User:MIS301-Microsoft

Windows Vista and the Uncertain Future of Microsoft
As the 2005 fiscal year was approaching its end, Bill Gates and Steve Ballmer looked towards future products and updates to halt the regression Microsoft had experienced after nearly two decades of being one of the most dominant companies in the world. 2005 faced Gates and Ballmer with new challenges as Windows and Office, its two core products, were now struggling to grow and had to compete with new software such as Linux and Leopard. If they wanted to fulfill their revised mission statement in becoming the “worldwide leader in software”(16), the brains and brawn of Microsoft would have to alter various programs and introduce new ones in response to the new challenges facing them.

Part of the major changes Microsoft proposed to release in 2006 was Windows Vista, a new version of the Windows operating system. This new version was supposed to include “improvements in security, better graphics, and improved searching capabilities” among other things. Because its release was delayed from 2005 to 2006, Vista generated unprecedented press and anticipation. However, some analysts predicted that Vista would not live up to the lofty expectations set for it, mainly because of “potentially slow customer adaption.”(16)

When Vista made its debut, the analysts’ analysis proved accurate as there were many complaints over an array of issues. The focus of this case study will mainly focus on these failings of Vista and the issues it is having. A particular concentration will include analysis of complaints regarding Vista’s apparent over complication, the seemingly counterintuitive nature of its processes, and the difficulty users are having adjusting to the new system. This topic generated interest because of the overwhelming amount of negative responses since Vista’s inception and its role in Window’s decline. While it was supposed to be a catalyst to return Microsoft to greatness, Vista ended up playing a role in heightening its decline.

Now, it is fascinating to see how Microsoft is furiously working to improve Vista and how it is reaching to areas outside of the failing operating system’s realm to address the problem. Because Microsoft is one of the most successful and powerful companies in the world, it is very beneficial to see how they respond to their mounting failure, whether it is in issuing updates to fix the kinks in Vista or in announcing the construction of a brand new operating system.

Competitive Landscape
There is a lack of enthusiasm for Window’s Vista, especially among the IT group as they generally regard it to be a step backward from XP. Some in fact are refusing to upgrade to Vista until Microsoft’s next operating system is launched. In light of this, Microsoft is faced with many challenges, including keeping the Windows identity on the top in the marketplace and competing with Linux as it appears in the consumer and enterprise desktop spaces. Microsoft also has to deal with advertising tactics such as Apple’s humorous and unfair attacks on Windows via the PC versus Mac advertisements. However, the commercials fail to recognize that Windows is known to offer a broad range of features such as being compatible over multiple generations of hardware and running on a wide range of devices (Seinfeld can’t fix cracks in Windows).

Diversification

Microsoft has always employed robust strategies to secure its position. Their strategies are always focused on multiple areas and not just a single area. This highly reduces its risk of failure as success in one area compensates for loss in another. It has a number of different strategies which increase the odds of survival when the environment changes. Initially, when Bill gates started the company, he was investing in operating systems, networking sites, and application programs. With the launch of Vista, however, Microsoft had become so centered on its production of operating systems, that it had lost its sense of diversity and the broad range of products that, in the past, was part of what has made it so successful. With this realization, Microsoft is again trying to broaden its areas of expertise. Microsoft is not only focusing on new operating systems such as Windows 7, but is also trying to buy shares of Yahoo, Facebook, and Google to enhance is competitive advantage. They recently invested in Facebook, buying 1.6% shares of this leading social networking site. It paid $240 million dollars just to outbid its competitors and broaden its strategy. Microsoft has also been thinking of pursuing Google at a later date and has increased its investment in MSN and other such online businesses to 1.6 billion. (20)

Price Differentiation

People are under the misconception that they have a better competitive advantage if they can sell something cheaper. However, price is just one factor and therefore Microsoft grew not by making a better mainframe, but by helping to create the next wave, personal computers.(Linux vs. Windows Vista vs. Leopard).

If Microsoft does not find a way to become agile and customer focused again it will clearly be on the long slow path that IBM has been known to blaze.



