Microsoft - Crunch Time

If you are an executive at Microsoft right now, the next week or so is going to be pretty crucial.

On 22 October, Windows 7 is launched, the much vaunted latest version of the operating system. It is a crucial release because Microsoft, for the first time in its history, saw a backlash at its last major operating system release, Vista, when many large corporate customers decided to stay with the then current version, XP and still have. There were many technical reasons why customers did this but it caused tremors deep within Microsoft - was this the first ever user rebellion?

News yesterday will not have cheered Microsoft people. Google announced record quarterly profits at $1.6bn, a full 27% up on the same quarter last year and a clear sign, according to their Chairman, Eric Schmidt, that Google had exited the recession. A clear sign for the economy, perhaps, that the worst is over. But Microsoft people are hunkered down - after beating, cajoling, strong arming and any tactic they could find, they could force many home users to take Vista, but they could not force big customers to use it. It has now left them a massive problem.

The majority of PCs bought up until recently, came with Vista burned on the machine but they also had a downgrade option to XP. It meant a bit of fiddling around, but many users opted to go back a version of operating system to use a better, more established version. Clearly, Microsoft wanted to move all its development dollars to applications and a future based on the Vista lineage and so it had to make a huge gamble.

Here is the gamble - to benefit from using Windows 7, you can only upgrade from Vista. For all other users, you have to buy a new operating system, either with a new PC or just outright. It is not a gauntlet laid down by Microsoft to corporate customers, it is a simple, 'I told you that you had to move to Vista, now pay the price.'

Microsoft has been accused of massive arrogance in its stance on many occasions, introducing new versions of products where the file formats cannot be read in all versions causing big issues in the past. They have also been accused, more regularly, of hubris. Their products are still buggy with many simple things still recurring in products that have been within them for 10 years. They have been accused of stifling innovation as their products, with such a stranglehold on users, they force people to use the their products only.

Google were not the first company to come from nowhere and take Microsoft on but they are one of the few that avoided their usual responses to stifle competition and get not just a foothold but are now as big as them. The search engine was the linchpin but Google's view on the web challenged Microsoft's control of the PC from the opposite way. Google grew by revenue off the web, not the PC and it is its mantra today - and boy, have they been proved right.

For Microsoft, the next period in their history will be a white knuckle ride. They are going back to their base of PC users and they are basically waving a corporate two fingers at them to move to Windows 7 or get left behind - there is no intermediate choice. For Microsoft it is vital that users follow them as they cannot afford to keep developing products on multiple versions of their operating system - they have to get people to upgrade. Gone are the days of incentives on this - it's pretty succinct punch in the face.

I'm an XP user. I know that when the time comes I will be taking advice on what to do. The whole arena of operating systems has changed dramatically over the last 10 years. Now is as good a time as any, when I face paying for a full new operating system, to consider the advantages of Microsoft over its competitors or vice versa.

When was the last time we could have said that?