Microsoft and Low Cost

Steve Ballmer has decided that, since netbooks are popular now, there must be a cheap server OS to ’serve’ these groups of netbooks. Where this leap in thought came from could be most anything, but I’d have to say my thoughts range to ‘chemically-induced’.

Microsoft is readying a new low-cost version of Windows Server to give customers a server OS similar to client OSes that run on low-cost PCs.

Microsoft plans to release “something akin to” a netbook version of Windows, but for servers, not PCs, over the next month or two, Microsoft CEO Steve Ballmer said on a call with members of the financial community on Tuesday.

He said that although there is not high demand at the moment for netbook-like server hardware, declining prices in the server market make a low-cost OS an attractive option for customers.

“We don’t exactly have a netbook phenomenon, but if somebody can buy a $500 server, they’re a little loathe to spend $500 for the server operating system that goes with it,” Ballmer said.

He described the software as a “low-cost, low-price, low-functionality Windows Server SKU” called “Foundation Edition,” but did not offer more details.

This sort of reasoning truly makes me wonder more and more about this man. In all sincerity, who will be using this? If you have only need for lightweight netbooks, why then can’t Windows XP Professional (lets face it, there are lots of boxes with that Certificate of Authenticity being taken out of service today, just waiting for a repurposing) handle the job? For that matter, I am sure it must be easy to find a Windows 2000 Server disc, and perhaps, documentation, for sale, so being a pirate, or limited to 5 concurrent users (XP Pro) doesn’t enter the conversation.

Microsoft also posted a blog entry on its Windows Server Division Weblog reiterating Ballmer’s comments, but still did not provide specifics about the product.

Microsoft has a range of Windows Server offerings to suit the needs of different customers, but Forrester analyst Chris Voce said the company sees a gap in its portfolio at the lowest end of the market. For some customers, even its Small Business Server product — which bundles Windows Server with Exchange Server, SQL Server and other software — is too much, he said.

“They want to make sure Windows Server is as flexible as it can be,” Voce said. He added that he is aware that Microsoft is readying the new Windows Server SKU but is not at liberty to discuss specifics.

Microsoft’s revenue has been affected by the decline in purchases of full-featured PCs in favor of low-cost netbooks, which don’t provide as much margin for the company as sales of Windows on PCs do. Further, netbooks run both Linux and Windows XP, the latter an eight-year-old OS, so Microsoft’s OS does not have as dominant a position in the netbook market as it does among PCs.

Windows Vista, XP’s successor, has too large a hardware and memory footprint to run well on netbooks. However, Microsoft said that Windows 7, which will be out later this year or early next, will be netbook-friendly.

Ballmer spoke to the financial community this week to give them an update on Microsoft’s financial outlook for the remainder of the year. He said the company expects PC sales to continue to be slow and the economy to remain challenging for the foreseeable future, and the company will adjust its internal expectations accordingly. Microsoft is not providing public financial expectations for the rest of its fiscal year, which ends June 30.

My real question is this, “In hard economic times, with frivolous spending only done by bankers, how stupid does he think his customer base is? Why does anyone need a new (lightweight) server OS?”  Anyone who is not totally inept will either get a copy of XP Pro, an older server OS (Server 2000, Server 2003) at a discount, possibly included with used hardware, or go off the reservation, and use Linux – because, users don’t care what is on the server, they have very little interaction directly with a server, so what’s the difference if it’s Windows 2003, or Linux, and using Samba?

I think it’s time for Monkey Boy to grow up, stop the insane dance, and finally show his audience (and potential customers) some respect. Treat them as though they are not all fawning fanboys, or total idiots. Offer them something that gives value, at a good price, or leave the operating systems game to someone else, and sell Xboxes to the world.

§

The only reason I made a commercial for American Express was to pay for my American Express bill.Peter Ustinov

•

•