Digg.com has a thread running about a comment that Steve Ballmer at Microsoft made that Windows Vista sales are behind the sales curve of prior launches of Windows 95 and Windows XP at the same point of their respective sales histories.  Here are a few thoughts about what Microsoft should be considering:
It’s not Piracy, it’s just that the world has changed…

Large corporations don’t upgrade until they have had their IT departments fully test the new operating system for 12-18 months or longer.  As time goes on they spend more time testing because there is more complexity in the OS and the other programs the company runs and more potential for problems.

Savvy corporations are looking more at client-server applications and cutting hardware (and software) costs – not putting a Thick-client on every desk anymore – especially since most work is being done on or feeding Internet applications.

Consumers take longer to purchase replacement computers (why the hardware manufacturers have languished).  Most don’t have major performance needs (email, web surfing, and documents/spreadsheets don’t require fancy equipment).  So most consumers are getting by with computers still running Windows 98.  Or if they want more security than 98/ME/etc affords since Microsoft discontinued support they look at Linux.  The major performance issue for people comes at the bottle-neck of Internet access – more are moving from dial-up to DSL/Cable but still the speed of an average ten year old computer still far exceeds the access bottleneck.

There are more than one pc in many families – so some upgrades begin to be considered like a corporation – file compatibilities, system stability, home network issues, and so on.

There is still support for XP by Microsoft and no killer-app for upgrading to Vista.  Windows XP was a good stability upgrade for most people so they are not getting too angry at their existing OS to be looking for something better.

A major competitive threat used by Microsoft in the past was the cost advantage they could apply vs new entrants – they could offer products for nearly free until people were hooked and then charge later after competition is removed (early MS Office tactics, real and imagined).  Or offer as a bundle with new equipment purchases (that appear to be free to the buyer).  Now Linux and other open source projects are out there that are more free than Windows.  And Linux is improving, rapidly.

Gamers, that drive a lot of hardware upgrades, have other competing options to consider spending on – XBOX’s, PS, Wii, etc.  They then have less disposable income for the high-end computer purchase.  Then some game consoles can access the Internet, so some don’t bother buying a family computer.  Microsoft is contributing to cannibalizing their own OS sales with their consoles and game offerings.

Linux is improving and more consumers are learning about it and experimenting.  They find it works on their machine and keep going.  Programmers write a lot of expensive code for Linux because they are fighting for freedoms against the huge corporation.  Rebels will work exceptionally hard for a cause they believe in.  Comments about Pirates and so on just renew their resolve.

So Microsoft’s world has changed from the launch of Windows 95 and Windows XP.  Their launch curves will be slower and longer.  Eventually Vista will be installed in a large base in corporations as they upgrade equipment and home users will upgrade slowly to do work at home.

But don’t blame the Pirates, blame market competition.

Cheers!