It's not a V bottom, it's not a U bottom, it's a Nike swoosh recovery - Greg McLenon, Hotovec Pomeranz
I was planning on writing this one after my trip to see the Vole last week, and thank goodness I did. I must tell you, I was expecting something completely different prior to my visit. Vole's gaming group is full of open and honest people who are quite aware of the competitive landscape. And, funnily enough, they seem understated and modest about it. As a big Vole fan it was a refreshing trip. Perhaps they'll be open to some suggestions.
Personally I don't believe that Vista is creating incremental demand for new computers but I think things are about to change.
Microsoft is investing a significant amount of resources into the entertainment side of Vista, and Games for Windows looks promising. Games for Windows is more than just a marketing campaign, it should add significant benefit to the PC and console gaming experience. Microsoft is pushing for an easier installation experience, Xbox controller compatibility, and a full inter-compatible console/pc communication system. These are just some of the awesome features that Microsoft is driving for, there are many more that I probably can't discuss until they show up. Rest assured, Games for Windows is not hype and I think developers should take a serious look at it.
Beyond Games for Windows there is still DirectX 10, and I believe DX10 will drive Vista demand significantly. There are new game titles, including Company of Heroes which will eventually support DX10 (not sure when). That said, Company of Heroes looks amazing as it is, so it's hard to imagine what DX10 will do for it. According to the developers there should be some significant tangible benefits.
So I'm really excited for Vista and what it will bring to the gaming experience, although I wish is was ready at launch. Many of Microsoft's partners were caught with their pants down when Vista launched and they're STILL trying to get things working right.
Regardless, I am a firm believer that Microsoft's future success in the OS space will be driven on the back of DirectX and the gaming team. It's not unlike Intel's riding success on the backs of its Israeli engineering team. In fact, I said it before and I'll say it again, Vista's demand will increase based on tangible benefits of DirectX and Gaming. Sure Microsoft Office is amazing, but I don't believe Office drives demand for Vista because you can get Office for other platforms as well.
I have always been a fan of Microsoft. That said, I'm not a fan of complacency, and if left unchecked for years (and years and years) it may lead to adverse consequences. The one thing Microsoft has been lacking is big-time competition in the core operating system space.
How times have changed; Apple, once left for dead, is now a mainstream contender. Companies like Google and Yahoo! come out of nowhere, and Wall Street witnesses as their valuations reach heights that only a few could imagine.
In the meantime some say that Microsoft has become a victim of its own success. Let's face it, lazy people don't get rich but rich people sure as heck get lazy. I'm sure there are people at Microsoft that are somewhat unaware of what's happening around them.
The landscape has changed immensely and there are warriors with huge war chests gaining power. These new warriors are out in the open, waiting for the day that they can come out and announce their big plans.
I don't think it's as simple as someone launching another half-baked distribution of Linux. Don't get me wrong, I think Linux is awesome, and while I like open source I think there are limitations when it comes to consistency, support, and ease of use. But imagine if someone set up an industry-recognised open source consortium whose sole job is to certifying any modifications and new applications to the OS regardless of distribution. At least we would get some consistency, and people could profit from their work.
Another possible scenario would be for a giant company, like Google, to step out and launch a clean easy to use version of Linux (or something of the like) that does absolutely everything a PC or Mac does but better.
The third and certainly most obvious threat is if Apple decided to license its OS. An interesting prospect, and perhaps not as unlikely as some people would like to think.
No matter what happens, Microsoft has gaming in its favour. The firm should be placing as many resources as possible into its gaming division to help carry the company forward through challenging times. Gaming and highly immersive entertainment will also help drive demand for Vista Ultimate.
Understanding your threats is half the battle to winning a war. I can only hope that the people I met are representative of those at the top of the totem pole. I'm also guessing that the industry landscape will be completely different five years from now - let's see what happens. Feel free to flame me now. µ
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