Money talks. In particular, money in the stock market speaks eloquent volumes about how companies are perceived. It doesn't matter what analysts, journalists and spin doctors say - cash has the final word.
So it is not surprising that a study from Carnegie Mellon University shows that on the day a security vulnerability is announced, a company can expect its share price to drop by an average of 0.63 percent. Bad news brings you down.
But not, strangely enough, if you're Microsoft. That share price sees a dip of around 0.3, compared to 0.9 for everyone else. The researchers think this might be because people are familiar with Microsoft products and thus don't need to judge them on bad publicity. Or it might be that people are desensitised by the large number and high visibility of Microsoft security alerts. That's more likely.
Burdened with anti-malware programs, endless security updates and zombie-generated spam, the average Windows user has more than enough familiarity with the quality of the software. To put it bluntly, expectations are very low -- and the stock market's weary shrug with each new announcement demonstrates the company's true public image with unambiguous clarity.
Microsoft is notoriously thick-skinned about public criticism. For decades, it has responded to even the best-founded complaints by saying that it is right and the critics are wrong. It can be hard at times to work out whether the company really believes this, whether its reflex denials and aggressive recasting of the facts are so deeply ingrained that it is actually unable to perceive anything else.
Yet even Microsoft doesn't ignore money. It should realise that this anomalous market behaviour is due to a major mismatch between how it thinks of itself and how the rest of the world sees it. With other companies, security problems are seen as an unpleasant surprise: with Microsoft, they're seen as just part of the cost of doing business with Redmond.
This is not healthy, and it shows that despite the recent promotion of security as a key company value the rest of us just don't believe it. Microsoft may treat everyone from users to international courts with equal disdain, but if it carries on ignoring the evidence of the markets it will erode the faith of the one group it cannot afford to alienate -- its shareholders. Their money is talking, and it would be wise to listen to what it says.
Talkback
Arrogance kills. And me think Microsoft wrote the book on arrogance.
yea like theire gonna give a stuff about this article
am getting increasingly frustrated with the massive sematism against microsoft on this site - jouralism is about providing balanced views -which this clearly is not. there are many explainations about why MS doesnt experience such a drop in share price - as most MS shares are owned by large hedge funds or institutions, this actually could display that these companies think that MS will fix bugs faster and hence have little impact on the company's future .... please attempt to give a balanced view, guys!
Err, this is an editorial opinion, not a news item.
If the reports seem to be anti-Microsoft, perhaps it is because people in general are starting to get fed up with them. Perhaps they are starting to realise that there are betters ways, better systems, better software, and that some of the licencing and customer lock-in tactics that Microsoft employ are no longer acceptable.
Quite simple - the continuous patching is just another part of the Microsoft "Tax" - we are used to it and just keep paying it in terms of our time.
However, they have probably cried "wolf" too many times - they will find it hard to persuade people to upgrade from XP. It does everything anyone could ever want - the only possible upgrade would be if the next OS was more secure.
And I doubt that anyone will believe that until it has been out there in the field for a year with virtually no patches.
A secure OS (from Microsoft) is like the end of the rainbow - you can see it but never reach it.
I suspect that the insensitivity of the market is because Microsoft is unaffected by security bugs. If the security bugs were in MS's Financial Dept, or online store, you'd see another level of response, I suspect. However, no matter how many and how severe the bugs in MSIE, there'll still be another 10 million MSIE users by year end... And the same goes for the OS. The only significant competitor, Linux, is still rather harder for the newbie to get to grips with (less support from stores, harder to install without a helpful friend, reduced hardware support - the pain of migrating is broadly equivalent to the pain of anti-spyware, anti-virus, and changed UI and applications - the major cost of conversion is staff training, not H/W, apps and OS, so there's no inbuilt pressure to change - until Linux or MacOS on Intel offers a clear employee performance benefit, the pressure to change will be low, and MS will continue to be unaffected by its level of attention to security)