I’m on the record as saying that Microsoft’s Vista is set to disappoint, but there is another view floating around out there. It is best captured in a note this morning by Microsoft axe Rick Sherlund of Goldman Sachs.
In it he argues three things:
- Microsoft’s tempering of expectations is largely about Microsoft buying into industry analysts’ lower PC growth (9% y-o-y vs. Sherlund’s 11%), not that it is seeing poor Win Vista takeup;
- Spending expectations weren’t up as much as some feared, making that somewhat positive; and
- Microsoft talks down analysts at the beginning of almost every year, so this sort of thing is somewhat ritualistic.
I don’t disagree with any of Rick’s points, and it is particularly important to remember that Microsoft has long loved scaring analysts into conservatism early in a year, only to beat the reduced analysts through the year.
This time is different, however. Rather than saying numbers looked high, overall, Ballmer was talking down specific numbers on a specific highly important new product, Vista. While there was almost certainly an element of typical Microsoft-ian analyst gaming, this will still an unusual move, doubly so in the nervous circumstances, with an increasing number of people, pace my recent WSJ column, worried that Vista uptake is poor anyway. For Ballmer to add to those worries with highly specific concerns about that key product was testimony to how there is real problem here.