Amid Doom and Gloom, Opportunities for Microsoft, Apple

By Paul Rubens (Send Email)
Posted Jan 6, 2009


Paul Rubens
OS Roundup: It's only the first week of January, and already 'recession,' 'credit crunch' and 'challenging economic environment' are being used to describe the new year. Sure, 2009 will see some big losers, but innovation tends to thrive in economic downturns, and winners will emerge.

Recession, credit crunch, challenging economic environment: Call it what you will, it's bound to have a profound effect on the IT business during the next 12 months.

One of the most notable victims is likely to be Microsoft's Vista. The OS finds itself in an unfortunate position, squeezed by the slowdown on one side and the rapid emergence of Microsoft's Windows 7 desktop OS on the other. In stark contrast to Vista, which took years to develop before it was finally released, 7 appeared out of nowhere in a highly advanced state at Microsoft's Professional Developers Conference in October 2008. A pubic beta release (build 7000) is expected in the next couple of weeks.

For adventurous sorts, a leaked version of the beta is available now via the Pirate Bay and other torrent sites. People who have downloaded are reporting that it is stable and polished. Me? Call me a coward but I'll wait for the official beta release.

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Given Windows 7 is an extension of Vista rather than anything completely new, it is unlikely to have the same compatibility issues Vista suffered from when it was first released. The build given out at PDC confirms this. So why would a company looking to cut back on spending this year choose to upgrade its enterprise desktops to Vista in the next 12 months? Windows 7 is likely to be released before the end of 2009 and be ready for corporate adoption some time the following year. Are you going to rush out and implement Vista? I don't think so. That means it's well and truly curtains for Vista, the enterprise OS that never really made a wow.

Will Apple Be the One to Bite?

It's going to be fascinating to see what happens to Apple in the next 18 months or so as the recession runs its course. According to research by California-based Net Applications, Apple's share of the OS market rose to 10 percent in December, while Windows fell to a shade under 89 percent. These figures may be skewed toward Apple because Apple is principally a home platform and fewer people go to work than normal during the holiday season, but it is undoubtedly true that Apple's successful switcher campaigns have prompted many consumers to move to OS X.

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The question is, will this trend slow as the recession bites and potential switchers postpone new hardware purchases? The prospect of the end of Vista and the introduction of the shiny new Windows 7 may serve as another incentive for dissatisfied PC users to hold off purchasing an Apple machine. Since any drive to corporate adoption of OS X is likely to be on the back of success in the consumer space, any slowdown in consumer switching is also likely to put the kibosh on the prospect of more Macs in the enterprise.

There's also the sad fact that Apple's supremo Steve Jobs is not in the best of health. It's certainly true that Bill Gates withdrew from the day-to-day running of Microsoft without any ill-effects on the company, but when you consider the sorry state Apple was in before Jobs returned to the helm of the company in 1997,and how thoroughly he has revitalized it, you have to wonder how the company and its products will fare should he decide to take things easy.

One thing that is unlikely to become a victim of the recession is the desktop computer itself. Partly that's because they are so darn useful, and partly because they are so inexpensive. If they got any less expensive you'd have to give them away. And that, curiously, appears to be one of the options Microsoft is considering in a patent application published last Christmas Day. The patent outlines a system for pay-as-you-go metered computing on PCs with "scalable performance level components" including "processor, memory, graphics controller, etc." Microsoft's idea seems to be that suppliers could give machines away and charge per-hour fees to users. If necessary, the amount of processor power or memory available could be beefed up when needed, with users paying only for what they need and what they use.

It's an interesting idea (even if it's not a completely new one). If you think about it, the system as described has similarities with server-based services, such as Amazon's Elastic Compute Cloud (EC2). Both offer computing on a per-hour basis, and both can be ramped up to provide more capacity (or computing power) when needed.

Is this the future of enterprise desktop computing? Unlikely, for a number of reasons. Servers and the surrounding infrastructure including support are expensive to supply in-house, and provisioning new ones tends to be time consuming. EC2 is cheap, and new server capacity can be made available in an instant. But desktop machines — even powerful ones — are inexpensive, and a system as described by Microsoft would still have to be supported locally. And as Microsoft admits, "the cost of ownership over the life of the computer may be higher than that of a one-time purchase," even if some of that cost can be deferred. Servers paid for by the hour make sense, especially for businesses that experience huge demands on their servers for short periods of time. Desktops? I'm not convinced.

2009 is bound to see some big losers — but there will likely be some big winners, too. Don't forget that innovation tends to thrive in economic downturns. So hold on to your hats — 2009 is going to be one heck of an interesting year.

Paul Rubens is an IT consultant and journalist based in Marlow on Thames, England. He has been programming, tinkering and generally sitting in front of computer screens since his first encounter with a DEC PDP-11 in 1979.

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