Windows Vista, Office 12, and Internet Explorer 7 collectively represent a change in Microsoft's strategy. Furthermore, they reflect the fact that for the first time in the company's history there are truly viable alternatives to its products.
The amount of innovation in these products is enormous when compared with the difference in previous versions. The innovation is not skin deep either. Certainly the UI is the most visible change in each application, but that's the point of a UI. More and more features have been crammed into each new wave of the traditional Microsoft products. This is the direct result of the increasingly stiff competition they have faced in the last few years.
However, the strategy of simply encouraging or coercing users to upgrade to the latest and greatest application is simply not a viable long term plan, especially in the face of competition. The ever increasing rivalry of Open Source alternatives, such as OpenOffice and Firefox (see chart below), and other corporations like Apple, has cost Microsoft dearly.
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Until recently, Microsoft was able to simply produce the next logical version of an application via some strange bureaucratic mating ritual. However, their entire paradigm for the next generation of software changed when their products were truly challenged (at least in terms of features).
The radical changes in the most recent releases represent Microsoft awakening to the idea of user driven innovation. That is not to say that Microsoft has been asleep at the keyboard for years. Instead, with so many government institutions and businesses dependent on their software, most of the bugs need to be worked out ahead of time.
Users want to do things with software that the developers and designers cannot imagine (most often in the sense "uh, why would you want to?"). In response to this, the greatest strength of Firefox was conceived: extensions. When users can implement whatever features they want and share them with the world. However, lacking such a system, IE7 replicates many of the same base features as Firefox.
According to Bit-Tech "there's really nothing that Firefox does that Internet Explorer doesn't, in terms of functionality." This latest version of IE was simply a matter of playing catch-up with Firefox. The same could be said of Vista and OSX (as covered by Lifehacker and David Pogue at NYT )
Microsoft may or may not be out of ideas of its own. That is not the issue. It is the simple fact that the nerds of Redmond, Washington need to embrace the features of their competitors simply to continue being competitive. After thinking the same way for decades it is difficult to galvanize a corporate behemoth like Microsoft into producing new and innovative software.
The way that Microsoft has dealt with competition from Firefox and Apple is demonstrative of their plan to innovate and succeed. Microsoft is introducing features in their products that the blogosphere welcomes with something between "ho hum" and open hostility. It doesn’t especially matter what features transcend applications. The bottom line is that competition is good for the consumer.