Vista vs Other Competitors
Vista vs. Linux

There are three main things that make Linux of more convenient use than Windows, its affordable, customizable, and requires much less hardware space.

1) Linux is very affordable. Despite what Microsoft’s website might suggest, Linux is much cheaper than Windows in many aspects, whether it be for server or desktop use. Microsoft allows a single copy of Windows to be used on only one computer. In contrast, once you have purchased Linux, you can run it on any number of computers for no additional charge. (4) Its no wonder that many users that have any knowledge of computer coded language are choosing Linux over Windows.

2) Linux is customizable The users can format Linux to perform the same functions as Windows without the complications and restriction which arise from Vista. It gives you the convenience of changing the entire desktop if you don't like the way it works. Windows on the other hand confines users to using a preset desktop. Linux works on more hardware, from 486 processors to the latest Pentium 4s. (5) Thus Linux is much more customizable and adaptable to users needs then Windows.

3) Linux takes up less space One Gigabyte is the memory recommended by Microsoft for running Vista. Users have found though, that it’s impossible to run it on 1 GB without suffering problems. Vista needs at least 64 MB videos RAM and takes up at least 6 GB of disk space. (6) Vista’s consumption of memory often results is slow operations. It takes approximately 8 more seconds to start up, then Windows XP and that’s without any additional application running. (4) Also even the simplest features tend to use up ridiculous amounts of memory. According to brajeshwar.com, “Vista uses 256MB of memory just for screen rendering!”

Vista vs. Leopard

History: Apple started a new trend with the introduction of the first PCs in 1946, but ended up lagging behind its other competitors. (1) Despite its success with iPhones and iPod it just could not compete with companies like Dell and Hp when it came to PC’s. One of the major problems was that people were too used to using windows as their primary operating system (Konnana’s strategy of locking in customers). Real change came about in 2007 with the introduction of leopard. Apple's sales skyrocketed by 42 percent between the second quarter of 2006 and the second quarter of 2007. (Bad BUZZ) One of the primary reasons for its success was customer dissatisfaction with Vista.

Features: Leopard’s new user interface, enhanced research, and Time Machine-data recovery system among other features have swayed consumers away from Windows. (2) According to Michael Gartenbero the research director for personal technology, “…when you see Time Machine in action you begin to understand how powerful this application really is. It is certainly the coolest software I have seen in a long time.” (3) It remains to be seen what strategy Microsoft employs next, because Apple and Linux are winning over many of Microsoft’s customers.

Efforts for Improvement and Future Prospects
One of the original goals with the inception of Windows Vista was to reengineer the product to avoid security problems that customers had been having over the last several years. These included improved administrator password entities, a more secure version of Internet Explorer, improved power management capabilities and ease of use. With these, however, consumers ran into many problems such as slow running time, issues with application compatibilities, and other complications with using the new system. (10) To improve upon these issues, Microsoft issued a series of updates and applications and are now trying to improve efficiency while working on their brand new operating system.

Vista Updates and Applications:

Within a year after its release, Microsoft released a series of online updates to improve universal issues of reliability and compatibility. These included performance enhancements that improve battery life. (13) A lot of these updates also included bug fixes and others that increased speed and performance.It is also now capable of supporting nearly twice as many hardware products than at the time of its release. (11)

Several concepts for improvement have also been introduced to integrate into Vista itself. One such example was the integration of “payments as a service” into Vista to lure small businesses back to its products. With this service, small business owners are able to access PASS, payments as a secure service, with a unique bundling of capabilities, published online at the PASS commerce center through Microsoft Vista. (9) Another application was the Easy Jet Window’s Vista. The gadget sits on the desktop of personal computers running the Vista operating system and automatically updates the user with information from an airline's website. It also provides flight information along with links to destination information, allows the storage of different journey details, and can be used to access several travelers’ information. (15)

Windows 7:

