When Microsoft released its earnings report to Wall Street on 25 October, it surprised investors and the technology industry by reporting its best rate of revenue growth (27 percent) for a quarter since 1999. Microsoft credited its revenue growth to strong demand for Windows Vista, Microsoft Office 2007, and Halo 3.
No-one was surprised to hear that Office 2007 and Halo 3 were part of the picture. Office 2007 is a strong upgrade that closely integrates with other Microsoft communications and collaboration products, and it features the biggest overhaul of the user interface in almost two decades. As for Halo 3, sales of the latest edition of the Xbox 360 game broke $300m (£144m) in its first week.
However, the fact that Microsoft mentioned Vista as part of the revenue boost caused a lot of people to do a double take. The newest Windows operating system has been received coolly by consumers and with icy indifference by most businesses.
Has Vista been getting a bad rap? Is it quietly gaining mainstream momentum? Or is Microsoft spinning the numbers to make Vista look like it is performing better than it really is?
Cool consumer reception
On the consumer side, Windows Vista sales are closely tied to new desktop and laptop sales. At retail outlets, Vista is now pre-loaded on 95 percent of all desktop PCs and 91 percent of all laptops, according to CNET News.com. In 2007, worldwide PC shipments have grown by 10 percent and will clear $200bn for the year, according to Gartner.
For Microsoft's fast-paced first quarter that it just reported on, the client business unit (featuring Vista) reported $4.14bn. So it's clear that a lot of Vista's revenue growth is coming from the momentum in PC sales. The question is whether Vista is driving new PC sales or is simply benefiting from growth in new markets and natural upgrade cycles. One thing that is helping Vista's revenue numbers is that a lot of users are opting for the two higher-priced versions of Vista — Home Premium and Ultimate.
The consumer version of Vista has certainly not received rave reviews but there are some clear benefits for home users, such as improvements to parental controls and better handling of digital photos, that at least make it palatable to most users. On the business side, the benefits of upgrading to — or even using — Vista are not as clear. In fact, there are even some obstacles.
It would be easy to chalk up Vista's slow adoption rate among businesses to IT departments' natural tendency to drag feet. The truth is that there is a deeper scepticism
The business response to Vista
Businesses and IT departments are notoriously slow to adopt new software. The benefits have to clearly justify the resources it takes to deploy the software and retrain staff on how to use it. However, it would be easy to chalk up Vista's slow adoption rate among businesses to IT departments' natural tendency to drag feet. The truth is that there is a deeper scepticism: 46 percent of IT professionals questioned as part of an InformationWeek Research survey in May stated that Windows Vista fell short of their expectations.
When making the pitch to businesses to upgrade to Vista, Microsoft has been focusing on three areas of improvement:
- Security — With User Account Control (UAC), users no longer need to have local administrator privileges on their machine to run software and do standard functions. Even for those who have admin access, UAC requires direct consent for a lot of higher-level activities to block malware from executing in the background (in theory). There are also important security enhancements to Vista's version of Internet Explorer 7 to block web-based attacks, which are now among the most common vectors of attack for malware.
- Manageability — Vista includes improvements to OS imaging, which IT departments have adopted en masse to simplify the standardisation and deployment of new PCs. There are also Group Policy improvements that make it easier to centrally control and manage machines.
- Mobility — Microsoft has integrated its tablet PC software into Vista Business and Vista Ultimate, rather than making a completely separate version of the OS, as was the case with Windows XP Tablet PC Edition. Vista Business and Ultimate also support ultramobile PCs (UMPCs). The improved mobility support in Vista can reduce total cost of ownership by 14 percent, from an average of $4,407 (£2,121) in XP to $3,802 (£1,830) in Vista, according to a Wipro and GCR study sponsored by Microsoft and published in September 2007.
Even with cost savings, the benefits in manageability and mobility provided by Windows Vista are still incremental improvements and not enough to…
Talkback
"If Linux was going to make a move on the business desktop market, it would have happened years ago."
It is only recently that Linux has achieved the ease of installation and use that enables it to become a viable alternative to Microsoft's offering.
I agree completely. The Linux development model is incremental and pluralistic. This means lots of people contribute to it and it is released in small steps rather than big leaps (followed by lots of PR monkey shaking to convince people it isn't a pile of untested crap).
Given that the desktop market is monopolised by Microsoft it is unlikely that a competitor to Windows, no matter how good they are, will be adopted tsunami-fashion.
It's all about attrition.
Anyway, the biggest commercial opportunity is using Linux as an OS for network services.
The EU did do one thing right. They sued Microsoft and they so far have made it stick.
I actually think the sales figures for Vista reflect, as the author indicated, most buyers don't have a realistic choice. Its Vista or Xp or nothing. Microsoft doesn't really care whether they sell XP at Vista prices or Vista at Vista prices. The sales figures are to keep the stockholders mollified.
Working in the business, I know that an IT department has an incredible task on its hands to get management to OK a move to Linux. Management wants to make safe, non-risky decisions. Going with Linux is still risky for most managers. You have to overwhelm them with financial benefits that can be refuted by a slick salesman who's got "90% market penetration safe/secure" Windows as a product.
Maybe Microsoft has made a more secure product but everybody I've talked to who's actually run Vista say they don't like it, or they only like parts of it. All of them though complain about how hard it is to use and the annoying security pop-ups. I tried the Beta and the RC release and they both drove me nuts. That was when I decided to drop my interest in Vista.
While all of this Linux rollout planning is going on, the Linux-leaning IT guy is still fighting the fires started by inept Windows users or the virus-infestations that occur after just a key-click! Because the Manager wouldn't pay for AV software licenses for all the desktops, "because it's too expensive"!
What most managers don't understand though is that Vista is enough different from XP and certainly Win2K that using a desktop Linux distro is as much of a change for the users as going to Linux. There is as much user training necessary because of all the little key-click sequences that the typical user has memorized are now all junked. A whole new sequence of strokes has to be learned for turning out the documents.
Open/Star Office is the biggest helper a Linux IT admin has, if he can train the typical office worker to use OO, then most of the work to train the user is done. Show them their "home" folder with their name on it and things will be a lot easier. Just don't tell them where it is physically and put it on the file server and then you've got your backup problems covered. Do worker at a time and you can transistion the entire office easily. Maybe get everybody used to the home folder idea even on the Windows boxes so its not an issue when they get Linux.
What none of these articles every state is how many PCs still have Vista on them 10 minutes after they've been taken home
First thing I did when I got my new PC was to fdisk the Hard Drive and Stick XP/Linux combo on.
Vista is rubbish and MS know it. They might have sold x million copies but the question remains how many of those X millions have been replaced with XP or Linux?
I downloaded an install Fedora on my PC.
Took 12 minutes to install and had a working system. Now using Linux at home more or less exclusively.
Windows takes that long just to boot up and then continually chews the hard drive anytime I so much as move the mouse (and no I don't have 1201021020102 applications running at the same time).
Linux barely flicks the hard drive.