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October 28, 2008 (Computerworld)

Hours before Microsoft Corp. executives trotted out Windows 7 at the company's developer conference, officials leaked some details about the impending alpha edition on Microsoft's own Web site.

In an extensive privacy statement devoted to Windows 7, the successor to the problem-plagued Windows Vista that Microsoft will tout today at the Professional Developers Conference (PDC), the company revealed several facts about the upcoming operating system.
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9118301
 

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The Real Issue - Recurring Revenues

Many years ago I did extensive programming in a mainframe computer environment. All my programs were essentially one-offs. However, after a couple of years I began retaining some code used over and over - primarily statistical analysis. (This was the era before the big statistical packages like BMD, SAS, etc. appeared.)

Later, when I moved to the PC environment, it seemed that most applications were also essentially one-offs. A spreadsheet like Lotus 123 which was released perhaps 15 years ago is not much different that Excel is now. Even old Lotus commands still work in Excel.

The problem one-offs create for software companies is what to do with their technical staffs once the software is completed. Their revenues are generated by these programs and once everyone has Excel, then the revenues stop and then how do you pay the technical staff?

About 10 years ago, Norton solved this issue when they started selling annual subscriptions to virus updates. I remember my first annual charge was $3.50. Clearly Microsoft became jealous of this marketing scheme.

This concept gave Norton recurring revenues and they quickly jumped on this cash flow, jacking up the subscription fees quickly and often offering the basic Anti-Virus software free in order to snag the recurring revenues.

Microsoft flirted with the idea of a subscription to Office, but as far as I know, gave up on the idea. They also flirted with the idea of renting software and tried to insert themselves into every economic transaction that was notwork based so that they would be in a position to cream off a percentage.

All in search of recurring revenues.

Nowadays, companies offering Firewalls and Spam Fighters and Spyware negating software are all using subscription based software.

Other companies like Adobe and Microsoft simply do "Upgrades" to generate continuing revenues. Adobe is probably the worst example, charging an arm and a leg for an upgrade that perhaps offers one useful new feature. Microsoft is not far behind, updating Office and Windows when they decide that they need new revenues.

And this is the underlying problem of Vista. It was not created to satisfy customers' requirements. It was created to satisfy Microsoft's requirements for new cashflows.

I don't need a NEW Operating System. An occasionall enhancement is all that is required. However, that is too close to the "one-off" software model and it doesn't generate the revenues that Microsoft wants.

So we as consumers, are getting pushed into an environment designed to generate recurring revenues for large (clearly too large) software companies.

Microsoft was apparently surprised at the lack of acceptance of Vista by the users. That's because they lost their way, thinking that we consumers are on this earth for the benefit of Microsoft and not vice versa.

I think Microsoft needs to examine its basic purpose and goals. Using a phrase I've heard much too often recently, Microsoft needs some REAL CHANGE.
 

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true in the workplace aspect, but in terms of gaming/home media, i think major overhauls are needed every few years to keep up with new hardware advancements and requirements (64 bit, directx10, protected paths, etc.). movie studios want everything locked down, and i just don't think thats possible on older versions of windows.
 

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Addendum

Good comment, Luc. I've never played a computer game and probably never will - at least beyond Minesweeper.

However, it appears that there is a convergence taking place with a looming battle between GPU's assuming CPU responsibilities and vice versa. I'm not certain how this will end. The resulting successful merged chip may require a new O/S, or maybe hardware is all one will need.

I am a heavy user of Photoshop which also requires some graphics power. However, I see no reason to upgrade with the frequency that Adobe would like. 64-bit O/S may help, but I'm not certain. I did observe that Elements 6 recognized my Quad CPU, but Photoshop CS2 did not.

Gamers are pulled along by the producers who impose massive computing requirements for ????. Faster frame rates of complex visuals, I suppose. I don't know why that's considered a positive. Fancy graphics should not supplant smarter games. E.g., when I watch a film based on a game, I generally find it atrocious with cretinous plotting - again placing graphics over plot. That's my preference, I suppose. I would hope that Gamers would also prefer more intelligent games over graphical explosions and heads blowing up. I.e., from my perspective, there is no compelling reason for an O/S upgrade because of gaming when most of the graphics power emanates from hardware and is used to supplant plotting.

WRT "rights", I don't think Microsoft gives a rat's ass about digital rights (other than for their own code). However, again they saw an opportunity by being able to "shut things down". Eventually soneone will be offering a service requiring an "opening up" and as the Gatekeeper, Microsoft stands to earn recurring revenues for allowing such an "opening". (Another example of a "service" designed not to benefit their customers, but rather to benefit themselves at the expense of their customers.)
 

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@springle - I think MS is in trouble if customers get wise to this "subscription" gig. At my company we are using XP and Office 2003. We are unlikely to go to Vista - we may go straight to Win7 but that would be late 2010 at the very earliest - about a year or so after it has been out.

Therefore we will have been using XP for almost 10 years. Why are we paying MS several hundred $$ per year per user? We are using a product (XP) that is almost a decade old. How much "support" do we get from MS and does it justify the cost? I wonder!
 
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