Major Loss For Microsoft – Google Bans Microsoft Windows

A while back I stated that I thought that Microsoft was where General Motors was seven years ago, and the trolls came out in droves. They told everyone that I was nuts, that Microsoft was the greatest company on the planet, that Windows was the greatest operating system ever, that I was a lunatic, etc., and so on. It was quite funny really. I’d posted a bunch of numbers from Microsoft’s own annual report. No one questioned the numbers, they just attacked the messenger. See these articles for details – one, two. For a full list of articles about Microsoft click here.

Guess what – it looks like I was right :]

The Microsoft Ship - SInking Into OblivionThe Microsoft Ship – SInking Into Oblivion

Google has decided to ban Microsoft Windows. Seriously. The Financial Times appears to have been the first to cover this in an article titled ‘Google ditches Windows on security concerns‘ with quotes from Google employees. Now Google is a large company, but this is only 10,000 copies of Windows, so it doesn’t look all that damaging to Microsoft, if looked at in isolation. But when you look at the wider picture, this is a disaster for Microsoft.

Google is highly respected – they provide a great service, at a great price, and the company name is practically synonymous with search. The company’s technical skills are recognized worldwide, by Information Technology staffers, by Chief Information Officers, and for that matter nearly everyone who uses a computer. When Google does something, other companies often follow.

And the companies that follow won’t be doing so to make a fashion statement – this is a lot more serious – we are talking about security concerns. Google got hacked, and apparently the vector was Microsoft Windows. Google thinks that abandoning Windows for other operating systems is their best option. But where does this leave the Canadian Government? While their servers run Solaris, the Canadian Government is heavily reliant on Microsoft Windows as a desktop computer operating system, which leaves them open to the same sort of attacks that gave Google so much trouble. This means that Canadians are exposed to data breaches through hacking (and this may be why BILL C-29 – An Act to amend the Personal Information Protection and Electronic Documents Act is so toothless). Americans are in the same position, the United States Government is heavily dependent on Microsoft Windows, as are many other governments like the United Kingdom and Ireland.

Of course Google has one of the best technical staffs in the world – switching will be easier for them than for anyone else. The problem is that Microsoft has often ‘extended’ basic protocols (the ways computers communicate) in ways that makes Microsoft Windows incompatible with anything except Microsoft Windows. Anyone who tries to switch may find switching difficult, the City of Munich being a good example. But with Google leading the way, and providing free tools to help migration away from Microsoft, a lot of companies are going to look at this. Security is a huge issue – many companes who have had data breaches have been sued by customers who’s personal information was stolen. After all we are talking about possible use of the information for identity theft – an increasingly serious issue.

And the more customers who dump Windows, the lower the sales of Microsoft’s real cash cow, Microsoft Office. Microsoft has already been suffering from huge drops in profitability due to Oracle’s OpenOffice.Org, a free office suite that is as capable as Microsoft Office, but which is a free download, and is capable of running on Windows, Linux, Mac OSX, and a several other operating systems. Google offers a web based Office Suite, which while it isn’t in my opinion as good as Open Office, is still good enough for 90% of most people’s needs. Another option is KOffice, another free download, which is Linux based, but Windows and Mac OSX versions are available. And what possibly hurts worst is Apple’s IWork. Microsoft used to own the Macintosh Office Suite market until Apple released IWork at a fifth of the price, with better capabilities, killing Microsoft’s sales to Mac owners.

As take up increases in the alternatives to Microsoft Office, the financial pressure on Microsoft increases. The company has been losing money on every product they produce except Windows and Office, and has a large debt load. This is why Apple’s market capitalization recently surpassed Microsoft’s. Investors no longer have confidence in Microsoft’s ability to deliver good products that people want to buy. The ‘Microsoft Only’ world that Andrew Grygus foresaw in 2003 didn’t occur, partially due to the massive security problems that Microsoft products have. And this isn’t helped by Microsoft’s lies of omission – they have admitted to not telling customers about vulnerabilities that they are patching. Some people seem to think that this isn’t serious, as long as the vulnerabilities get patched, however Microsoft has been using number of reported vulnerabilities in the marketing materials. To quote Dr. Roy:

Let’s remember how much damage was caused this year because Microsoft had refused to patch known Internet Explorer flaws for five months [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12]. Where is the liability [1, 2, 3, 4, 5]? Watch what is happening in Denver right now.

We can assume that Google would be well aware of this, and that this factored into their decision to stop using Microsoft software.

This is not a single, simple issue. There are several trends which all appear to be rising at the same time. I don’t expect Microsoft to disappear tomorrow. In fact I don’t expect Microsoft to disappear at all. If these trends push Microsoft into severe financial problems, Microsoft may be forced to declare Chapter 11 (part of the U.S. Bankruptcy Code that allows companies to attempt to reorganize their business with the aim of at least partially paying off vendors, and of course keeping some of the employees employed). Since Microsoft is such a large firm, I would expect the United States government to help bail out Microsoft, like they helped bail out General Motors, if it is necessary to keep the company operating. However even with government help, the company would suffer severe damage, which would heavily impact their customers. It’s damned hard to write quality software, when you are laying off large numbers of software engineers (as an aside, I’ve worked on projects with several companies that were undergoing Chapter 11 reorganization, and while it’s better than the alternative – no company – it’s still a nightmare).

Corporate Information Technology departments are going to have to start contingency planning for a future where Microsoft may not exist, or may be a far different company. They may never need to use these plans, but ‘better safe than sorry’ as my mother used to say. And I’ve just scratched the surface in this article. There are undoubtedly thousands of things that I haven’t considered. There are probably issues that no one has considered, because the won’t become visible until two or three years from now.

While I don’t like Microsoft, quite frankly this is a nightmare scenario – one that could cause as many (if not more) problems than the U.S. financial meltdown.

Regards

Wayne Borean

Tuesday June 1, 2010

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