When Coca-Cola decided to “improve” the formula for its flagship product in 1985, it was a marketing disaster. Soon after New Coke hit the market, consumers were demanding for the return of Old Coke. After some posturing, Coca-Cola did an embarrassing strategic reversal by bringing back the old formula a few months later. While New Coke wasn’t pulled off the market, it died a slow, ignominious death.
In some respects, Microsoft now finds itself in a similar predicament. Vista is supposed to be a superior operating system to XP. Five years in the making, it is supposed to be a major upgrade over XP – much more than XP was an improvement over Windows 98.
Unfortunately, Vista is threatening to become New Coke. While Microsoft and Windows are always big, juicy targets for criticism, Vista has been given a rough ride – perhaps unfairly – by consumers and the media. Vista’s problems have not only left many consumers pining for XP but encouraging many people to stick with XP. For the billions of dollars sunk into Vista’s creation, the growing love affair with XP must be frustrating for many people in Redmond.
So what does Microsoft do? If it admits Vista is a problem child, then it cuts the knees out from under its new flagship OS and a new, high-margin source of revenue growth. At the same time, Microsoft needs to meet the needs of its consumers. If many of them want XP because it’s more stable and has fewer problems, Microsoft should, in theory, do what consumers want – something Seth Godin would likely give his stamp of approval.
While Microsoft is not going to abandon Vista, it is making modest concessions when it comes to XP. The latest move is a decision to extend the availability of XP for computer makers and retailers for another five months until June 30, 2008. It will also continue to make XP available in emerging markets where people have computers that don’t have a powerful processor and/or lots of RAM and memory. This is a significant concession even though it appears to be a minor move.
Microsoft is trying to spin this decision as a recognition “some customers need a little more time to make the switch to Vista” but the reality is many customers have no interest in Vista because they’re content with XP – at least for the time being.
If Microsoft’s not careful and continues to insist on ramming Vista into the market, do not be surprised if there is a backlash among some consumers. Much like New Coke spawned the Old Cola Drinkers of America to be organized, can it only be a matter of time before the “XP Lovers Unite” is created?
If I were Steve Ballmer, I’d play to consumers rather than force-feeding them Vista. If consumers like XP and want to keep using it, why not institute a new Windows portfolio strategy that features Vista and XP. Clearly, they play into two different markets with different needs. If you support both, it will make consumers happy and give Microsoft more time to improve Vista. If Vista gets better, XP customers will eventually migrate.
That said, I would be highly surprised if Microsoft decided to give XP more love and attention. After all, it’s an old operating system that served its purpose, while Vista is designed what for consumers need today and in the years ahead. If may take consumers some time to realize it but Microsoft is not going to abandon a product evolution strategy that has served it well for more than 20 years.
More: Mary Jo Foley wonders if XP is too good for Microsoft’s own good, including a quote from a Microsoft executive who concedes the one year phase-out period for XP may be too ambitious. Ars Technica adds one “other thing working against XP’s demise is the poor reputationâ€”deserved or notâ€”that Vista has begun to acquire.”