Analyst opinion: Countdown to Vista - Apple vs. Microsoft

Vista is almost upon us, with a launch date less than a week away. It will be an incredibly important product that will attract many comparisons to Apple. Read about what makes Windows different from MacOS. We also look at reasons why Apple hasn’t been able to duplicate its success with the iPod in the PC arena and why Microsoft hasn’t been able to duplicate its success with the Zune.

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The two companies are fundamentally different and, in a way, Apple is more dependent on Microsoft than Microsoft on Apple. In addition, were Microsoft to demonstrate the same core competency as efficiently as Apple, Microsoft would be vastly more successful financially than they currently are.

For Apple, the power behind their financials is not the Mac. It is the iPod and the vast majority of these play with Windows. For the Mac, one of the most loyal and powerful applications has been Microsoft Office and, strangely enough, Active Directory. Both are from Microsoft and both allow the Mac to better interoperate in a - love it or hate it - Windows World. Were Microsoft to somehow block Apple on all three of these, Apple would be in trouble and Microsoft would spend some painful court time. It’s unlikely to happen, but you see the dependency.

On the other hand, Apple does solid work on ease of use and demand generating marketing. It is interesting to note that Microsoft has had difficulty in both areas and often has been compared unfavorably to Apple’s related work as a result. Even though Microsoft, in terms of resources and partners, easily should have overtaken the iPod with Plays for Sure, Apple solidly kicked its butt and Zune, once people figure out how many were left in store inventory at the end of the year, will probably be an even more historic embarrassment for the firm.

One other thing that Apple does better than Microsoft is focus and funding. At CES, you could see a massive number of very capable offerings from Microsoft from set top box initiatives, to embedded offerings, to personal devices (SPOT), to Vista itself, to the Xbox. Every single one, with the possible exception of Zune which has other problems, was underfunded and under resourced. Apple launched three products at MacWorld and focused on one, the iPhone. Which company created more excitement around their products and moved their stock farther ? Apple.

Windows Vista installation

Granted, Apple’s stock price dropped back to near where it was before the announcement, probably because most realized that revenue from the iPhone would be a long time coming and Apple’s own outlook wasn’t up to the financial analysts expectations. But, by focusing and funding a few things well, Steve Jobs creates a value almost unmatched by any other CEO.

On Microsoft’s side, however, the company is deeply entrenched in businesses ranging from Government to Small Business. Windows, though I often wonder if Microsoft actually realizes this, is the keystone to a cascading group of products that start with the OS move to Office and continue to the back office with products ranging from generic services to specialized applications. If Vista doesn’t move quickly, there is a good chance much of the other stuff won’t sell either.

In addition, while Apple’s success largely just hits Apple, Microsoft’s success carries through to other large companies like Dell, Gateway, Lenovo, AMD, Intel and HP. Yes, Intel benefits from Apple as well but not to the same degree due largely to the difference in the size of Apple and Microsoft’s respective markets.

Apple’s model works best, as we’ve seen, with contained products like the iPod and less well as part of an eco system someone else owns (makes you wonder about the iPhone, doesn’t it ?). Microsoft is better as an eco system provider and doesn’t do well with standalone products (which is why it makes little sense to me that they position Vista and Office 2007 as standalone products).

I actually think that if they suddenly realized what the Xbox could become and if it had the full strength of Microsoft behind it, as opposed to being more like a Sony clone, it could easily eclipse anything Sony, Nintendo or Apple could ever do. I just don’t think Microsoft sees this.

To net it out, Apple’s comparative strength is focus and Microsoft’s is scope, Apple’s comparative weakness is scale and Microsoft’s is complexity. I actually do think both would be more successful as closer partners than sticking to the weird middle ground they now occupy.

Vista experience

I’ve been using Vista virtually exclusively since before Christmas and it wasn’t until I made fun of someone who was still running Windows XP that I realized that, to me, this no longer is just a new OS but the status quo.

While much of what will be released by third parties next week is still secret I’ve had a chance to mess with a few things that I think really stand out on the platform. The first, strangely enough, is a book called "Windows Vista Secrets" for those of us who are both early adopters and likely to be technical support for your family, friends, and neighbors (and no I’m not volunteering), this book by Brian Livingston and Paul Thurrott is a god send.

Well researched, it is a massive resource providing all of the answers to questions we haven’t thought up yet but will plague us when trying to get someone up and running late at night after they have done something they probably shouldn’t have. You don’t need it to run Vista, but if you are going to tell people you are on Vista, you will need it if they call on you as an expert. It is kind of handy too, for instance I didn’t realize I could move the widgets out of the sidebar and this was one of the first things I did.

Some Vista applications

Widgets, man, do I love the widgets. These things are free and now that I know you don’t need them in the sidebar I’ve kind of gone widget crazy. I’m running Vista on a quad-core AMD box and my favorite is called "multi-meter 4 core". It shows via a little bar graph how much memory I’m using and what each core is doing. I use the Weather, picture viewer, RSS feeds, system performance and storage gadget as well.

I’ve had a chance to mess with the new Norton Internet Security application for Vista. I have not been a fan of this tool for awhile primarily because the firewall has historically been incredibly painful to use. But this new Vista version went in clean, doesn’t annoy the hell out of me, really does run in the background and, from what I can tell, dramatically increases my protection from both viruses and phishing attacks. It doesn’t constantly bring up little flags or tell me that it is working or ask me stupid questions either ; it simply works in the background and what a difference that makes.

Yahoo Instant Messenger for Vista is a product I saw at CES but am not actually using yet. But I was so impressed that Yahoo seemed to grasp even better than Microsoft seemed to just what you could do with Aero and the new UI to make this product generations better than any other IM offering. It is pretty, it is easier, and it showcases a company thinking about what they need to do to really leverage the new OS.

One product still in stealth is from Electric Rain. It is a high-end presentation offering that showcases better what could be done with visual applications than anything else I’ve seen. It actually cuts to the core and will provide, when it releases, one of the best competitive arguments to why Vista may have closed the gap in an area that Apple currently owns. Because it is designed for the clients of content companies, who probably don’t run the MacOS today, it is probably vastly more practical, too.

That’s it for now and I am off to New York for the launch myself and my next column will cover that so check back in a week.

Rob Enderle is principal analyst for the Enderle Group. He can be reached at renderle@enderlegroup.com.