Along with these improvements and additions to Windows Vista, Microsoft is now working on a whole new operating system, Windows 7. This system, expected to be released in June 2009, is designed to be swift, feature packed, and built for entertainment and enterprise. While still very vague as to the exact features Windows 7 will bring, Sinofsky, leader of this project, says a major team goal is to “promise and deliver”. A beta version called Milestone 3 is expected to be released by year-end, however the final Windows 7 product is not expected to release until late 2009 or 2010. Though it took five years to roll Windows Vista out to consumers, this more ambitious schedule is implemented thanks to Steven Sinofsky, who is known for his rigid work ethic in releasing new versions of Microsoft Windows on a regular basis. So far, Windows 7 is supposed to feature multi-touch screen technology. The new interface is supposed to feature a ribbon toolbar throughout and a live migration feature to the virtualization capabilities. This new system is reported to be a more modular system with performance boosts as well as quick install features. (7) On the Engineering Windows 7 blog, Larry Osterman, one of the experienced developers on the Windows team talks about the dramatic differences in the organization of developing Windows 7 as compared to Vista. Using improved cross-functional systems, Microsoft is better organized to more efficiently engineer its new system. He states, “The experience of building Windows 7 is dramatically different from the experience of building Vista. The rough outlines of the product development process haven’t changed, but organizationally, the Windows 7 process is dramatically better… For Windows 7, management decided to alter the engineering structure of the Windows organization...Instead of being fairly hierarchical, Steven has 3 direct reports, each representing a particular discipline: Development, Test and Program Management.”(8) He goes on to explain the improved efficiency and success in developing Windows 7 compared to Vista and processes in the past. “Not only were teams allowed to see more about what was happening in the planning process, but because management introduced standardized reporting mechanisms across the product, the leads at every level of the hierarchy were able to track progress against plan at a level that we’ve never had before.” (8) This shows the improvements Microsoft is making even in the business structure itself.

Microsoft is still hopeful for more support for its Vista product. Looking at past trends, XP was slow to catch on when it was first released and now holds widespread support. Vista is expected to gradually gain support as the fact remains that consumers resist change and are slow to acclimate to these new systems. (12)

Integrating Class Learning
When looking at this case, it is very interesting to observe how the various actions of Microsoft and its competitors directly relate to class concepts. By making these connections, a better understanding of business processes and different theories can be ascertained, and the value of applied knowledge is invaluable to class learning. In the particular circumstances of this case study, various aspects dealing with Vista relate to several class concepts, including Complex Adaptive Systems, Robust Adaptive Strategies, and Porter’s Model of Industry Structure.

Complex Adaptive Systems (CAS)

CAS is a collection of diverse elements that are capable of learning and co-evolving and that also possess the ability to spontaneously self-organize. For instance, even though Microsoft is obviously the main player in the operating systems field, Linux, a very small and upstart agent, was able to affect the focus of Microsoft. By seizing on the opportunity of Vista’s poor reception, Linux was able to steal away customers from Microsoft by offering them a product that is both customizable and affordable. This proves the characteristic of CAS that any small agent can have an impactful influence on the whole system. Also a huge part of CAS, positive and negative feedback loops can affect a company’s decisions and directions. This concept is clearly seen in Microsoft’s response to the negative opinions it received after launching Vista. In order to resolve the problems, Microsoft took the criticisms as things to improve and work on, and in addressing these issues, they will be able to offer an improved product.

Robust Adaptive Strategies (RAS)

RAS is the plans, methods, or series of maneuvers or stratagems used in the attempt to obtain specific goals that result out of CAS. The strategies of Microsoft must reflect the characteristics of CAS in order to produce a meaningful result. For instance, in realizing that a small agent can affect a large change in the system within which it operates, Microsoft must continue to evolve and offer newer and better products every year. In doing this, Microsoft can reestablish dominance over the smaller agents and belittle the potential impact they can have. Also, Microsoft must consider the things which give them comparative advantage and use those things to advance their goals and mission. However, they must not be close-minded to change and must show an aptitude for adapting to and embracing change. To do this, they must value the knowledge, time, and skills that human capital bring to the table, deploy various innovations, and take some risks despite the uncertainty of return.

