Microsoft goes retail with own shops

Microsoft is following Apple's lead by opening its own retail stores.

The software giant has named David Porter as corporate vice president of retail stores, whose first order of business will be to define locations, time frames, and specifics for a series of Microsoft-branded retail stores. Porter was head of worldwide product distribution for DreamWorks Animation SKG and starts work at Microsoft next Monday.

This is a major departure for Microsoft, which has relied on high-street retailers to pump out PCs, Windows, Zunes, and copies of Office to consumers. But in recent months, Microsoft has seen the lights go out on one high-street retailer after another.

Apple, meanwhile, has peppered the globe with flagship stores that sell Macs, iPods, software, and provide customers with decent support.

The retail campaign comes as Microsoft has attempted to re-establish its link with consumers with the coming Windows 7, in the wake of disappointing Windows Vista sales and Apple's satirical TV campaign.

While potentially justified, the timing will be questioned. Setting up a retail operation is expensive and the plan comes at a time when Microsoft is trying to cut costs. The high street, meanwhile, is suffering as consumers cut spending to ride out the recession.

Microsoft said Porter's role would be to "create deeper engagement" with consumers. It added Porter would complement the work Microsoft's already doing with existing retail partners.

If anyone's wondering why Microsoft picked Porter, you have only to look past his brief, two-year stint at DreamWorks. He spent 25 years at Wal-Mart, which is also the former employer of Microsoft's chief operating officer Kevin Turner - to whom Porter will report. Turner was at Wal-Mart for 20 years.

Porter spanned various departments at Wal-Mart, including in-store operations, merchandising, and information technology before landing as vice president, and general merchandise manager of entertainment. In that last job, Microsoft said, he served as a "strategic point of influence throughout the Wal-Mart business."

Wal-Mart is known for its antiseptic, big-box, out-of-town operations. But it remains to be seen whether Porter will bring this culture to Microsoft as it attempts to compete with the smaller, uber-hip, and urban Apple stores.

The appointment emerged as details began to appear on the kinds of upgrade paths it wants OEMS to offers from Windows Vista to Windows 7.

Microsoft tracker TechARP claims to have seen details of the proposed Windows 7 Upgrade Program, which was circulated to partners in December. OEMs were given a month to provide Microsoft feedback on the program.

The program targets consumer PC buyers, according to TechARP, and is designed to assist OEM partners in "minimizing the number of end users who may postpone acquiring a new computer because of the impending release of the Windows 7 operating system."

The program lets OEMs offer an upgrade to Windows 7 to end users who qualify.

Those qualifying must have a PC with an "eligible" version of Windows Vista, along with a valid Certificate of Authenticity (COA).

What counts as an eligible version of Windows Vista? Windows Vista Home Premium for upgrades to Windows 7 Home Premium, Windows Vista Business for upgrades to Windows 7 Professional, and Windows Vista Ultimate for upgrades to Winds 7 Ultimate.

Those not eligible are the sub-par Windows Vista Home Basic, Windows Vista Starter Edition, and all versions of Windows XP.

OEMs would not be constrained to join the program, according to TechARP.