From: mike 


http://www.theinquirer.net/default.aspx?article=39087

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WITH TWO OVERLAPPING events, Microsoft admitted what we have been saying
all along, Vista, aka Windows MeII, is a joke that no one wants. It did two
unprecedented things this week that frankly stunned us.

Dell announced that it would be offering XP again on home PCs. The second
that Vista came out, Microsoft makes it very hard for you to sell anything
other than MeII. It can't do this on the business side because it would be
laughed out the door, but for the walking sheep class, well, you take what
you are shovelled.

This is classic abusive monopoly behavior, Microsoft wrote the modern book
on it. It pulled all the major OEMs in by twisting their arms with the
usual methods, and they again all fell into line. Never before has anyone
backpedalled on this, to do so would earn you the wrath of Microsoft.

But Dell just did. This means that MeII sales are at least as bad as we
think, the software and driver situation is just as miserable, and Dell had
no choice but to buck the trend. If anyone thinks this is an act of
atonement for foisting such a steaming pile on us, think again, it doesn't
care about the consumer.

What happened is the OEMs revolted in the background and forced Microsoft's
hand. This is a big neon sign above MeII saying 'FAILURE'. Blink blink
blink. OK, MeII won't fail, they have OEMs whipped and threatened into a
corner, it will sell, but you can almost hear the defectors marching toward
Linux. This is a watershed.

The other equally monumental MeII failure? Gates in China launching a $3
version of bundled MeII. Why is this not altruism? Well, it goes back to
piracy and how it helped enforce the MS monopoly. If you can easily pirate
Windows, Linux has no price advantage, they both cost zero.

With MeII, Microsoft made it very hard to pirate. It is do-able, you can
use the BIOS hack and probably a host of others, but the point is, it
raised the bar enough so lots of people have to buy it. Want to bet that in
a country with $100 average monthly salary, people aren't going to shell
out $299 for MeII Broken Edition?

What did MS do? It dropped the price about 100x or so. I can't say this is
unprecedented, when it made Office 2003 hard to pirate it had to backpedal
with the student edition for about $150. This time though, things are much
more desperate.

If you fit Microsoft's somewhat convoluted definition of poor, it still
wants to lock you in, you might get rich enough to afford the full-priced
stuff someday. It is at a dangerous crossroads, if its software bumps up
the price of a computer by 100 per cent, people might look to alternatives.

That means no MeII DRM infection lock in, no mass migration to the newer
Office obfuscated and patented file formats, and worse yet, people might
utter the W word. Yes, you guessed it, 'why'. People might ask why they are
sticking with the MS lock in, and at that point, it is in deep trouble.

So, it did the unthinkable, and dropped the price. I won't bother to hunt
down all the exec quotes saying how people can't afford clean water would
be overjoyed to sell kidneys to upgrade to the new version of Office, but
they are out there. This was a sacred cow, and it is now hamburger backed
up against the wall.

These two actions by Microsoft are proof of what I suggested three years
ago. Microsoft has lost its ability to twist arms, and now it is going to
die. It can't compete on level ground, so is left with backpedalling and
discounts of almost 100 times.

What we are seeing is an unprecedented shift of power. It is also an
unprecedented admission of failure. And the funniest part about the moves
made? They are the wrong things to do. Microsoft is in deep trouble. æ
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 /m

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