Porter’s Model of Industry Structure

According to Porter’s Model, five competitive forces determine industry profitability: bargaining power of customers and suppliers, the threat of substitutes and new entrants, and rivalry between existing firms. These different forces have a varying impact on a firm, based on the differing advantages of companies involved within the rivalry. For Microsoft, the bargaining power of customers proved to be a strong force as the consumers responded negatively to Vista’s launch. The negative response and poor results of Vista in the market have led to Microsoft being forced to change their strategy, even considering constructing a new operating system. Also, the threat Linux and Leopard have posed as they have become viable options across a wider range of customers has caused Microsoft to alter their direction. Now, Microsoft is not as dominant a force in the market and must play within the rivalry to compete with its competitors. It must continue to adapt to change to remain attractive to consumers. Otherwise, it will be replaced with other, more appealing options.

Work Cited
1) http://www.technewsworld.com/story/50236.html

2) http://www.laptopmag.com/review/software/leopard-vs-vista.aspx

3) http://web.ebscohost.com.ezproxy.lib.utexas.edu/bsi/pdf?vid=4&hid=113&sid=6bda528b-1c8e-4e4e-8528-5d5671538180%40sessionmgr104

4) http://www.michaelhorowitz.com/Linux.vs.Windows.html

5) http://www.pcworld.com/article/104693/linux_vs_windows_the_rematch.html

6) http://brajeshwar.com/2008/choose-linux-over-windows-vista/

7) “Watching for Windows 7”. Network World; 9/29/2008, Vol. 25 Issue 38, p15-15, 1p. http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=34622753&site=bsi-live

8) “Engineering Windows 7” http://blogs.msdn.com/e7/

9) "Counting on Vista and ‘payments as a service’ concept to lure small businesses." ABA Banking Journal 99.5 (May 2007): 56-56. Business Source Complete. EBSCO. 26 Sep. 2008. http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=25083187&site=ehost-live

10) Taking in a Stunning New Vista” http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=32639861&site=bsi-live

11) “Vista Turns 1; Users’ Attitudes Mixed”. Industrial Engineer: IE; Mar/Apr2008, Vol. 40 Issue 3/4, p15-15, 1/3p. Business Source Complete. EBSCO. 15 October 2008. http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=31292939&site=bsi-live

12) Vista May Still Have Its Day. Lai, Eric. Computerworld, 8/25/2008, Vol. 42 Issue 34, p10-11, 2p http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=34157994&site=bsi-live

13)“Grappling with the Challenges of Vista’s Battery Life”. VAR Business. May2008, Vol. 26 Issue 5, p90-90, 1p. Business Source Complete. EBSCO. 14 October 2008. http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=32531065&site=bsi-live

14)“Microsoft Updates Vista in Bid to Boost Speed, Reliability”. Keizer, Gregg. Computerworld; 8/13/2007, Vol. 41 Issue 33, p10-10, 1/2p. Business Source Complete. EBSCO. 15 October 2008. http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=26220002&site=bsi-live

15)“EasyJet puts gadget onto Vista desktops”. Farber, Alex. New Media Age; 7/26/2007, p10-10, 1/4p. Business Source Complete. EBSCO. 15 October 2008. http://ezproxy.lib.utexas.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=26069858&site=bsi-live

16)Mehta, Dharmesha M., Seseri, Rudina I., and Yoffie, David B. “Microsoft in 2005.”  Harvard Business School Case, June 29, 2005.

17) Picture: http://en.wikipedia.org/wiki/Windows_Vista

18) Picture: http://en.wikipedia.org/wiki/Microsoft

19) "Apple vs. Linux vs. Leopard." http://www.technewsworld.com/story/50236.html?wlc=1224451078

20) "Microsoft Invests $240 million in Facebook." http://www.msnbc.msn.com/id/21458486/

21) Ellis, Stephen. “Seinfeld Can’t Fix Cracks in Windows”. The Australian (9 September 2008). Newspaper Source. 25 September 2008.   