Good old Microsoft is about to unleash a new operating system on us, and have already released the latest version of their office suite. Both are called XP, which apparently stands for Experience. I think it is going to be quite an experience for all of us, and very little in the positive. Let’s look at the issues. Well, perhaps the single issue: revenue for Microsoft.
MS wants to make money. Why I don’t know. Bill Gates already has more money than most nations. What bank do they keep this stuff in? Or, perhaps, how many banks do they own? Kidding, of course – I know that in reality they already own all the wealth in the US except for the oil interests. They already own the digital rights to most of the artwork in the world (though Gates’ Corbis), have taken over major TV networks, etc. It’s just a matter of time…
Whoops, back to XP. The first aspect of XP that will impact consumers is the cost. The biggest change is that MS has signaled that it is going to discontinue upgrade pricing. Now, upgrade pricing has been a mainstay of the software market since day one. The idea is that you keep customers by offering them smaller incremental prices on updates so as to keep them from jumping to a competitor’s offering. Even, in some cases, the initial purchase price was kept low to encourage new users. We can debate the merits of this approach, but it certainly seemed to work and software users would often develop strong brand loyalties.
But, of course, there was less revenue from selling an upgrade than selling the full version. If you look at the retail new installation price of MS products, it’s exorbitant. But who is to say that the current retail price will be the purchase price after upgrade pricing is discontinued? If the new purchase-only price is reasonable, perhaps that will be a good thing. We’ll have to wait and see. MS also experimented recently with yearly licensing fees instead of outright purchase, but they apparently have decided not to pursue that.
Another aspect of the push for more revenue is controls on software piracy. MS knows well that many people have illegal copies of their software. There is a lot of outright copying, especially overseas, and its very common for someone to buy one copy of Office and then install it on all their PCs. Microsoft’s new activation feature will very effectively stop that. And, if you think that the hackers will come up with a way to defeat it, remember that the greatest software minds in the country are working on this – good luck in cracking it. So, not only will consumers now pay full price, they will have to pay that fee multiple times, for each PC they have.
Another aspect of revenue to MS is positioning its software as a platform for new applications and licenses. Under the guise of being helpful or giving you new opportunities, MS is really positioning itself to generate regular revenue from these services, just as the telephone or cable companies generate regular revenue today.
Though all of the above discussion, I haven’t talked much about new function or opportunity in XP. Thing is, I can’t see much. The primary advantage of Windows XP is that it (finally!) shifts the home OS from the old DOS based Windows 9x to the far superior Windows NT/2000 base. This should result in a much more reliable system and alone makes it a worthwhile upgrade from Windows 9x or ME. Since I am already running Windows 2000, I am probably going to drag my heels. MS Office already had far more function than any home user could possibly use – there is little in XP that anyone on a home or personal level is going to take advantage of.
But, XP is here, for better or worse. I for one am going to sit back and see what happens before I plunk down my money.
(Bob Seidel is a local computer consultant in the Southport / Oak Island area. You can visit his website at www.bobseidel.com or e-mail him at bsc@bobseidel.com).