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September 8, 2006

What if Microsoft hadn’t bothered with Vista?

Posted by David Hunter at 2:22 PM ET.

Today at Business 2.0 Magazine, Owen Thomas steps back from the hustle and bustle and offers A reality check for Vista. In a nutshell, the argument is that Vista isn’t going to change the fact that with relatively few exceptions, most everyone buys a new PC operating system when they buy a new PC and “the version of Windows that those retail customers have on their PC hardly figures into the equation.” This leads to some heresy:

The modest expectations for Vista do give rise to a radical question: How many tens of thousands of engineers might Microsoft have fired, and how many billions of dollars might it have saved if it had just not bothered to develop Vista in the first place? Most of us would have kept buying Windows anyway.

Al Gillen, research vice president for system software at IDC, points out that Microsoft’s Windows sales have steadily increased, even though the company hasn’t released a major new version in five years: “Have sales of PCs been falling off? The answer’s no.”

Of course, Microsoft needs to keep up with the competition. Apple CEO Steve Jobs loves to point out that his company has released five versions of Mac OS X in the time it has taken Microsoft to develop one. And the volunteer programmers behind Linux continually tweak and improve that open-source operating system. At the same time, though, Microsoft’s share of the desktop OS market has remained at around 95 percent.

I suppose a more conventional question would be, “How long could Microsoft have gone with Windows XP by occasionally adding a tweak here and bundling an application there?” but it amounts to the same thing.

On a Microsoft business basis, I suspect it really is hard to justify the magnitude of Vista development although Microsoft would undoubtedly claim reduced security fix expenses, enablement of new application areas, and if nothing else, public clamor for a perception of improvement. But the first two remain to be seen and in any case might be as easily satisfied as the latter by a yearly update like Apple.

At this point, it’s all a sunk cost, of course, but it makes one wonder if Windows Vista should be the last Windows client operating system for a long, long time.

Filed under Financial, General Business, Microsoft, OS - Client, Windows Vista

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