Executive Summary:

In the face of enterprise competition from the increasingly popular Apple, Microsoft is ready to overhaul the battered image of Windows Vista. But the move is late in coming, and the company would be better served by improving its products rather than bandaging old wounds.

Apple is on a roll these days. Other than the embarrassing release of the not-quite-fully baked MobileMe service, Steve Jobs and the crew at One Infinite Loop have been showered with positive press about strong Mac sales, booming iPhone business, and even increased Mac adoption by the enterprise. Mac sales in 2008’s second quarter were the highest ever, with market-research firm Gartner estimating that Apple sold 1.4 million

Macs in that period—enough to leapfrog Apple over Acer to become the third largest PC vendor in the United States by sales volume. Even more news of Apple’s good fortune came in the form of an August 2008 Yankee Group report indicating that the Mac is making noticeable gains in the enterprise. Report author Laura DiDio found that approximately 80 percent of the more than 750 IT professionals surveyed have Macs operating on their networks. “Although the Apple Mac hardware and OS X operating systems still represent a small niche, adoption and acceptance of Mac hardware and operating system software are growing at a steady and sustained pace not seen since the late 1980s,” DiDio said. “Use of Apple products in a corporate environment is much more pervasive and complex than previously thought.”

By comparison, Microsoft seems to be under the gloom of (somewhat undeserved) negative press these days, much like a cartoon character in the shadow of a perpetual rain cloud. Earlier this year, a class-action lawsuit stemming from Microsoft’s ill-fated Windows Vista Capable marketing campaign revealed embarrassing email messages about Microsoft execs unable to use printers and run Vista on their own laptops. And corporate customers have been slow to adopt Vista; a June 2008 survey of IT pros—commissioned by KACE Networks and conducted by King Research—indicated that more than 60 percent of the 1,162 IT professionals surveyed had no Vista migration plans.

Truth be told, Vista has improved mightily since its January 2007 release. It had some early teething pains and still runs like cold gravy on minimum-spec machines, but I’ve largely had a positive experience with it. And the Vista migration here at the Penton Media offices earlier this year went off without a hitch.

But after ignoring the growing perception that Vista was a dud for more than a year, Microsoft has belatedly decided to strike back—by saying it needs to be more like Apple? Microsoft CEO Steve Ballmer must have been glowing an envious green when he typed the following in an email message (which was reprinted by Todd Bishop at the Seattle Post-Intelligencer) to Microsoft employees. “In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving,” wrote Ballmer. “Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience.”

In another example of Microsoft’s dewy-eyed glances at Apple, a recent Microsoft news release eagerly proclaimed ActiveSync support for the iPhone, a marketing move equivalent to joining a screaming throng of teenage girls chasing their favorite boy band. Then there was the Mojave experiment, a thinly veiled homage to those soft-drink taste tests in which Microsoft gathered up a panel of computer novices, had them test a new OS called Mojave (really Vista in drag), then performed a Candid Camera–style “It’s not Mojave, it’s Vista!” reveal at the end.

Microsoft is determined to change public perceptions about Vista, but I don’t think an ad campaign hinged upon saying “Sure, Vista used to suck, but it’s better now!” will inspire IT managers to bust out their purchase orders and schedule a Vista migration. General Motors made a similar mea culpa in 2003 with an expensive “road to redemption” effort that reminded potential customers GM made cars in the 1980s that leaked oil, dropped important metal bits, and spewed clouds of discolored smoke at random intervals, but promised that GM had learned its lesson and would make better cars. GM learned that producing better products was the answer, and Microsoft should do the same: Why tout the merits of damaged goods when you can develop and promote new products that don’t have the negative PR baggage? It would be foolish to think that Apple could ever challenge Microsoft’s dominance in the enterprise, but the Mac is making some headway in a world in which small businesses are increasingly using consumer technologies such as the iPhone and VMware Fusion to meet their needs. And Microsoft? I’m no Dr. Phil, but Ballmer and company might be better served by ditching the Apple fixation and marketing better products.