Windows & Office Sales Slow

Low sales hurt Microsoft's bottom line

Slow Adoptions Hurt Microsoft

Microsoft may be best known for Windows' dominance of the desktop operating system market, but 46 percent of Microsoft's revenue comes from application software, most of that from the Office suite of programs.

But Office 2000 sales aren't going as well as anticipated and they're being dragged down by slow adoption of Windows 2000, the much-touted replacement for Windows NT.

I see students attend training class for new versions of Office after they have received a new workstation -- and not even then. It's very rare for corporate IS departments to install a new version of a desktop productivity suite, such as replacing Office 97 with Office 2000, unless it's facilitated by a hardware upgrade. In-place suite upgrades are rare because the differences from one version to the next are slight, and the cost of upgrading is extreme.

The labor involved in upgrading an existing PC dwarfs the software's licensing cost.

Before Windows 2000 was launched in February, Gartner Group projected that 15 percent to 20 percent of Windows 95, Windows 98 and Windows NT desktops would be converted to the newer version by the end of the year. The market researcher now expects a conversion rate of less than 10 percent.

I tell trainers who attend the Train the Trainer Advanced Seminar that in addition to pursuing certification as a Professional Technical Trainer and the certifications already in hand from Microsoft, they should all quickly learn Linux and follow the certification tracks available for that operating system.

If Windows 2000 sales are dogged, and Red Hat, the leading Linux vendor, is seeing a 112 percent increase in sales over this same quarter last year, I think the handwriting is on the wall.

IT trainers must be prepared to present Linux training programs at both the system administration and desktop user levels. Linux is poised to fill the gaps being opened by lagging Windows 2000 sales.

IT directors are considering the benefits of using Linux for network services, roles that have traditionally been reserved for NetWare and Windows NT/2000. Word on the street is that Linux is also being considered as a desktop OS replacement. If that happens, IT trainers had better be ready for the flood of new seminar participants.

Back to Microsoft's woes: I think Redmond is running into lean times because many IT professionals judge Windows is bug filled and so darn complicated to implement and without innovative desktop applications to take the heat off Windows' laggard performance, Microsoft is being constricted from both ends of the sales platform.

I say to Microsoft: fix one or fix both, but whatever you do, do it fast.

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updated December 15, 2000
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