Mailbag: The Economy According to Steve, Windows 7

I must admit your economic analyses are my least favorite part of your newsletter. From an investor's standpoint, I have little faith in Mr. Ballmer. The ideas which seem least popular (for example, seven plus versions of Windows) are always strongly touted by him. Indeed, Microsoft's stock price has remained stagnant for the past seven years after plummeting from its peak a few years prior.

So while he may have some advice for Congress (advice which is naturally biased toward his company's agenda), our country would be wise to take it with a grain of salt.
-Gregory

You and Ballmer are so correct when it comes to the debt (stimulus) bill. Running into debt does not work at home, at work and in the 1930s, and is only going to ruin our great country. People need to WAKE UP and contact their representatives right away. Our children's futures are at stake.
-Joseph

Putting aside the old canard "You can't run government like a business," it should be obvious that innovation and progress can increase tax revenues. There have been plenty of independent studies that have shown that tax cuts not only resulted in business expansion which translates to jobs across ALL industries, but that revenues to the government via the taxes INCREASE. When business leaders that lean left already understand that but the party they support doesn't listen, we have a major problem.

The inflation that will be created by the insane spending at the end of the Bush administration and the beginning of the Obama administration is a recipe for disaster.
-Herb

Having been elected on the promise of better times for all, Washington has to be seen doing something -- even if it means screwing the next generation more than Gen-X has already been screwed for the Social Security cock-up. Although the politicians appear to have thought about the $8 BILLION, they still thought it was a great idea to dig a hole of national debt bigger than any nation has had the reckless stupidity to dig. Maybe they have their collective fingers crossed that it'll be all right on the night. Well, uncross them -- it won't be all right, stupid!

Take time to go back to the likes of Mr. Ballmer and others with integrity and LISTEN with your brains engaged. Maybe then we won't throw greenbacks to the winds, make more unscrupulous millionaires and end up unable to feed ourselves. The feeding frenzy for all those millions is only just beginning and if you happen to be in the middle class and lower, step aside -- it's not for you, really.
-Stephen

Doug doesn't like the idea of Microsoft charging users to upgrade Windows 7 starter packs. A few readers don't like it either -- but that's just the way it is:

I think you are being very old-fashioned when you say, "I'm not a fan of artificially restricting software." Well, I'm not a fan either but it's life. The first time I saw this was in the U.K. with Sky satellite receivers which could record programs. The service was called Sky-Plus. Crafty old Rupert Murdoch (who knows even more than the guys at Redmond about extracting the last penny from his customers) made a charge for the service. So you paid extra for the hardware which could record and time-shift programs, but you had to pay 10 pounds per month (about $20 at that time) to activate it.

Cisco now charges to enable 'features' in a lot of its products. You buy an ACE load balancer and it's limited to a certain bandwidth, though the hardware can process more. You just have to buy the licence. For the future, I can see a day when you can get a really powerful PC for free but it does nothing until you pay a monthly fee to activate its features one by one. You may hate that but you watch -- it will happen.
-Jonathan

In the 1970s, the electronic manufacturer I worked for produced three different models of a certain electronic product. The recommended sales prices were $200, $400 and $600 each. The difference between the $200 model and the $400 model was the installation of $10 parts to the existing circuit board. To make the jump from the $400 to the $600 model, we plugged in a $20 circuit board to the existing $400 machine.

Since I was new to the ways of product manufacturing, it seemed that we were pretty hard on the customers. I realize now that it was just business as it is usually done.
-John

I worked for International Computers Ltd. which had at the time 50 percent of the U.K. market and was big in Eastern Europe. The engineers told me that a thermos flask, sandwiches and a paperback book were permanent pieces of their equipment because when that kind of upgrade was needed they would go into the machine room, lock the door, turn the switch or whatever it was to get the extra speed and extra disk space (I think I remember 40MB disk drives that were sold as 20MB because of trade restrictions on sales to communist countries and "upgrades" when those trade restrictions were slightly lightened), and then get out the thermos et al. to wait the couple of hours necessary to justify the cost.
-Mike

John has a theory about why Microsoft is planning so many versions of Windows 7:

As I was reading about the many versions of Windows 7, I suddenly wondered if one of the versions is practically mandated by the EU anti-bundling stand. MS has to provide a stripped-down version of Windows -- that is, without certain features -- so that it meets the EU requirements. You and I may like our Windows and Office versions to be full-featured, but some people in this world don't like all the parts. (Do I hear the Firefox users here?)

The only other alternative for MS is to sell the OS pieces a la carte, an option that to me feels like I am being nickeled and dimed to death. It still bothers me that the Standard version of Office 2007 has Outlook, which I don't use, and not Access, which I would use. See? Whatever MS does, I won't be happy. What do you think?
-John

And Bernie brings the Windows 7 versioning debacle down to earth after a reader on Tuesday (jokingly?) suggested upping the number of versions to 18:

This has to be a tongue-in-cheek spiel on the prior confusion and conflicts the many versions of XP had, especially after the MC versions were introduced.

Here's what I would do: One Home version that includes the toys automatically -- video, entertainment, games, TV, etc. -- and yes, it needs Internet. And one professional version; no toys automatically, but networking with all options available. The only varying content would be by license support upgrades. The content and tools really don't change across business users, but their support needs do. This would make a helluva lot of people happy...'cept me. I'm always ornery.
-Bernie

Check in next week for more letters! Meanwhile, send us your thoughts by e-mailing them to [email protected]. Or leave a comment below.

Posted by Doug Barney on February 20, 2009