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!

Dell computer corporation recently launched a site called “Idea Storm” to get feedback from customers on improvements they can make to products and company interactions.

So far most of the issues can be summarized as customers just want ways to simplify their purchase and use experiences, reduce costs, and get more performance out of the hardware they are purchasing.

Dell has advertised how they use Lean Manufacturing concepts in their factories. Pictures and videos I have seen from their factories indicate they understand the concepts (some more opportunities though, my team and I would be very willing to assist, see the contacts page to get in touch). So Dell just needs to translate these concepts from the factory floor to the office and customer facing interfaces.

Dell is also in the midsts of figuring out how to improve profitability and sales penetration. An early method they should begin with is the old 80/20 rule and simplifying their product line. There are a huge number of product platforms and options available – all in the spirit of offering the customer a “customized experience”. Many consumers view computers as a commodity, an appliance, to use to get things done. I grew up in the automotive industry and while there are the passionate owners, there are many who just look at a car as transportation, and they make buying decisions from that perspective. The 80/20 principle will point out which 20% of the products generate 80% of the sales and profits. Everything else is extra overhead and complexity for a company that drags them down – it’s a real phenomenon, there have been several studies of increasing platform and product complexity rapidly drags down profits. Oh, marketing departments will tell you the company has to compete in every market and price point and “we need all of this” - sometimes just to keep the marketing group busy as there would be too much redundancy if they only had a couple of products instead of hundreds to market – where’s the career in that?

Why confuse buyers with duplicates of similar products (the separate corporate and consumer brands)? With the rapid pace of technology shift it would be better to select one platform and provide that to both categories. Think the consumers would like to get the pricing the corporate version offers (typically less trim and chrome and shiny sparkles and covers used to “dress up” the consumer version)? Think the corporations would like to get lower prices because much of the hardware fixed/overhead costs have been spread into the consumer market?

As I’ve explained in my prior posts here, I do some computer refurbishing for a hobby, so I’ve seen the good, bad, and ugly hardware designs from all the manufacturers – and because of my background I know what problems those designs cause in the manufacturing realm. Make hardware repair easy, make getting service documentation from the web site easy.

Then work on the software end – many consumers correctly dislike the advertising and “free” software pre-installed on their hard drive. Just like grocery stores, many computer manufacturers take the equivalent of “slotting fees” to place product on their “shelf”. Dell has been investigated or are at least suspect about Intel, Microsoft, AOL, and etc possible “fees” that “reduce the price to the consumer”. But they do not reduce anything, departments have to manage all the various projects to collect and maintain them, consumers get slower performance, and the call centers have to add more support people (often in other countries “to reduce costs”). Seems a bit expensive, doesn’t it?..

Go back to the Lean tenants and remove waste from your system. It doesn’t matter if you make cars, computers, or crayons - you need to simplify all of your processes and products and remove costs in doing business. Sometimes it is useful to “Lean” on outside expertise to offer an objective perspective on the exact methods and tools for getting there, which is where we can assist you – and you don’t have to create “Waste” by keeping an in-house staff for this either – just give us a call.

Cheers!