Friday, March 28, 2008

Microsoft's chickens are coming home to roost

From the article "Study sees Microsoft brand in sharp decline".
Microsoft's brand power has been in sharp decline over the past four years, an indication the company is losing credibility and mindshare with U.S. business users, according to a recent study by market research firm CoreBrand.

According to the CoreBrand Power 100 2007 study, which polled about 12,000 U.S. business decision-makers, Microsoft dropped from number 12 in the ranking of the most powerful U.S. company brands in 2004 to number 59 last year. In 1996, the company ranked number 1 in brand power among 1,200 top companies in about 50 industries, said James Gregory, CEO of CoreBrand.
...
Gregory said that a decline in and of itself is not indicative that a company is losing its mindshare or reputation among customers. However, what's significant in Microsoft's case is that the decline has been consistent over a number of years, and has plunged dramatically in a brief time.

"When you see something decline with increasing velocity, it's a concern," he said.
...
Gregory could only speculate as to why Microsoft's reputation has been declining, since his firm does not ask people that specific question. He said the "underwhelming" response to Windows Vista might be one reason, and Apple's clever "I'm a Mac, I'm a PC" advertising campaign -- which paints Windows in an unfavorable light -- may be another.
Let's look at the recent history of Microsoft for some possible answers. Note that what follows is incomplete, but it's a good start to building a bad taste in one's mouth.
  • 1993 - In August the Department of Justice opens an investigation into whether Microsoft is abusing its monopoly in operating systems.
  • 1994 - On July 15 Microsoft settles with the Department of Justice and consents not to tie the sale of other Microsoft products into the sale of Windows. Microsoft was free to continue to integrate "new features" into Windows. Microsoft would use that hole to integrate Internet Explorer in the coming years.
  • 1995 - Sun releases Java 1.0 and the HotJava browser on May 23. Mark Andreessen of Netscape announces during the festivities that the Netscape Navigator browser would include a Java Virtual Machine. Netscape IPOs on August 9. Netscape's shares start at $14 and finish the first day of trading at $75. Microsoft releases Chicago, i.e. Windows 95 August 29. Microsoft is already aware of Netscape Navigator's threat to commoditize the operating system, and begins to work on its own browser, Internet Explorer. Version 1 was released as a part of the Windows 95 Plus Pack. Internet Explorer 2 is released in November with support for Windows 95 and the old Macintosh operating system.
  • 1996 - In March Microsoft licenses Java from Sun, which sews the seeds for a future Sun/Microsoft lawsuit over Microsoft's Window-specific extensions to Java. This is another expression of Microsoft's embrace, extend, and extinguish philosophy towards all competitors. In August Internet Explorer 3 is bundled with Windows for the first time with the release of Windows 95 B (OSR2). Microsoft is ranked number 1 in brand power.
  • 1997 - In August Microsoft releases Internet Explorer 4 for Windows 9x and NT 4. Bundled with IE 4 is Microsoft's latest version of Java, supposedly based on Java 1.1. October 7, Sun files a lawsuit against Microsoft over Microsoft's implementation of Java. Microsoft's implementation fails to implement two key interfaces, RMI (Remote Method Invocation) and JNI (Java Native Invocation). In addition Microsoft has modified the Core Java class libraries with the addition of 50 methods and fields that are not a part of the public Java API. As a consequence any developers making use of Microsoft's extensions will create Java applications that will not operate properly on other JVM implementations, and implementations that depend on RMI and JNI will fail to operate properly on Microsoft's JVM. Microsoft's Java implementation has effectively broken 'Write Once Run Anywhere' (WORA). Sun's lawsuit is its final attempt to force Microsoft to bring its JVM into compliance.
  • 1998 - In January Netscape offers Navigator 4 for free and makes Navigator's source open via the Mozilla Project. Netscape also lays off a large number of employees due to poor performance, especially against its chief competitor Microsoft. In May the Department of Justice and 20 state Attorneys General sue Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. Microsoft releases Windows 98 on June 25. Internet Explorer 4 is now fully integrated with the operating system, specifically the GUI and file manager. In September Microsoft released Internet Explorer 5. In October the Department of Justice also sues Microsoft for violating the 1994 consent decree by bundling IE 4 with Windows. On November 24 AOL announces it will acquire Netscape Communications for a stock swap valued at the time at $4.2 billion. This 'purchase' is seen in time to a large waste of money on AOL's part, and eventually contributes to AOLs future fall from grace within Time Warner. Because Netscape is dead, Microsoft no longer feels competitive pressure. It's Internet Explorer release schedule slows drastically. It will not release another version of Internet Explorer until 2001.
  • 1999 - Microsoft releases Windows 98 Second Edition (SE). This version is a bug-fix of Win98, and is considered by many to be the most stable Win 9x release. On November 5 the presiding judge over the Microsoft trail, Judge Jackson, releases his findings of fact. In it he states that "Microsoft's dominance of the personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to the monopoly, including Apple, Java, Netscape, Lotus Notes, Real Networks, Linux, and others."
