The New OS Landscape: Real Competition

A lot of people seem surprised by Microsoft’s decision to drop the retail prices of Vista, including a whopping 30% reduction for Vista Ultimate.

“It’s sort of an odd move,” said Gartner analyst Michael Silver, while NPD Group’s Chris Swenson opined “I can’t remember a big price cut like this.”

Boys, welcome to the new and exciting world of OS competition.

Gone are the days when Windows dominated the landscape while Apple struggled on the edges, and alternatives such as Linux were embraced by a small, ultra-geeky group. Today, Apple is booming while Linux is – surprise, surprise – moving, if ever so slowly, into the mainstream. Who knows, maybe IBM will bring back OS/2 given the revival in the OS landscape!

Microsoft may have sold 100 million copies of Vista since its launch last year but even the folks in Redmond know that Vista hasn’t been a booming success from a financial, brand or technology perspective.

For all of Apple’s poking fun at Vista, the truth is consumers – for the first time perhaps ever – have real choice. Buying a Mac is no longer seen as risky if you aren’t tech savvy, a graphic designer or a student. These days, people, who would have never thought about buying a Mac, have become Apple disciples even if it has meant paying a premium for the privilege.

All Microsoft is doing by slashing the prices of Vista is being smart. If you need a better competitive position to deal with pesky, revived rivals, a quick and dirty tool is lower prices.

The question, of course, is whether lower Vista prices will work. Since its launch last year, Vista has struggled to resonate with consumers even as Microsoft has dealt with some of the criticisms. It’s particularly telling – and embarassing for Microsoft – that demand for XP is still alive and well. itComputer Canada, for example, just launched a SaveXP campaign.

If Microsoft is going to revive Vista, it’ll probably take more than lower prices. Perhaps the next version of Windows will resonate with consumers but the harsh reality is the OS marketplace has changed and there’s nothing Microsoft can do to restore Windows’ dominance.

There’s a new kid in school, and his name is competition.

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  • Ben Lucier

    Yessir. Another problem is the fact that Microsoft has multiple versions of Vista. Do I want it for business? For home? For Home business? All too often the choice ends up being the Ultimate version because consumers don’t want to lock themselves into an OS that might lack a feature they need/want in the future.

    In contrast, Apple has only one version of OS X, with all the features one could want.

    I wonder if Apple will ever make the move to support OS X on non Mac hardware (it’s already being done by others).

    OS X is my full time OS on my MacBook Pro. I’m also running Windows XP inside Parallels so I get the best of both worlds, without so much as a second thought.

    Like you said Mark, lowered prices are a sign of competition. In fact, this is the first time I I’ve been witness to such a clear-cut case of the beginnings of what will surely be an all out OS war in 2008/2009.

    In the end, consumers that have been forced to spend hundreds and hundreds of dollars for a piece of software required to run a computer will benefit.

    And while we’re on the subject… shame on Microsoft for rolling out such a shameful piece of software. My parents run Vista and you know what? They don’t call MS support when they have problems – they call me….

  • E Guy

    I am a recent Mac convert using Mac at home and Windows at work. Vista like the 2007 versions of Office software provide added complexity without value (in my opinion). Prices is not the problem for Microsoft…delivering value to the consumer is the issue and they are not with their recent releases.

  • George Chase

    What is most interesting about the price cut is that few people actually buy their OS. When was the last time that you went out and shelled out a few hundred for an OS? Most people, like me, “buy” their OS when they buy their computer and stick with it until the next computer purchase. It’s bundled in. What would really be interesting is if more vendors started bundling Linux with their hardware. Yes, I know it is an option in many cases, but look at the popularity of the Asus eeepc with it’s bundled Linux OS pre-installed. What was really cool when I took delivery of mine was that Asus actually included a CD with Windows drivers if I wanted to install Windows (I didn’t). I think the OS, as a separate software that you buy, is dead. Ironically, Microsoft guaranteed that, when they started bundling their OS with many hardware vendors’ computers as a pre-installed OS. I remember trying to order computers that had no OS, for the college that I worked for. They wouldn’t sell them to me. They said that I could erase the OS and add what I wanted but they would still charge me for the OS.