2007: How was it for Microsoft?

Summary:2007 was an eventful year for Microsoft, with the company playing what it considered to be its trump card (only to discover Vista wasn't trumps, XP was). But the lovable giant had its fingers in many other pies -- making for a year of management changes, entry into unclaimed markets and new alliances.

2007 was an eventful year for Microsoft, with the company playing what it considered to be its trump card (only to discover Vista wasn't trumps, XP was). But the lovable giant had its fingers in many other pies -- making for a year of management changes, entry into unclaimed markets and new alliances.

In a false trumps sort of way 2007 started bright for Microsoft, with the January launch of Vista on everyone's lips.

Vista was intended to replace XP as the latest and greatest version of the Windows OS, bringing new panache to the desktop experience with its new Mac-like Windows Aero user interface. A new Search function was introduced make finding files easier, while security upgrades were to make the system Windows' "safest ever".

But annoyance with the system started early, with users buying Vista Home Basic, Home Premium or Business and wanting the 64-bit version of the software having to buy the 32-bit version and then send away for a replacement CD from Microsoft. They even had to pay for postage.

In addition, Vista was not the operating system everyone had been waiting for, with the dolled-up user interface not considered a good enough trade-off for loss in performance -- even with the much anticipated SP1. A test by Devil Mountain Software comparing performance in office between XP and Vista showed that XP with SP3 beta installed performed at twice the speed of Vista with SP1 beta.

In fact, backlash against the new operating system was so widespread, Microsoft was forced to allow PC manufacturers to offer XP as an option when buying a new computer, with a deadline set for the last sale of XP at 31 January 2008. Pressure from users forced this deadline back another five months to 30 June 2008.

However, later in the year Microsoft announced a sales tally of 88 million copies -- so failure certainly doesn't describe it.

Less publicised, January also saw a change of guard for Microsoft Australia, with Tracey Fellows taking over the role of managing director.

Windows Mobile 6 had its debut in February, but was not destined to enjoy the spotlight for long with the launch of Apple's iPhone following close behind, although Microsoft CEO Steve Ballmer didn't seem to be worried: "Five-hundred dollars fully subsidised with a plan! I said that is the most expensive phone in the world and it doesn't appeal to business because it doesn't have a keyboard. Now it may sell well or not."

Although perhaps he should have been worried, with 270,000 iPhones selling in the first 30 hours of its release.

Google's open handset alliance created later in the year to develop a mobile phone software stack called Android also served to take mobile headlines from the newly released Windows Mobile 6.

February also saw Microsoft reiterate its plan to jump on the Software-as-a-Service bandwagon with a US$6 billion commitment to funding SaaS projects. The company wanted to take part in the 21 percent growth the area enjoys -- three times larger than that of boxed software.

Open source became the subject of Microsoft's baleful eye in May, with Microsoft lawyer Brad Smith alleging that various open source developments infringe on 235 Microsoft patents. According to Horacio Gutierrez, vice president of intellectual property and licensing at Microsoft, the company's move is designed to bring parties to the negotiating table to sign deals such as the Novell patent pact last year.

In June another such pact was struck with Linux distributor Xandros. Microsoft will supply patent covenants which ensure that customers do not infringe any of its patents, while Xandros will ship software that translates between the Open Document Format and OOXML -- Microsoft's own document format.

Adobe quivered in July as Microsoft unveiled Silverlight RC1, software for displaying media and interactive content in Web pages. The Flash competitor prompted speculation that its release caused Adobe to announce a dramatic drop in prices the same month on its Flash Media Interactive Server 3 and Flash Streaming Media Server 3.

August saw Microsoft buying Internet advertising firm aQuantive for US$6 billion in a bid to challenge Google's online advertising empire. The company has begun to invest US$2 billion in its own online advertising platform -- Microsoft Digital Advertising Solutions. In the words of Bill Gates, it's up to Microsoft to "keep them [Google] honest".

In September, Microsoft released its Server 2008 RC0, followed in December by Server 2008 RC1: the first time in five years the server has been updated.

The same month saw Microsoft's attempt to fast track the International Standard Organisation certification of its document file format OOXML fail amongst fears it contained too many proprietary hooks. However, it is not the end of the road for OOXML, with Microsoft having another chance early next year, after addressing some of the technical comments attached to the votes.

Also in the ninth month, the EU Court of First Instance ruled against Microsoft's appeal to a 2004 ruling that it abused its dominant position in the operating system market by not making information available to rivals which would allow their interoperability. Microsoft now has to continue to allow rivals to have access to certain technical protocols and needs to continue offering Windows without a bundled media player in the EU.

Although Microsoft had threatened after the September decision that another appeal could be on the cards, in October it capitulated, and will let the decision stand.

Microsoft splurged in October to buy a 1.6 percent stake in social networking site Facebook, for the bargain price of US$246 million -- making the popular social networking site worth around US$15 billion in total.

Under the terms of the new agreement, which expires in 2011, Microsoft will be the exclusive third party advertising partner for the social networking site, and the Microsoft ads will expand beyond the US to Facebook's international presence: another important step in the ongoing battle to topple Google's advertising dominance.

On the heels of this influential move, IDC released information which stated Microsoft controls over 40 percent of the IT industry, with 14 million people working in companies which are touched in some way by the giant.

Ripples were made in November, as Microsoft CIO Stuart Scott was fired for "violation of company policies".

Keeping personal in November, Microsoft head Bill Gates was relegated to the lowly seventh rank of Fortune magazine's Power 25 -- the 25 most influential people in business. Rubbing vinegar in the wound, Apple's Steve Jobs took the top spot.

While December for most people has abounded in drunken silliness, Microsoft has still had the time to put out a detailed document on the changes SP1 will bring to Vista: with security and performance improvements, including addressing security vendors' concerns over restricted access to the Vista kernel and decreasing the time to copy files, being a major part.

The SP1 for Microsoft Office 2007 was also released in December.

Finishing up the year as it started with Vista, ZDNet Australia had an interview with Microsoft director Jeff Putt, who said companies are buying Vista but not deploying it onto their computers. Perhaps the collector's edition is worth more with the plastic intact?

Topics: Windows, Microsoft, Social Enterprise

About

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for t... Full Bio

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