THE new judge presiding over the Microsoft antitrust trial can be forgiven for thinking she has the weight of the world on her shoulders.
Not only does Judge Colleen Kollar-Kotelly have to deal with the massed egos of the Justice Department and Microsoft, plus the high-powered lobbyists employed by the Enemies of Bill tapping at the courtroom windows, she also has to worry about accidentally knocking the U.S. economy – and the world economy – off their axes.
The question is, can Windows XP save the PC industry? And if so, should the judge get out of the way?
PC sales are in a major slump. All across America, nuclear families have given them the cold shoulder, and the tech guys at work have been told they can’t buy any more. For now, the moldy old P2 with the fat monitor will have to do.
According to market research firm the Gartner Group, PC sales will be lower this year than last year, the first time this has happened in 15 years.
The big five box makers have taken charges of $2.1 billion between them in trying to cut costs. But the really depressing news is that back-to-school sales are already disappointing.
The PC makers have been quiet as mice in the last year when it comes to criticizing Microsoft, because they are praying for a massive bump in sales this holiday season from people upgrading.
Windows XP requires ludicrous computing horsepower – 128 MB of RAM and 2 gigs of hard drive space, meaning PCs built before January 2000 probably won’t cut it.
But experts are beginning to wonder if the new OS, backed by a $400 million promotion, will really get people going.
“I just can’t see people running to the store saying they need a new way to manage their digital photos,” said Forrester analyst Carl Howe.
But for business users the story is fascinating. As she considers a way to reign in the Redmond giant, Kollar-Kotelly might not want to get too bogged down in the browser wars of 1995 and instead consider the fuss being kicked up by tecchies everywhere over Microsoft’s new licensing agreements.
Businesses buy Windows licenses per seat thousands at a time. But the “drop dead dates” for current licenses is March 1, 2002. After that, Windows users who buy in bulk will have no choice but to switch to a leasing type license, paying $35 a computer to use Windows – XP or any other.
Microsoft says the benefits include regular automatic upgrades and simplified sales processes. But Information Technology managers are complaining it’s expensive – and they have no choice
“It basically will cost them 50 percent more,” says Howe. “The only alternatives, when the budget runs out, is to buy Windows retail – so you own it outright for life – or maybe run a few Linux machines.”
According to Howe, Microsoft wants to smooth out its revenues by getting a steady flow of subscriptions, which would please Wall Street. But for business owners, a subscription is a current expense while right now their software spending is a capital expense.
“A lot of companies are weighing the calculus at the moment, and they might not go for Windows XP if they feel they are stretching their budgets just for Microsoft.”