What's the Matter With Microsoft?

A more conservative gauge of Passport's acceptance comes from Gartner's Litan. She counts 14 million active Passport accounts these days, up from 7 million last fall. By "brute force," she says, Microsoft has been able to double its Passport user base in less than a year. Yet it hasn't been able to convince consumers that they really are better off for it.

In her latest survey, Litan found that just 8% of Passport users said that they signed up for the service primarily because it let them avoid reentering credit-card data. All of 2% said that they signed up for Passport primarily because it eliminates the need to have multiple IDs and passwords. "Is this really the killer app?" she asks wryly.

If Microsoft hasn't yet won our loyalty, do people want someone else to manage their online identities? When Litan asks consumers that question, she finds that banks get the highest endorsement, with support from 47% of the public. In contrast, Microsoft gets a mere 12% of the vote. Yet that's still ahead of the ratings for AOL, Yahoo, and telephone-service providers, all of which are at 6% or less.

The implication: If big institutions are going to know about us online, we would prefer to deal with outfits that have handled that trust relationship competently in the physical world for a long time. That's more palatable than putting our faith in technology companies that are diversifying into this new area.

What's behind that aversion to the newcomers? We know how banks behave, and their stodginess over the years is an outright virtue. Once we place our trust in them, they aren't as likely to surprise us. We don't know nearly as well how Microsoft or other technology companies will behave in the future. As a result, it's easier to get worried about ways that our data might be misused -- and harder to believe that any assurances today from Microsoft or other such companies really will hold true for decades to come.

"Lots of people want to pick a bone with Microsoft," says Craig Mundie, Microsoft's chief technical officer. "They'll attack us on the basis of what they think we might do -- completely independent from what we've said we will do." A big part of Mundie's job, in fact, involves appearing at conferences in an effort to try to convince attendees that Microsoft isn't as menacing as they might think.

In a recent white paper on trustworthy computing, Mundie drew parallels to the ways that Americans in the early 20th century slowly came to trust electrical appliances, after worrying that this new source of power in the house might be lethal. And in philosophical moments, senior Microsoft executives acknowledge that trust can only be won gradually, over a decade or longer. It's foolish to think of storming the "marketplace in trust" in the same way that Microsoft might roar into so many other markets. Trust is won (or lost) through small gestures over an extended period of time -- small gestures that consumers subject to microscopic scrutiny. It remains to be seen whether microscopic scrutiny and Microsoft go together.

George Anders (ganders@fastcompany.com) runs Fast Company's West Coast bureau from San Francisco. Find a catalog of his columns here.