Microsoft and the recession

The company's upcoming Windows 7 may accelerate the recovery of the worldwide economy

There are some days when you wake up, glance at the headlines, and then want to go back to sleep and wake up next year after hibernating like a bear. Something like this may have happened this month, when Microsoft announced that its revenues fell for the first time since the company went public in 1986.

One of the reasons why Microsoft is facing trouble is because the recession has put a damper on upgrades and due to this, sales of Windows have dropped 29 per cent. But the Redmond giant, undaunted, is launching Windows 7 in October. And so the question arisesu2014will this help the IT industry recover? Or will a failure of Windows 7 mean more trouble for Microsoft and the IT industry, to make no mention of the world economy itself?

Surge unsurpassed

Typically, when the economy recovers, common sense suggests that there is a surge in demand. And you don't need to consult a Nobel Laureate in Economics to understand this if you have been sticking to any old thing (ranging from a TV to a car or a PC), then, the moment the economy improves, you will want to buy something new a slimmer TV, a bigger car, or a faster PC.

And when that happens, then the economy gets a boost. So, the question we have to answer is this will the economy show signs of recovery when Windows 7 is launched? Because, if this happens, then things will move upward.

Tough question

But to answer a question of the recovery, you need to speak to a Nobel Laureate in Economics. And if you listen to what Paul Krugman said in June this year, you will feel depressed, because this Nobel Laureate is of the opinion that the damage from the US recession may persist for a very long time.

And if you want more people in the mould of Cassandra, there is a poll by ComRes, which found that 37 per cent believed in a recovery in June, as compared to 33 per cent in July. The same poll also said that last month, 53 per cent found no signs of recovery, a figure that shot up to 57 per cent this month.

See the light?

Before you decide to throw yourself off the top of a tall building, wait there are some who believe that life will still smell like roses. Deutsche Bank says that many companies will move to Windows 7 and use this as an excuse to upgrade, and this may boost the IT industry. Bank of Canada also feels that a recovery from the recession is underway, albeit in its early stages.



In a way, the situation is ironic competitors of Microsoft, who would normally love to see it falter, are probably praying that Windows 7 will do well, because that may be one of the brightest signs of the recovery of the economy. "Things are bad indeed when only the enemy can save us," as Richard Vallery says in Alistair MacLean's HMS Ulysses.

Not that bad

In an article in the Wall Street Journal, Justin Lahart says that, according to the National Bureau of Economic Research, this recession began in December 2007. So, it has lasted a total of 20 months and is still continuing.

While this is terrible, it is nothing compared to the Great Depression, which, according to the Encyclopaedia Britannica, began in the US soon after the New York Stock Market Crash of 1929 and lasted until about 1939.

QUICK TAKE
>>Microsoft is betting on Windows 7
>>If it succeeds, the whole industry will benefit
>>But much also depends on the global economic recovery