Microsoft News Tracker

Jay Greene and Peter Burrows, with Steve Hamm at BusinessWeek online:

A How-To kit for the ideal PC has been making the rounds of leading design shops. It calls for “accelerated curves” and “purposeful contrast.” The preferred colors include a shade of black called Obsidian and a translucent white dubbed Ice. “We want people to fall in love with their PCs, not to simply use them to be productive and successful,” reads the enclosed booklet. “We want PCs to be objects of pure desire.”

Doesn’t sound much like Microsoft (MSFT), does it? But it is. BusinessWeek has learned that a team of 20 in-house designers has been working quietly for the past 18 months on an elegant new look for PCs that will run Microsoft’s next operating system, Windows Vista. It’s a major departure for the company, which historically has left design to the likes of Dell (DELL), Hewlett-Packard (HPQ), and Gateway (GTW). Persuading the hardware guys to embrace the toolkit won’t be easy. They’re already working overtime to build better-looking gear on their own.

Microsoft for years has pushed their functional specifications on OEMs via the Windows Hardware Engineering Conferences and other mechanisms, but style?

Microsoft is no newcomer to hardware design, of course. The company has made PC mice and keyboards for years. The Xbox game console has been a hit. Microsoft is working on a music player, Zune, that it hopes will rival the iPod.

Microsoft’s mice and keyboards are nicely done, but they’re a niche and the Xbox 360 was created with significant outside design help. I expect that the same is true for the Zune, so it’s not quite clear exactly what Microsoft brings to the table. More to the point, the PC business has some tough cost strictures:

But trying to transform the PC ecosystem—even peripherals makers such as Logitech received the kit—takes things to a whole new level. It reflects the fact that the economics of the computer business is changing. The PC world used to be divided into two camps: those who made lucrative software and the poor schlubs who built the low-margin hardware it ran on.

Apple has turned that model on its head. From the beginning it has managed to create a unified design for its products by building everything itself, first with the Mac and then later with the iPod. Although Apple sells one computer for every 20 PCs, the iPod’s success has proved how crucial it is to create a seamless experience for consumers, who are buying much of the gear these days. Says a top PC design executive: “You’re going to see more and more of this desire to integrate hardware and software.”

I’ll buy that, but it’s not clear to me how a color scheme will make the experience seamless - I would have thought the seamless part would start a little closer to Redmond. Besides, if you really want something snappier than a beige box, you don’t have to look too far (e.g. [1] if you like bright lights). It sounds more like Microsoft is worried that the OEMs aren’t following their functional “suggestions” in lockstep and the styling suggestions are just a bonus.

Hit the link for much more, but the big PC makers aren’t exactly jumping for joy at the chance to further commoditize their products. When all Windows PCs are the same except for the manufacturer’s logo, their margin inevitably goes to zero. I do wonder though if Microsoft has any thoughts of ditching their pesky partners on PCs, just like they did on personal media players with the Zune? It would make the Apple emulation complete.

Todd Bishop has the story at his blog and in the Seattle PI (linked within the quote):

Without any fanfare, Microsoft updated the employee count on its Web page of corporate data Wednesday. The new numbers reflect a net addition of more than 10,000 people worldwide in the fiscal year ended June 30, bringing the total to 71,553. In raw figures, it’s the biggest annual increase in the company’s history.

No wonder it’s so hard to find a parking space on the Redmond campus these days.

The total increase is about twice what Microsoft was projecting at the beginning of the fiscal year. See this story for more on the reasons for the employment growth…

More by following the links but the total increase was 10,081 worldwide, up 16% from June 30, 2005 with no breakdown by job category. Microsoft says it’s due to all the new products in the pipeline. Bishop contacted the anonymous Microsoft employee who runs the Mini-Microsoft weblog that is constantly critical of Microsoft “bloat” and his reaction was, “Goodness gracious.” I’d say that the growth in the number of contractors might also make interesting reading.