Microsoft Vista Hits New Problems

Microsoft's love of operating systems is a direct result of its bottom line, with probably 40% of its revenue owing to the product line. Key to any successful operating system introduction is business acceptance - companies buy in bulk, and if you're Microsoft, they also condition people to use the latest version. Only, evidence continues to mount suggesting that's not how things are going this time. According to this Computerworld UK article, studies on both sides of the Atlantic suggest that IT professionals are not keen to introduce Vista into their companies:

The survey, echoing one from Forrester last week, shows most IT professionals are worried about Vista and that 44% have considered non-Windows operating systems, such as Linux and Macintosh, to avoid the Microsoft migration."

Clearly many companies are serious about this alternative, with 9% of those saying they have considered non-Windows operating systems already in the process of switching and a further 25% expecting to switch within the next year," the report "Windows Vista Adoption and Alternatives" reads.

Microsoft has been concerned about Linux for a long time, and that has only grown as some versions of Linux have become more user-friendly. But this is the first time I can remember seeing that large a part of the IT world considering not just Linux, but the possibility of moving back to the Mac, which would have its own slew of problems, as would trying to manage a selection of operating systems - and the versions of business applications they'd need.

A New World on the Business Desktop?

There are three threads on Slashdot.org that, taken together, offer an interesting look into what might be happening in corporate computing. A Computerworld article quotes a study from a third party software vendor indicating that a vast majority of businesses have any intention of moving their computers to Microsoft Vista:

In a just-released poll of more than 250 of its clients, PatchLink noted that only 2% said they are already running Vista, while another 9% said they planned to roll out Vista in the next three months. A landslide majority, 87%, said they would stay with their existing version(s) of Windows.

Those numbers contrasted with a similar survey the Scottsdale, Ariz.-based vendor published in December 2006. At the time, 43% said they had plans to move to Vista, while just 53% planned to keep what Windows they had.

That's a big difference from what I've seen in past cycles. Old versions of Windows would stick around for years - far longer than most people generally thought. I can remember that when Windows 95 came out, at least a third of companies were still running some amount of Windows 3.1 several years after the new platform's introduction. Businesses prefer the devil they know.

But if this study is actually representative, then the results have to be stoking the fear furnaces in Redmond. The company simply cannot survive financially without heavy adoption of new versions of Windows, and business buyers have generally been more pervasive adopters. New machines will likely run with some version of Windows, but Microsoft also needs older machines to upgrade. Here's another clip from the article:

Although Microsoft recently announced it had shipped 60 million copies of Vista so far, it has declined to specify how many buyers are businesses, or even what percentage of the estimated 42 million PCs covered by corporate license agreements have actually upgraded to Vista.

What is the problem? The article speculates that it may be because of changed perceptions of what Vista would add from the security front. My guess is that the reluctance has much more to do with the many problems that people have reported with Vista - often slow operation, even on machines designed for it, and the difficulty in installing the operating system on existing machines. Comapnies like hardware to last at least 3 to 5 years. If you want to upgrade to Vista, you pretty much have to go for new or very recent hardware, as I understand it. That means the software has an effective added cost of at least hundreds of dollars, which is really expensive, particularly if you have to replace a whole lot of machines.

Attempts to supplant Microsoft's dominance in the office software world by an open standard not owned by any one party seem to have gone nowhere. LinuxWorld basically threw in the towel on the OpenDocument standard. So Microsoft is probably safe on that front - for now. But if the OS landscape starts to change, then its grip on other aspects of software life might also loosen.

And now we add the third thread. CareGroup CIO John Halamka, an influential chief information officer, has been publicly testing various desktop operating systems, reporting on progress in CIO Magazine, and sees a shift in strategies that is starting to make sense:

"A balanced approach of Windows for the niche business application user, Macs for the graphic artists/researchers, SUSE for enterprise kiosks/thin clients, and Ubuntu for power users seems like the sweet spot for 2008," says Halamka. "I’ll continue to watch the marketplace evolve and report on my progress. For now, the only devices I’ll be carrying are a Dell D420 with Ubuntu Feisty Fawn and a BlackBerry 8707H e-mail device."

If a few other influenctial CIOs also start moving down this route, business as a whole could see the biggest single computing realignment since the shift from the mainframe to the PC.

It's a Case of Out with the New, In with the Old at Microsoft

An article in Computerworld (though it comes via PC World) says that Microsoft will see increased Windows XP sales in 2008 than in 2007, even though Vista is available:

During a conference call with analysts following the earnings results release Thursday afternoon, Chief Financial Officer Chris Liddell said the company has changed its fiscal year 2008 forecast from an 85/15 split in sales between Vista and XP to a 78/22 split. Windows XP sales will, in other words, be nearly 50 percent higher in the next 12 months than Microsoft had estimated earlier.

Alright, so it's not that Vista is going away, or even that it's selling less than XP. But this really is an astounding situation for the company. It's continuing to set aside revenue into the "unearned income" category for the year because of "undelivered elements." That translates into having to ship unannounced upgrades and enhancements to Vista. Another way of saying that, I think, is that Vista has too many problems and gaps, which shouldn't surprise if you've followed stories about the product, or even know someone who has shifted to it.

Microsoft is planning to stop selling XP to resellers and retailers after the end of next January. What does this all say about Vista specifically, and the software business in general? The industry is on a painful tredmill. They sell products, which probably don't really need to be replaced for years, and then keep adding new features that few people ask for and create new file formats to make older versions obsolete. This is why Microsoft and other companies are trying to push software as a service - not because it's good for customers, but because they're trying to get themselves out of the pricing jam they've been in for a good 20 years and get people locked into a leasing model. There you know customers will be regularly paying money.