  • 2000 - In February Microsoft releases Windows 2000. On April 3 Judge Jackson issues a two part ruling. His "conclusions of law were that Microsoft had committed monopolization, attempted monopolization, and tying in violation of Sections 1 and 2 of the Sherman Act, and his remedy was that Microsoft must be broken into two separate units, one to produce the operating system, and one to produce other software components." On September 26 Microsoft attempts an end-run on the ruling by sending their appeal to SCOTUS. SCOTUS refuses to hear it, instead sending it back to a federal appeals court. In July Microsoft releases .Net 1.0 pre-beta. Originally code-named COOL (C++-like Object Oriented Language), .Net and C# in particular is Microsoft's answer to Java. In August the European Union widens its anti-trust case against Microsoft based in part on anti-competitive complaints from Sun Microsystems. It is, at the time, the third action brought against Microsoft in Europe. In September Microsoft releases Windows Millennium Edition (Me). An update to Win 98 as well as a stopgap on the way to Windows XP, it was so filled with bugs and instalbility that it was also referred to as the Mistake Edition.
  • 2001 - In January Sun settles its lawsuit with Microsoft. Under the terms of the lawsuit "Microsoft will pay $20 million to Palo Alto, Calif.-based Sun, terminate all Java licenses, and agree to a permanent injunction against the use of the Java Compatible logo." Microsoft cannot use Java within .Net nor j#. Microsoft can continue to sell existing code based on Java 1.1.4. Meanwhile the D.C. Circuit Court of Appeals overturns Judge Jackson's remedies in part due to interviews Judge Jackson gave regarding the trial. Judge Jackson in turn responded by saying that "[Microsoft executes] proved, time and time again, to be inaccurate, misleading, evasive, and transparently false. ... Microsoft is a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect. It is also a company whose senior management is not averse to offering specious testimony to support spurious defenses to claims of its wrongdoing." In May Microsoft begins development of Longhorn, the future Vista and next release of Windows. In October Microsoft releases Windows XP, the version that combines the Win 9x line with the Windows NT line. This release met with considerable criticism, in particular due to security holes, requiring Microsoft to release two service packs to address (SP1 and SP2). It wasn't until the release of SP2 that Windows XP was widely deployed, especially in business. Internet Explorer 6 was also released along with Windows XP. In September the Nimda worm begins to spread as an email attachment. Users of IE 5 and 5.5 are infected simply by reading the email. It certainly isn't the first, but it signals the sophistication (if you will) of virii writers and illustrates just how extensively and quickly a worm can spread across Windows clients and servers. Also in September the Department of Justice announces it is no longer seeking to break up Microsoft. In November the DoJ seeks a settlement with Microsoft. The monopoly conviction stands, but the remedy now consists of Microsoft opening its APIs to the world and of appointing a three-person panel to oversee compliance. The biggest victory for Microsoft is that Microsoft can still tie other software with Windows in the future under the rubric of "innovation".
  • 2002 - .Net 1.0 is formally released in February. Windows XP SP1 is released. Not much changes with Windows XP, and uptake is still slow. Most users, especially business, prefer to continue using Windows 2000. In November the government accepts the final resolution in the Microsoft antitrust case. Nine states (California, Connecticut, Iowa, Florida, Kansas, Minnesota, Utah, Virginia and Massachusetts) and the District of Columbia do not agree with the settlement, stating it does not go far enough.
  • 2003 - A big year for Windows worms, starting with SQL slammer in January that dramatically slowed down general internet traffic until it was finally found and removed on most systems, continuing with Blaster, Sobig, and Sober and many others. Longhorn was supposed to ship late this year. It does not. Instead many of the Longhorn/Blackthorn developers are re-tasked to enhance the security of Windows XP and Windows Server 2003, which was released in April.
  • 2004 - More Window worms. January opens with MyDoom, the fastest spreading mass-email worm evah. In May we get Sassar, which winds up bringing a number of companies to their knees. In March Microsoft is hit with a record $613 million fine by the European Commission for abusing its "near monopoly" with Windows. In July Microsoft pays the fine, placing the money in escrow while Microsoft continues to appeal the ruling. August arrives with the delivery of Windows XP SP2, and the widespread adoption of Windows XP, introduced two years earlier, finally begins. At the same time Microsoft announces it is revising its plans for Longhorn. The original Longhorn code base, based on Windows XP, is scrapped, and development essentially starts anew with the Windows Server 2003 SP1 code base. A key feature, highly touted since the mid-90s under other names, called WinFS, is postponed (and eventually dropped). The scope and sweep of Longhorn features are pulled back across the board. This is also the year that Microsoft decides to finally get serious about Windows security.
