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What's the Matter With Microsoft?

By: George Anders
Everything Microsoft touches, it eventually does brilliantly. When it comes to products, strategies, and sales growth, Microsoft sets the standard for performance. So why aren't we willing to trust Microsoft with all of our private information?

How would you feel about a business partner that described itself like this: "I'm an enormous company that has established market-leading products in one category after another for the past 25 years. I'm relentless. You can't pin me down. My strategy is always evolving. I've used software and Internet technology to bring incredible efficiencies to the business world, and I'm not done yet. Sure, I've got critics. But none of them -- not even the U.S. government -- has ever really slowed me down."

That's Microsoft's profile, and most of the time, it's what we want. We may grumble about glitches in its software or about its hardball tactics with competitors. But when we want to create a document, do financial modeling, use email, or visit Web sites, we turn to Microsoft Word, Microsoft Excel, Microsoft Outlook, and Microsoft Internet Explorer. Those are the facts.

In truth, we rely on Microsoft products in the same way we rely on the 6 o'clock news or the interstate-highway system. It's a basic part of our life. The more time we spend with these mainstays, the harder it is to imagine putting our lives together any other way.

But Microsoft is having a rocky time getting people to embrace one of its boldest new ideas: that we should entrust our electronic identities to its Passport service. And the company's woes speak to a bigger issue: the very big difference between mass acceptance and public trust. Microsoft has the first. But it's still a long way from figuring out how to win the second.

Trust in any form doesn't come easily, and that's especially true online. Most of us are wary about letting someone create a permanent registry of our passwords, credit-card numbers, and other personal data that can be called up when we shop and browse online. We're doubly suspicious if it involves confiding in a company as powerful, smart, and expansion minded as Microsoft. All of a sudden, the traits that usually work in Microsoft's favor are outright alarming.

A perfect illustration of this schism in people's attitudes occurred earlier this year at the Demo 2002 new-technology conference in Phoenix. During the conference, attendees -- mostly high-powered fans of technology -- were asked whether they used Microsoft products. Just about everyone raised his hand. Then they were asked whether they trusted Microsoft enough to enroll in Passport. Almost no one raised her hand.

"People are only signing up for Passport because they have to," says Avivah Litan, an analyst at Gartner Inc. In a recent marketplace survey, she found that 84% of Passport users say that they participate primarily because enrollment is necessary in order to use other Microsoft services. And even among people who use Microsoft's MSN Internet service -- presumably an especially loyal group of customers -- a full 23% say that they do not trust Microsoft with their personal or financial information.

It wasn't supposed to be like this. Several years ago, Microsoft executives figured that they could do consumers a favor by coming up with an all-purpose way to register people for Web sites. Type in your mailing address just once, and it could be shared automatically with your online bookstore, your online travel agent, and your college alumni association's Web site. Credit-card information, email preferences, and passwords could be shared the same way, among participating Passport Web sites.

From Issue 59 | May 2002

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