February 3rd, 2005
Amidst piracy crackdown, has Windows jumped the shark?
After seeing Arthur “the Fonz” Fonzarelli jump over a threatening shark while water skiing in an episode of the classic television series Happy Days, Jon Hein knew that there was no better metaphor than “jumping the shark” to describe that absurd moment in a TV series’ history when its producers officially put the show on life support. After reading today’s news — It’s Windows vs. Windows as Microsoft battles piracy — I can’t help but wonder if Windows has finally jumped the shark. After all, you know you’re business has a problem when one of your best opportunities for growth is to crack down on the people who are robbing you — in Microsoft’s case, those who are using pirated versions of Windows.
According to the report by News.com’s Ina Fried, “In a presentation to financial analysts last summer, Will Poole, head of the Windows client unit, identified a reduction in unauthorized use of Windows as a key growth opportunity for the business.” Without the freely available Linux scampering about, that opportunity might have some legs. But imagine if you were an executive at a big retail chain whose biggest competitor was giving merchandise away for free, and, during a presentation to financial analysts, you explained how beefing up in-store security in order to prevent theft was going to be one of your key revenue initiatives. Undoubtedly, the financial natives would get a little restless.
After reading this and looking back over the past year, there’s no question in my mind that Microsoft is scraping the bottom of the barrel, looking for ways to resurrect its cash cow. In 2004, for example, Microsoft rolled out a cavalcade of new security updates and features for Windows, many of which were made available only to users of Windows XP. The move gave birth to rampant speculation that Microsoft was looking for ways to force the nearly 60 percent of Windows users who were on pre-XP releases of Windows to upgrade.
Under the auspices of overall Internet security, Microsoft also said that it was making the update available to all users of XP regardless of whether those systems were legitimately licensed or pirated copies. The best quote I could find that captures Microsoft’s position at the time comes from The Computer Times, which quotes Microsoft’s Windows group product manager Barry Goffe as saying:
“We haven’t explicitly done anything to SP2 to exclude it from pirated copies….It was a tough choice, but we finally decided that even if someone has a pirated copy of Windows, it is more important to keep him safe than it is to be concerned about the revenue issue…..Having these unsecured users means bigger worm and virus outbreaks - which also impacts the Internet and consequently, our legitimate users as well.”
Given the impact that a bad malware attack can have on the Internet, the Redmond-based company also needed to do everything it could to protect the reputation of both Windows and Microsoft. Pirated or not, Windows machines that get turned into Typhoid Marys aren’t doing either brand much good.
But now, approximately a half year later, it appears as though Microsoft is having a change of heart when it comes to forgoing revenue for the benefit of its legitimate customers as well as that of the entire Internet. Making good on Poole’s characterization of the opportunity, the company has decided to cut off unregistered users of Windows from its Windows Update service through which critical security updates are delivered. Though the move has reopened a discussion of the trade-offs between revenue and overall Internet security, some analysts, according to a story in eWeek(see Is Mandatory Windows Validation a Security Risk), agree that Microsoft can’t be expected to give software pirates a free ride. They also see other software providers following suit. According to the story, Yankee Group lead analyst Laura Didio said, “Too much money is being lost. In the past four years, the percentage of revenues from new software licenses was down across the board. The vendors really have no choice but to get tough.” But the same story also quotes Digital Defense Inc. CTO Rick Fleming as saying that “any move to limit the application of critical security fixes will ‘create bigger headaches’ for everyone.”
Had there been no alternatives, I might not be looking at this from a jump the shark perspective. But, between the free versions of desktop Linux that are getting better and better, companies like Sun and Novell who are offering complete desktop productivity solutions (operating system, applications, etc.) for $50 per year, Microsoft offering dirt cheap versions of Windows in other parts of the world, a significant delay to the future and very different generation of Windows, and what appears to be a lot of upgrade resistance (suggesting no signficant increase in utility from one version to the next), you can’t help but wonder if the Windows dynasty has finally run out of gas (and, if–by scraping the bottom of the barrell–Microsoft knows it).
And by the way, fans of Happy Days won’t want to miss ABC’s celebration of the show’s 30th Anniversary tonight at 8pm ET/7pm CT.
