A smart(ass) marketing professionals can find opportunity in adverse situations. So in an effort to atone for my occasional (perpetual) jabs at Microsoft and Vista, I offer the following observations of two bad realities that Microsoft can leverage for future success.
First off is a news story that likely increased Steve Balmer’s scotch intake. Sales reports concerning Microsoft’s “client revenues” (i.e., operating systems) are dismal with Vista being the worst of their offerings. Despite being the defacto OS on nearly every new laptop and desktop sold domestically, client revenues grew a measly 2% in the last quarter. This dismal sales rate occurs despite PC sales being up as much as 12%.
Many factors are responsible for this. Naked hostility to Vista is one. Asians adopting Linux is a growing threat to Microsoft. People opting for the cheaper and more resource-friendly XP is another factor.
Theft is a problem too. Or at least it was.
Microsoft is raising the wrath of certain Chinese PC users who have taken full advantage of that country’s nonexistent intellectual property (IP) enforcement. These folks happily buy illegally burned copies of Windows from street vendors for about $1 a copy, barely more than the cost of CD duplication. So Microsoft has activated “Genuine Advantage” control mechanisms, which are an advantage only to Microsoft. The validation engine inside of Windows disables computers with unlicensed copies of Windows.
Some Chinese computer users are ticked. One enraged thief with limited cognitive capabilities said “Microsoft has no right to control my hardware without my agreement,” missing entirely that his computer now works exactly as it should when there is no licensed operating system installed. Another ex-PC users astutely noted “If the price of genuine software was lower than the fake one, who would buy the fake one?”
It is tough to sell software for less than a buck a copy, but Microsoft is trying to leverage China’s demand by lowering prices on their software. They dropped the price of Vista in China to $73. I’ve used Vista and by my estimation that price is about $74 too high (someone needs to compensate me for all the extra hardware I had to buy).
Herein lays the opportunity for Microsoft. Globally they should enforce the licensing on XP and not on Vista. In other words they should encourage theft of Vista in the short run, until such time as the suffering masses of humanity have acclimated themselves to the new OS. Once enough people have been forced by circumstances and unconscionable frugality to adopt Vista, then others will reluctantly pay for the operating system in order to achieve compatibility with the rest of the word.
Face it — nobody in their right mind would pay for Vista now, so Microsoft might as well give it away to seed the market.