Why Windows Vista Delay is Bad News for Google and Apple

Many pundits argue that the delay of Windows Vista will allow Apple to sell more Macs and Google to gain more marketshare while the giant from Redmond sleeps. I would argue that the delayed launch of Windows Vista is bad news for Google and Apple. Unlike previous versions of Windows, Vista is not about selling a desktop OS. It is about selling a rich Internet experience positioned to compete directly against Apple and Google. While Apple and Google have built their businesses around vertically integrated Internet platforms such as iTunes and Google Search, Microsoft is taking a step back and delaying its launch so that it can integrate more tightly with its Internet content partners and distribution partners. Unlike Google and Apple, which operate closed ecosystems, Microsoft is launching Vista with more of a partner approach. First, Vista's core functionality is being revamped to strike Apple at the heart of the broadband Internet experience. Unlike Apple, which is notorious for strongarming content partners, Microsoft is playing nicer with content owners. Second, expect Vista to be tightly integrated with Live.com and MSN and strike Google where it is weakest, which is in the productivity application space. Unlike Google, which has focused on building light weight Internet applications with low barriers to entry, Microsoft will be focused on building rich, Internet productivity applications with significant lead times and high barriers to entry.

Windows Vista Is Being Re-Shaped as an Apple Killer
To fully appreciate Vista's threat to Apple, look no further than the Windows Vista launch page. Vista is first and foremost about making the PC the center of your rich media experience focused around your pictures, your music, and your movies. These are the three things that Apple has built its business around via its iLife strategy and the three core products supporting this strategy are iPhoto, iPod, and iMovie. Microsoft knows that in order to beat Apple, it must attack Apple where it is weakest. Apple's biggest weakness is that it works very poorly with third parties. In the PC world, Apple was terrible at working with PC manufacturers because it wanted to own the whole food chain. In the online music world, Apple has effectively created a closed ecosystem boxing out content owners from the distribution chain. Microsoft understood several decades ago that in order to win its PC battle against Apple, it needed to ally with PC manufacturers. Today, Microsoft is doing the same with content partners. Microsoft is going to empower rather than hinder content owners who have been held captive by Apple's lock on the music hardware business.

If there is one thing that Microsoft does better than Apple, it is enabling third parties to build products and businesses on its software platform (and collecting its share of the winnings toll via licenses) rather than encroaching on the businesses of its partners. In the PC business, Microsoft focused just on the software - enabling PC manufacturers to make money off hardware. Microsoft won. Its partners also made money. In the content business, Microsoft is doing the same thing. It is making Windows Media Player a platform for enabling content owners to make money off their music and movies, while Microsoft makes money off the platform.

In the music space, you can see that Microsoft Music Experience for Vista is built around partnering with the premier names in music - it has already announced partnerships with MTV, VH1, and CMT. In the TV and movie space, you can bet Microsoft is doing the same.

Vista Delay May Lead to More MSN and Live.com Integration and Make Google Irrelevant

Microsoft understands that the PC experience is now an Internet experience. It is not about selling licenses or owning desktops. It is about owning the webtop. Bill Gates commented at MIX 06 that Microsoft is already working on the next two versions after Internet Explorer 7, which is due later this year with Windows Vista and that Microsoft intends to build deeper RSS support in Windows Vista and Internet Explorer 7, allowing people to subscribe to Web pages as well as podcasts and photos.

The Vista delay will allow Microsoft to integrate Vista more tightly with Live.com which is frankly a Google killer. Unlike Google, Live.com is open, meaning that users can customize their experience with any content they like just by clicking "Add Stuff". Live.com is user generated meaning each Live.com experience is different. Finally, Live.com is familiar and the interface handles like a PC quality software experience. That said, Live.com is a real work in progress, so it is unsuprising that Vista is being delayed. This is Microsoft's third try at building an Internet presence after Start.com, MSN and I would bet that, as always for Microsoft, the third time's the charm.

Mr Wave Theory

Send to a Friend!       Subscribe!