Xp Sits On The Shelf
The Age
Wednesday November 7, 2001
Microsoft may have escaped the United States Department of Justice's antitrust lawsuit, but it still has problems, the biggest of them the fact that its core business, selling software for desktop computers, has stopped growing.
Since it went public in 1986, the house that Bill built has enjoyed an average annual revenue growth rate of about 40 per cent, until this year. Growth in the financial year just past was a niggardly, by Microsoft standards, 10 per cent.
Microsoft's Windows operating systems dominate the global desktop, with more than 95 per cent of the corporate market and better than 80 per cent of home computers. But the interest that had customers flocking to buy Windows 95 has not extended to Windows XP, the latest and, says Microsoft, greatest version.
Harvey Norman head of computer sales John Slack-Smith told analysts that early sales had been ``above expectations" (which were fairly low, according to Gerry Harvey himself), but the corporate market had remained aloof.
``I don't think we've sold a single copy," said Jim Lang, sales manager for Computerland, a corporate supplier based in Sydney. ``No one is making the move to XP. The focus of our customers is still Windows 2000."
IDC senior analyst Logan Ringland said the federal election, combined with gloomy economic forecasts, was keeping company chequebooks shut. Sales of personal computers had to pick up before Windows XP would take off, he said. Microsoft had spent a fortune on marketing the product, but it did not seem to be enough to restart the market. Retail dealers report lots of ``tyre-kickers" but few sales and certainly no rush.
Part of the problem for users is that if they have stayed with Windows 95 rather than upgrading to Windows 98 or 2000, there is no upgrade path to XP. They must pay the full price (about $600 for retail customers) to get the new system. They then have a new operating system that is considerably prettier but, given the shortage of applications to take advantage of its new features, isn't much different from the old one.
Some analysts say the problem is deeper than just lack of consumer and business confidence. They believe the big run for software such as Microsoft's Windows is over. Microsoft spent squillions globally on promoting Windows XP for only moderate sales. No official figures are available, but market analysts suggest total sales of XP in Australia in the first week might have been 1800 copies to consumers and about 250 to the corporate market.
But industry optimists say it is all simply because we're in the eye of the IT hurricane; that the next big blow is at hand and will come from technologies still being developed - broadband wireless, universal connectivity, Internet with everything.
Microsoft seems to agree and is now betting much of its wad and development energies on its .Net program, a so-called ``distributed computing framework" and, again, there has been rumbling about monopolistic behavior.
Cynics say .Net is Microsoft's renewed bid to own the Internet; to use Windows' dominant position on the desktop to grab the biggest chunk of the omnipresent medium that none of us, least of all business, will be able to ignore.
Microsoft sees .Net driving everything, from corporate systems to hand-held computers and mobile phones, and is spending a lot of money to attract software developers, some of them in Australia, to move over to it.
The .Net framework is a Web services system based on the idea of an Internet ``cloud" from which users will get core network services, applications and other functions. This, of course, dramatically reduces everyone's need of an operating system, even of one called Windows XP.
© 2001 The Age
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