Should Windows XP Be Your Computing Experience?

After swearing that we would avoid the hoopla and crowds of a major Microsoft announcement, once again we allowed ourselves into being seduced into attending the Windows XP gala in New York City on October 25th.  It was too easy – we were already scheduled to be in New York that day, right down the street. We’d scarcely be able to avoid the XP announcement in any case; Jupiter Media Matrix reports that by announcement day Microsoft had sent out over 500,000,000 on-line ads and that’s in addition to print ads, bill boards, radio, and prime time TV.

You’ve already read about the incredibly tight security, the famous guests, and the Sting concert in Bryant Park.  I won’t be writing about that here.  But old hands do wonder when so many distractions are offered to the business at hand – Governor Pataki and Mayor Giuliani and ex-Mayor Koch (meeting Bill Gates at a Starbucks on Broadway) and Regis Philbin, offering to make Bill a millionaire – whether there isn’t very much of substance to talk about.

Both the partner showcase and the star-studded CEO panel that preceded the actual announcement of Windows XP placed heavy emphasis on the parts of the new operating system that are likely to appeal to consumers, rather than enterprise buyers.  Processing photos and listening to music are very nice, but they’re unlikely to count as part of a Fortune 500’s ROI calculation.  Even the main presentation seemed to be more enamored with the toys than with issues that CIO’s would find persuasive.

Of course, there were lots of references to the greater reliability of Windows XP (and I might be able to write a cost justification for some users just on eliminating the time lost to “the Blue Screen of Death” and rebooting.  In most instances, the much more robust XP avoids the blue screen and, in any case, rebooting is much faster.

What You Get

Users must choose between a Home Edition and a Professional Edition.  For many users, the less expensive Home Edition is more than adequate and entirely appropriate.  Both offer a new and more elegant interface (with the more familiar “classic” version still available), a new OS Kernel, based on NT (all of the DOS underpinnings are now gone) and, therefore, better reliability and performance.  (Performance depends to some extent on what kind of hardware platform you’re prepared to provide.  Microsoft asks for 128Mb minimum memory and recommends 256Mb.  If you are on an older machine (XP really isn’t intended to run on machines more than a few years old) you may choose to turn off some of the interface graphics enhancements to improve performance.).  Microsoft also provides a built-in Firewall and a variety of audio and video toys via the Windows Media Player. 

The Professional (Business) Edition also offers improved systems administration and high-end features geared toward business users.  For consumers and many small businesses, the $99 upgrade price of the Home Edition will be more appealing than the Professional Edition’s $199 price tag.

Conspiracy Theories

There are some commentators (and customers) who are unhappy with the XP announcement and Microsoft because they view the total XP package as yet another example of Microsoft’s aggressive marketing practices.  Actually, Microsoft has toned down some of its original plans in the hope of making the market happy.  For example:

• Smart Tags, which once could have been used to point Internet Explorer users from the web site they chose to one that Microsoft preferred (presumably for commercial reasons) have been removed, at least temporarily.  We’d point out that Smart Tags (which also appear in Office XP) are very useful for in-context information or assistance. 
  
  They are actually available from separate companies already, such as Sentius RichLinks (www.sentius.com) who will sell you an engine for your web site that will provide RichLinks (smart-tag-like extensions, for your annotations) that you can use to add navigation, information, or data to your internal or external web site.  Sentius points out that their RichLinks will work with any browser, something that SmartTags are not intended to do, and are entirely under the control of the web site owner.  On the other hand, they're not free and they'll never be widely distributed in the way an operating system-bundled product might be.  We expect Smart Tags to put in a future appearance.

• Microsoft’s Passport identification and authentication scheme would provide Microsoft with information about its users which it could then provide to sites with whom the user does on-line business (with the user’s permission.  Microsoft would, of course, get paid for its assistance.  This has caused howls of protest from privacy advocates (although it’s mainly optional(some Microsoft features don’t work without Passport registration).  Microsoft changed to a public security scheme (Kerberos) to placate them (they are not soothed).  Sun organized a Liberty Alliance, consisting of many other industry vendors, which intends to come up with a competing identification scheme – maybe next year.  We'll write more about this shortly.

   

What Will The Market Do?

The $64,000 question is what will the market do?  Consumers don’t get much choice.  To the extent that consumers are buying durable goods this fall (or for Christmas, usually a big PC buying season), they will be buying Windows XP (unless they’re buying Apple Macintoshes).  Other versions of Windows vanish from the retail channel as soon as manufacturers start shipping the newest update.

Corporate customers may be another matter.  Many of them have finally settled on Windows 2000 (also an NT operating system) and have just finished implementing it – or are in the midst of a rollout.  They won’t be in the mood to do anything else soon.  Then there is the very cold, hard fact that IT isn’t in a buying mood (except for security, back-up, and support of mission critical projects).  Most corporates would need to buy new PC’s to install Windows XP, so it isn’t a $199 decision, it’s more like a $1500 per user decision and that makes it highly unlikely in the short to medium run.

Of course, some corporates are ready to upgrade and this will be their time to do so.  We suspect there won’t be as many as either hardware manufacturers or software vendors are hoping for.

On the other hand, IT managers may change their minds after they get a chance to see the much more robust computing environment XP provides (and the dollars in support it might save) – or if the ISV’s find some nifty new applications that only run on XP and are absolutely irresistible.  There’s always room for a new Killer App.

We’d love to know what you’re doing about XP, both at home and in your business.  Drop us a line and we’ll put your responses in a newsletter. 

Exit Strategies

We’re starting to see the realities of an ice-cold IPO market, tightening IT spending from many customers, and a very tough market in which to get venture funding – initial or follow-on, even for companies with good ideas, seasoned management, and visible marquee customers.

Just this week we’ve seen Net Genesis bought out by SPSS and Crossworlds by IBM.  We suspect that this is just the beginning as companies with money go bargain-hunting.  Such mergers can bring the buyer a cornucopia of goodies:  customers, technology, access to new markets, scarce skills in vertical market knowledge or technology.  Of course, successful integration isn’t easy, but it can be a lot faster than building your own product/company.

We expect to see lots of convergence (acquisitions, mergers, purchases of technology, and other inventive solutions), especially in these overcrowded and hard-to-fund sectors:

• ASP/xSP markets.  Too many under funded, under managed companies in search of customers and business models.  A few smart guys are going to start rolling up the best ideas into a few larger companies focusing on vertical markets, geographies, or specific technology expertise.
  
  

• Portals:  Everyone is rushing to this hot market and all the big boys have now come to the battlefield in force.  Portals are really full of positioning, product, and customer overlaps anyway (are they about user interfaces? application access? application integration?  knowledge management?  collaboration?  First (and second and third) prizes will go to the vendors who sort this out and put together significant portfolios, easy-too-implement applications, and accommodate many partners in an open architecture.
  
  

• Enterprise Application Integration Tools.  Too many separate pieces.  Too many approaches.  Customers are looking for complete solutions.  Vendors will take advantage of the economic cycle to buy the missing pieces to complete their portfolios, making it even harder for incomplete solutions to seem viable.

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