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Don’t Pull the Plug

By Eugene Kim

Microsoft’s newest operating system, Windows Vista, has proven to be a tough sell. Faced with lackluster sales and a decidedly chilly reception from the press, garnering first place in PCWorld magazine’s “15 Biggest Tech Disappointments of 2007,” the Redmond-based software giant has responded by deciding to stop offering Vista’s popular predecessor, Windows Experience (XP), for sale in retail and other channels. This move is not only a poorly concealed ploy to boost flagging Vista sales, but is also a policy that will hurt Microsoft in the long run.

In spite of Vista’s well-publicized release in January 2007, consumer demand for Windows XP has been quite strong, and XP still retained a dominant 75 percent market share as of September 2007 . In fact, Dell, one of the largest American computer manufacturers, re-introduced Windows XP into the retail channel last April, because of high demand from customers. Despite this continued demand, on June 30, 2008 Windows XP will no longer be available in retail outlets; by February 2009, no one—not even custom personal computer builders—will be able to carry XP as an option for customers .

In order to fully understand the disastrous implications of this decision, one must consider the fact that Microsoft does not actually sell a copy of Windows to either companies or customers; instead, it merely licenses the rights to its software on a per-client basis. With its planned termination of new license sales, Microsoft is essentially forcing its customers into upgrading either their hardware or software. Given Vista’s particularly steep hardware requirements—according to The New York Times, only about six percent of business computers will be able to run it—this transition should have been delayed as long as possible. Instead, this new policy will only increase public resentment of Microsoft.

Traditionally, Microsoft has allowed older license-holders a fairly lengthy transition period. Customer and corporate licenses for Microsoft Disk Operating System (DOS) 6.xx, one of Microsoft’s most successful products, were available for sale from 1994 to 2001—a staggering seven years . During this period, Windows 95, 98, 98 Second Edition, 2000, and Millennium Edition were all released, but Microsoft continued to offer DOS as a viable option for its clients with older hardware or software needs . Supporting consumers who still use a firm’s older products is not just good business; it also guarantees brand loyalty and future sales. By stopping this practice with Vista’s introduction, Microsoft is eroding this precedent.

Furthermore, although Vista sales may increase in the short term as a result of this decision, it may also ultimately hurt Microsoft’s market share. The firm’s few competitors in the operating system market, most notably Apple’s OS X, have been gaining ground in recent months . The scrappy Cupertino-based consumer electronics firm has seen a substantial increase in laptop sales, and has even released a series of advertisements poking fun at Vista’s more intrusive features, such as User Account Control . In these ways, Vista’s shortcomings may have been contributing to Microsoft’s market share loss to Apple.

Finally, Microsoft’s aggressive marketing of Vista already has and will continue to hurt the PC industry as a whole. In late 2006, Microsoft began pushing computer manufacturers to certify various products as “Vista Ready” or “Vista Capable,” when in fact many of these machines were only capable of running a crippled version of the software, which The New York Times deemed to be “too stripped down to be worthwhile.” As a result, the company recently faced a class-action lawsuit for false advertising and artificially inflating demand . While it is unlikely that Microsoft will change its policies because of the litigation, these types of lawsuits destroy confidence in the PC industry as a whole. The reduced sales and revenues resulting from this loss of confidence, along with a rash of frivolous lawsuits, are hardly what the national economy needs during a recession.

A better solution to Microsoft’s current woes is to offer the two products side by side, with similar pricing. Considering that over 90 percent of the world’s personal computers run Windows operating systems, it only makes sense that any product sold by Microsoft—especially one as popular as Windows XP—should continue to be offered for sale . With Service Pack 1 for Vista due to be released this month, many of the kinks with the initial release should be ironed out . As such, Vista now has the potential to become a strong product. When Vista is ready to stand on its own, the market, not Microsoft, should decide when it has had enough of Windows XP.

Eugene Kim ’10, a Crimson editorial editor, is a government concentrator in Kirkland House.

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