. Well, the quick answer is that this is a short-term hit for a long-term solution: With a good product, Microsoft can reclaim the market share it lost to Apple and Co.
Let’s be frank: Just how much revenue does Microsoft get from consumer purchases (as opposed to the revenue from licensing Windows through computer manufacturers such as Dell, HP, and Lenovo)? I’m willing to wager that it’s not that much, relatively speaking.
PR success? Sure Vista was poorly received and it's probably better than most people expect it to be especially after Microsoft's marketing disasters (The Mojave Experiment and Gates and Seinfeld commercials). A PR success does not always translate to a business success especially when you cannot monetize the numbers. So what Nusca implies is that if Microsoft gives away it's product it will gain back 5% of the market-share it's lost to Apple in the last 3 years. I doubt it. Apple manages a vertical business model because that way it can control the user experience from top to bottom, and thus it can deliver a better product and user experience, and that's one of the main reasons why Apple has done so well in recent years. Though I would agree that Microsoft should not expect users to pay $300+ for an OS, not even more than $150 especially since Windows 7 is what Vista should have been.
Andrew Nusca further proves his inability to understand the business side of technology by stating:
So: Buy a new computer, get Windows 7 (cost paid by manufacturer). Keep your old computer, Windows 7 is free, assuming you can run it.
He fails to realize that NOTHING is free to the customer. He assumes that the manufacturer will just give customers Windows 7 for free, but it's built into the cost of the hardware software bundle. If he knew anything about the hardware manufacturers he'd quickly realize that even the "free" software and trial ware that comes with a computer comes at a cost the the consumer. The manufacturer will either pass the cost onto the customer by including it in the price, or it will pass the costs off to the third-party vendors that want their trial software pre-installed on the system as a means of try-before you buy. And if the customer doesn't want trialware installed on the system, he/she is usually charged a $50-100 fee to get the computer system with only the OS installed and no "free" software pre-installed.
Sure the perception is that it's FREE but you are paying for it, and buying new hardware is much more costly than simply buying the software and upgrading your system. There's no way that Microsoft is going to give it's OS away for free to hardware manufacturers.
As for the users that are on Windows Vista or XP, they are still stuck with their existing hardware, which may or may not run Windows 7 to it's full capability - obviously depending on how old or powerful their hardware is.
Nusca's argument is, "They won’t need to convince XP holdouts - it will be a no-brainer upgrade."
However, Microsoft will still be left with a bad PR situation by handing out it's new OS, because there will be those users out there that will want to install the new free operating system on their old machines. So consumers will now be left with the choice of trying to reinstall their old OS to bring their machines back to a useable state, or they will be forced to upgrade to newer hardware. The later option would definitely not be perceived as FREE to any user.
So no Mr Nusca, giving Windows 7 away for free is NOT a "no-brainer upgrade."
Alright, now that I've clarified why it's not a good idea for Microsoft to be handing out Windows 7 for free, beside the fact that it would be financially irresponsible of the company, there are a few suggestions that could be used to make the new operating system a success.
- Throw out the old licensing model. For too long Microsoft has relied on it's old pricing model to sell it's operating system. Each SKU has different features, at a different price point and even different hardware requirements. Make it simple and reduce the number of SKUs to 1. Like Apple with OS X, sell your OS, the core of your user experience. Don't try to bundle your OS with additional features. Sell features separately.
- Stop trying to appease the LCD (lowest common denominator). Who are you kidding Ballmer? Vista runs like crap on the minimum required hardware specs and most of the features are unavailable to people trying to run Vista on the minimum available. Make sure you put required specs as your minimum specs for Windows 7. If MSFT is at all concerned with customer perception, this is the single easiest way of ensuring that 90% of your customers are happy with the new OS.
- Deliver your operating systems when there are vast improvements to the underlying functionality of the kernel and stuck with it. For too many years Microsoft tries to reinvent itself and push it's products to the market. I understand this is how Microsoft looks at growth, but rather than trying to reinvent yourself and try to sell new operating systems make your operating system solid and sell feature packs.