  • 2005 - Longhorn is named Vista in July. A comprehensive Vista beta program is started. Also in July Microsoft releases a media-player-free version of Windows XP for the European market in an effort to placate the EC with as little effort as possible. The EC is not amused, and in December threatens to start fining Microsoft 2 million euros/day until Microsoft starts giving rivals more access to its systems. Meanwhile, in October, Sony is found to have distributed Windows root kits with its music CDs in an effort to keep purchasers of its CDs from ripping songs from those CDs. In November Sony tries to 'fix' the problem with a removal kit that is as bad as the original root kit. Sony eventually recalls all affected (infected) CDs. The problems with the Sony root kit fiasco are many; it's poorly written, allowing for other malware to piggy-back on the Sony root kit, forcing the Department of Homeland Security to issue an advisory calling Sony's root kit a security threat. Although technically not Microsoft's fault, the root kit is easily installable due to security design flaws in Microsoft Windows which have not been fully addressed up to this point. And just in time for Christmas, Microsoft launches XBox 360, beating Sony and Nintendo to market with a next generation game console.
  • 2006 - In February Windows Vista CTP is released. It is considered feature complete at this point. In March Microsoft announces that it will push the release of the consumer version of Vista to January 2007. In November Microsoft releases Vista to key business users. Meanwhile, XBox 360 consoles are beginning to fail early and fail often. Some are estimating that failure rates are as high as 30%, which is 10 times the industry standard. The standard XBox 360 failure mode has a name: the Red Ring of Death. In November Microsoft releases its answer to the iPod, the Zune. Many take note of Microsoft's draconian DRM practices, in particular the three-day or three-play rule. The Zune has built-in WiFi, and uses it to allow transfer of songs between Zunes. The only problems are the three-day/three-play rule and the fact that it's applied to every song that's transfered, not just songs purchased from Microsoft. Further, Microsoft, by creating the Zune and the Zune Marketplace, has in one fell swoop cut off all previous partners of its "Plays For Sure" music initiative. Zunes are interesting at first, but as the truth spreads via the web, interest drops markedly.
  • 2007 - Windows Vista is released. Controversy immediately erupts about PCs labeled as "Windows Vista Capable". Tagged earlier in 2006 in order to help sell new systems over the 2006 Christmas holiday, punters now have their shiny new Vista to install, only to discover that Vista Capable is not good enough, and in most cases won't run what many believe Vista should provide - the Aero interface. Bill Gates claims that they have sold over 40 million copies of Vista, nearly double what they sold of Windows XP, during the same period. There's just three problems with this; computer manufacturers are now selling twice as many machines as they did back in 2001 when XP was released, many users (especially business) are actually having Vista replaced with Windows XP, electing to keep the Vista license until such time as it's good enough or Vista SP1 is released, whichever comes first, and the majority of the copies are OEM. Regardless the tech press from all quarters is relentless in its harsh criticism about the poor performance and poor hardware (driver) support of Vista, as well as the maddening User Account Control. In June, Microsoft takes a $1 BILLION dollar charge on its income statement to help pay for bricked XBox 360s. And in spite of a Zune refresh, iPod still rules. Microsoft is ranked number 59 in brand power.
  • 2008 - February is a bad month for Microsoft. The Windows Vista Capable lawsuits are granted class-action status. The emails released due to discovery are damning to both Microsoft and Intel; they show that Microsoft executives knew they had a problem with Vista, and that even for them Vista was a sorry excuse. The European Union fines Microsoft a record $1.4 BILLION for defying sanctions imposed on it by the EU for anti-competitive behaviors. It's just the end of March, but 2008 is turning into a banner year for Microsoft bad news. Who knows how low their brand power will sink?
I know I've forgotten many important facts, or just didn't put them in due to my fingers getting tired of typing. You can add them as comments if you like. But when I hear somebody make completely unbelievable and clueless comments such as they don't understand why Microsoft's brand has been in "sharp decline", you just have to wonder what alternate universe they've been living in all this time. I've outlined 15 years (year-by-year, every year) of Microsoft dirty tricks and poor business practices, and I can assure you it ain't just Vista, baby. The question shouldn't be why their brand is in 'sharp decline' but how they've managed to even stay in business. And the answer is their operating system monopoly and the inordinate monetary reward for having it.

Links
  1. Windows Products and Technologies History
  2. History of Microsoft Windows
  3. Windows Vista
  4. United States Microsoft Antitrust Case
  5. .Net Framework
  6. Google results: History of Java
  7. European Union Microsoft competition Case
  8. Windows Bugs
  9. Timeline of notable computer viruses and worms
  10. Anything but speechless; 100 things people are really saying about Vista
  11. Living with Vista, one year on
  12. Tracing Microsoft's Vista Capable Debacle
  13. etc...

3 comments:

  1. I'm not a Microsoft fan by any means, but I have to point out that MS was fined $1.4 billion, in DOLLARS, not Euros. The actual fine was 899 million Euros.

    ReplyDelete
  2. You're right, I had both the dollar sign and euros. Thanks for pointing it out. It's fixed now.

    ReplyDelete
  3. A great post - its put all the things I have read about over the past few years into one post - very lucid - excellent Bill!

    ReplyDelete

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