Days of our Lives!

July 16, 2006

This is for you Altaf

Filed under: My Cup of Socie-Tea — Santhosh @ 6:11 AM

A Theory About how Microsoft Makes its Money

Microsoft makes a lot of money. Its profits, as many of us know, are a few times the GDP of some of the middle-sized economies of the world. But tell me, apart from the Office Suite and the ever crashing Windows operating system, has Microsoft made any other “successful” (selling) product? So how is it that the company keeps making these huge profits? Microsoft hasn’t released a single product for the mass market in the last so many years — nothing since Windows XP, if I am right. There’s hardly any positive buzz about the company. Most of the good news and innovative products are coming from its competitors: Google and Apple. Firefox is steadily eating into Internet Explorer’s share. So how is it that Bill Gates still rakes in the moolah? That question plagued me for a number of days but I think I’ve found the answer over the last week.

Every other day we seem to get a mail from Altaf M Hussain (HR i guess), asking us to update our computer. And invariable they all turn out to be “Highly Critical”.

Over the past 3 weeks there have been a total of 32 Windows updates installed to my computer. Of these 18 are “critical” Security Updates, 11 are hotfixes (whatever that means) and 3 other updates. MS Office too had joined the party. The Office Suite has got itself 2 security updates and 6 other updates. 40 Microsoft updates in three weeks, averaging nearly 13 a week.

Suddenly the answer I was searching for all these days is right in front of my eyes. You want to know how Microsoft keeps making money, I’ll tell you my theory:

Microsoft deliberately releases flawed software in the market: Operating systems that have flaws that need to be patched, hotfixes for numerous bugs etc. Microsoft knows that its buyers are suckers, after all they have bought Microsoft products. Next, every once in a while it releases a news bulletin about how a new flaw has been discovered in Windows or MS Office and how it can be fixed with a patch that can be downloaded from the Microsoft update site. A Microsoft spokesperson and a few well-placed articles in the media meanwhile fan the panic and urge Microsoft customers to use their windows update function to keep their computers current to ensure that their software is updated and that their PCs and their data is safe. So all the world immediately either visits the Microsoft site to download the patch or enable the recommended setting of keeping automatic updates on.

I am sure Microsoft has tied-up with Internet Service Providers around the world. Their sales pitch to the ISPs is simple.
“We release flawed software first. Then we release patches and hotfixes for our software, hmm… at the rate of say about 5 a week. Actually we can, and we often do, release more. We have enough bugs in our software to keep us going for a decade. After that we release a new flawed version. Any ways think how much data transfer that means for your customers. So give us 50% percent of your revenues. What? Ok 35%. No? 25%. Think about it. We ensure you stay in business for many years. No, no, let me assure you that Microsoft will never release a complete and flawless product ever. We are looking at percentage earnings from ISPs as a major avenue to bolster our bottomlines. 15%? You’ve a deal. Bill will be happy. I think as a bonus, Microsoft will announce a new service pack to be downloaded.”

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3 Comments »

  1. One more way microsoft is planning to make money: http://www.komotv.com/microsoft/story.asp?ID=43547Dinesh

    Comment by Anonymous — July 16, 2006 @ 11:33 PM | Reply

  2. hmm…but, as far as i guess, the patches are free as long as u’ve bought the original version of the MS software.Hey , but there’s a flaw in ur logic. Maruti has also released ONLY SWIFT in the last few years as a new & innovative product.Thats ‘coz they get money out of selling their earlier products. Same with MS.They have astrangle hold over the PC market that 90% of all new PCs are shipped with WinXP – what more do they need?

    Comment by Cne — July 23, 2006 @ 6:34 PM | Reply

  3. Hey, to curse Microsoft is a recent drift. But, a bugless software is hardly imaginable in this whacky software world. But i contemplate that MSFT has been deliberately sneaking in some flaws to ensure it’s product gets some busybodied hackers trying to circumvent those flaws. The media divulges this to the people and this is the way MS gets its fame and those lame buffs. And there comes the maker for its salvage. And, don’t you remember the days when the wily software maker, made quite a number of companies close their products, just because MS provided those similitudes with their OS. And, this is their strategy to survive. And now, they will copy other far-famed products and enwrap them with their OS.

    Comment by Anonymous — July 25, 2006 @ 12:17 PM | Reply


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