On Microsoft's Mismanagement of Its Operating System Dominance

I've contended for at least two years, as noted in this May, 2006 post, that Microsoft would do its shareholders a service by breaking itself up into at least 3-4 pieces: operating systems, desktop applications, gaming, and online/advertising.

Now, in Wednesday's Wall Street Journal, technology columnist Lee Gomes provides more examples of how Microsoft's integrated businesses model has badly served customers in ways that almost certainly means it has also hurt shareholders.

Gomes' clever article was entitled "Dear Windows 7 Programmers, I Have a Few Ideas..." In it, he sends up some of XP's and Vista's worst faults.

Among his priceless quotes are,

"SKU stands for "stock keeping unit," and one of Microsoft's most baleful decisions for Vista was to wring from it as many SKUs as possible. Thus was born Vista Home, Vista Professional, Vegetarian Vista, etc. Each successive version had more features and, naturally, a bigger price tag.

Whatever incremental revenue Microsoft raised with this ploy couldn't possibly have been worth the confusion and ill-will it engendered. A certain technology columnist who will here go unnamed because I don't want to embarrass myself, once spent a lengthy session with Microsoft tech support trying to get my Vista to see a disk drive. Only well into the process was it discovered that the requisite "dynamic disk" feature wasn't in that particular SKU.

If society is going to be inflicted with an operating-system monopoly, society might at least get the benefits -- especially the one where everyone shares a common base of the same software. The Vista SKU epidemic gives us the worst of both worlds: software silos combined with a single big supplier.

Open-source software such as Linux is traditionally seen as the opposite of proprietary software from the likes of Microsoft and Apple. But that's a false dichotomy. Why can't Windows be proprietary, for-profit and copy-protected -- while at the same time be open for user control and inspection? If Windows were a car, you'd never be able to open the hood and see what was underneath.

OK, a cheap shot, I know, but just last week, I installed the new Service Pack 3 for XP, only to see my brand new Internet Explorer 7 crash in the first two minutes of use. Granted, I was doing something especially demanding -- surfing from one Web site to another one -- but still, I expected better.

It's well-known that massive teams of programmers are the worst thing possible for good software because they make the process so bureaucratic. But if a small team is what's needed to make Windows 7 great, then Microsoft is big enough to spend whatever it takes to build a team smaller than everyone else's."

I've felt for years that, no matter what else their market share dominance in desktop operating systems, Microsoft's arrogant attitude to issues such as Gomes mentions has caused them to have a customer base that actually loathes the company and its products.

That just can't be good. Dealing with your computer's Microsoft operating system is almost as bad as dealing with your- or my- bank. And if you've read my recent columns about that, you know it's not a good thing.

Would an independent operating systems group treat customers as badly as the current Microsoft unit does? As I saw at the old, integrated ATT of nearly three decades ago, I believe Microsoft's operating system group management is sub-optimized in favor of helping its fellow divisions- applications, gaming and online. Thus, rather than do what is the best thing for paying customers of operating systems, the group probably does what is best for maximizing overall Microsoft profits.

How differently would you or I expect a separate, standalone MSFT operating systems company to behave?

As Gomes notes, it might not lock the hood on your operating system, preventing you or anyone else from easily diagnosing problems in the software you now own.

Or maybe they'd go directly to the subscription model, similar to anti-virus vendors. That way, you'd enjoy more smooth, continuous updates and fixes to the software. And perhaps even some better online or on-system diagnostic tools.

For nearly every computer user to loathe buying a new machine, as I do, because of the trouble we know we're in for when we 'upgrade' to a new operating system must mean that we'd pay more for a better situation. Or the same to at least have something less awful.

If Microsoft's CEO's inability to manage the firm to consistently outperform the S&P500 over the past few years doesn't clue you in to the firm's problems, maybe knowing how much customers hate the firm for the necessity of buying its operating systems on their new PCs will.