Microsoft's top Windows business executive said on Monday that for all his excitement about Windows 7, he doubts the release of the operating system will lead to a significant spike in PC sales.
"History would tell us that generally as you ship a Windows release into the market... the bump is very modest," Microsoft senior vice president Bill Veghte said at the UBS Global Technology and Services Conference. "You will see a little bit, but it is modest."
Veghte announced on Tuesday last week that Microsoft plans to ship Windows 7 on 22 October. The company will also have a program in the coming weeks through which those who buy a new PC with Windows Vista will get a free or low-cost upgrade to Windows 7. A leaked memo from Best Buy suggests the program will kick off at the end of this month.
On the business side, Veghte said that there is "very good enthusiasm around Windows 7", but that will not be the biggest factor in the decision by corporations about when to upgrade their computers.
"It will get drowned by the macroeconomic environment," he said in the speech, which was webcast on Microsoft's investor website. "As the macro environment comes back, people will have to buy new PCs. People aren't using PCs any less."
Veghte was pressed on whether Windows 7 will help Microsoft see improvement in the average selling price of Windows, which has taken a big hit because of the rise of netbooks, a low-cost notebook PC variant.
"It's pretty hard to tell," Veghte said. "I think in this economic environment it is very hard to see us at the mix we had [during Windows XP and the beginning of Windows Vista]. As we come out of the economic downturn it's a very interesting question."
Veghte was also asked about Microsoft's recent cost-cutting effort and said it is something the company has not done in the 19 years he has been there. He said every expense has been questioned as to whether it is essential.
"It has been line by line," Veghte said. "As a culture we've got to go through and really make the hard trade-offs. I think it's a wonderful thing for the company, for the culture."
As for whether Microsoft will offer a cheaper upgrade for Windows Vista users, Veghte didn't give a specific answer, but did say Microsoft wants to make sure that the upgrade path is "very smooth" from a pricing perspective.
Talkback
Why upgrade an operating system if it offers no benefit? Vista has been critically slammed as it offers no real benefit over XP. Windows 7 is a coat of thin lipstick on Vista. Windows 7 should have been SP2 for Vista. All Vista users are being ripped off. The life cylce of an OS should be nearer 10 years not 2-3 years.
All Microsoft users are being ripped off. It has always been thus.
Check out MS's licensing model around SharePoint or Exchange Server. It's a bloody scandal. A strategy of platform locking, stack dependency and CAL-hell means the customer always gets screwed.
The only reason why people might upgrade to Win7 is to keep the security patching / anti-virus plates spinning. There are few functional reasons to do so.
There are plenty of alternatives you know. Ignorance is one thing but if you don't even bother to look for alternatives you _deserve_ to get ripped off by your incumbent supplier.
although i hate vista and had a big bustup with bill gates the people who suceed[suck] in using it quite like it and so im told thers few bugs ive bought it and told fujitsu i want it off my p/c they wanted 40quid to give me drivers i told them and microsoft were to stick there vista and there drivers for XP
I like the "Lipstick on Vista" analogy. But I like even more the simple statement "what can Win7 do that XP can't?". To put an even finer point on it, "Can Win7 even do as much as XP?". Obviously it can not, since Microsoft has now stooped to including a "Virtual XP" mode in Win7 to try to coax corporate users to switch.
I likewise agree that Win7 should be nothing more than a Service Pack for Vista - but Microsoft knows that the vast majority of their customers are plenty stupid enough to ignore the fact that they were ripped off by Vista and blindly give them even more money for Win7.
I use this analogy over and over again: Would you accept this kind of service, and this kind of behavior, from any other company, for any other product that you purchase? If you bought a new television, and it turned out to be seriously deficient or outright defective in a number of ways, would you then not only quietly accept the fact that it didn't work, without demanding compensation, but even go so far as to PAY for a replacement, from the same company, with absolutely no guarantee that it will work either? Replace "television" above with any other device, appliance, vehicle, or anything else in your home, and think about whether you would accept the kind of treatment from any other company that you get from Microsoft.
jw
Windows 7 could well stll turn out to be a 'Service Pack' for Vista. How its defined is by the price charged for a Vista->Windows 7 Upgrade - a minimal price - it effect becomes a service pack.
In the past they have offered a discount 'window' / mail in rebate.
on average -I'd put a guess on $119 with a short term $70/80 rebate. so £89 become £29/39 in the UK.
It will be interesting if they class XP upgrades different to Vista.
The recent announcement of a $29 upgrade for Leopard->Snow Leopard will mean a few hurried boardroom meetings. I'm pretty sure reinactments of the Apple Graphic showing the $129 full price being stripped of the $100 are being done on whiteboards at MS as we speak, in respect to Vista. ''Me too' is MS's new philosophy.
Compare this to o2's recent iphone 3G S (S - for scandal) pricing scandal here in the UK, and MS can see the sort of backlash that could occur regarding Windows 7. You can have a very good product but try to pretend its so good that people will pay anything for it - you'll feel the heat. That heat for MS might turn nasty given Vista's patchy history.
You get the feeling MS want to draw a line in the sand with Vista- Windows 7 is that line. Windows 7 doesn't have that 'arrogant' boastful feel to it, just a solid no-nonsense upgrade - consolidating the past (Vista) as 'best it can'.
The cheap snow leopard upgrade offer by Apple is clever (and contractictory UK o2's iphone approach)- their install base is far smaller than MS, they make money on the hardware. Apple may have chosen a minimal profit on this move to enable the bigger picture which is to undermine MS.
This sort of cheap upgrade option would cost MS far more if it takes a similar move (much larger install base) in the process undermining their strategy somewhat - but I think it will happen but will be a 'one off'. Windows 7 is required across the board to leverage new revenue streams apart from the OS. It allows them to consolidate support costs, yet still charge premium customers the same.
People have become complacent, they couldn't care less if windows xx is a quality product. The EULA absolves MS of all responsibility so they couldn't care less what the public thinks, all they care about is the amount of money in their coffers. They have been forcing flawed software on the public for over 25 years, and not once has there been an offer to refund purchase price or make a recall. They just put out a new version and force you to pay for an upgrade, and go their happy way, knowing the user will do nothing. Jamie is right, people will not accept this kind of shoddy merchandise in any other product, so why do it to software?