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Is Vista Still a Flop With IT

To paraphrase Mark Twain, reports of Windows Vista's demise have been exaggerated.

Somewhat, at any rate.

Sanford C. Bernstein & Co. recently released a report that indicated Vista still isn't ringing many bells with major IT shops.

"A year of overwhelmingly bad publicity, coupled with opportunities for continued XP 'downgrades' or potentially skipping over Vista for Windows 7, look to have meaningfully eroded support for Vista and are likely to impair the product's overall adoption," the Seattle Post-Intelligencer quoted the report as stating.

That was seconded last week when analysis firm Computer Economics weighed in with early results of its own recent poll.

"The preliminary results from our annual IT staffing, spending, and technology trends survey indicate that most organizations are still not including Vista in their plans for 2008. Many are not even planning, as yet, for an eventual migration," the firm said in a statement.

"Widespread adoption of Vista could still be a year or more away, which raises the possibility that Microsoft could begin to see its dominant share of the corporate desktop market erode with this desktop upgrade cycle," the report continued.

Microsoft (NASDAQ: MSFT) does not break out sales of Vista from sales of its other "supported" operating system -- Windows XP.

However, tech analyst firms disagree on whether Vista is already past the prime it never had or is just beginning to take off.

In fact, sales of Vista to consumers are going swimmingly, according to Microsoft.

CEO Steve Ballmer said in late May that retail sales of Vista have now passed the 150 million unit mark. Additionally, by now, the vast majority of new PCs sold at retail come with a copy of Vista pre-installed.

In addition, despite all the talk in the media of the new fad of users buying a PC with Vista and then downgrading (even at additional cost) to XP, reports of that occurring have been hard to verify, say several analysts.

"I haven't seen any reliable numbers on the numbers of people who are buying Vista and downgrading to XP," Charles King, principal analyst at Pund-IT, told InternetNews.com.

That doesn't mean that some large corporate customers aren't downgrading, of course. King said, however, that the slower adoption rate is as much the result of a poor economy as anything else.

"In the middle of a severe economic slow down, you have businesses tightening their belts," he said. That is causing companies to put off buying new PCs, which is still the primary avenue for Vista to enter the enterprise – a long-established pattern for new versions of Windows.

Gaining corporate acceptance

Tim Bajarin, president of Creative Strategies, has been hearing the same kinds of anecdotal evidence that Vista may not be having the sort of corporate impact that a new version of Windows would typically create by this stage in its lifecycle. However, he notes that at least one typical behavior has started to kick in.

"[Corporations] are now accepting Vista coming in on new machines, even if they're not replacing older machines as quickly," Bajarin said. Typical of most Windows roll outs, many corporate IT staffs will take the new system off of new PCs coming into their shops and replace them with the earlier operating system – until a point where the new system has achieved enough momentum that they finally start leaving it in place.

That appears likely to continue ramping up as Microsoft discontinues availability for Windows XP through most outlets as of this week.

In addition, Microsoft shipped Vista SP1 to volume licensees in late February. At least until recently, the conventional wisdom has been that conservative IT shops wait for the first service pack of a new Microsoft operating system to ship before they begin to deploy it.

This time the cycle appears to be tardy.

To be fair, SP1 has only been available for just short of four months, so it's hard to determine trends. Still, SP1 didn't cause any sudden jump in adoption either, according to an April report from IDC.

"Microsoft's release of Service Pack 1 for Windows Vista during the past quarter is expected to eventually raise the desire for businesses to deploy new PCs using Vista, but the impact in 1Q 08 was very slight," IDC said.

So what's still holding Vista back? For many IT shops, it just offers too little for the increased hardware requirements and loss of some application compatibility, leading to increasing costs at a time when budgets are being squeezed like a toothpaste tube, according to one technology consultant.

"Most corporations are not really eager to jump into Vista [because of] the inertia problem," Ajit Kapoor, principal and managing director of The Kapoor Group, a global consultancy for aligning business with IT expenses, told InternetNews.com.

Aero Glass interface isn't enough

What he means is that Vista, even with SP1, is not compelling enough to trigger full-scale upgrades in many large shops. XP is very stable by this point, plus it is very secure so Microsoft's pitch that Vista is more secure is not a large driver for IT. That leaves the Aero Glass user interface and other graphics features to drive adoption, or not.

"Aero Glass is fun but it doesn't increase productivity," Kapoor added. Before starting his own consultancy, he was chief architect for the CTO’s office at Lockheed Martin, and held similar positions at Allied Signal and General Motors.

What about waiting for Windows 7?

"That's also a consideration," Kapoor said. "[Some large clients] are waiting to see what Windows 7 does, but it's not with any urgency," he added.

Bajarin agrees.

"They'll wait for the older XP machines to die and bring in new PCs with Vista [to replace them], but I think a lot of them will also wait for Windows 7," Bajarin added.

Many observers warn, however, that waiting for Windows 7 may not be a smart move. Windows 7 – the codename for the next major release of Windows – is currently scheduled to hit the streets in late 2009 or early 2010. Of course, when Windows 7 is released, corporate shops will have to go through the whole testing and deployment process, so actual deployments could be delayed again.

Meantime, several leading analyst firms are predicting another record-breaking year for sales of new PCs. For example, earlier this month, Gartner pegged sales worldwide at 297 million this year, a 12.5 percent jump from last year.

Research firm IDC echoed Gartner, but was even more aggressive. IDC analysts predict sales of 310 million PCs this year – a 15 percent increase over 2007.

"Keep in mind that we're still shipping 300 million new PCs this year and the bulk of those are Windows Vista machines," Bajarin said.

In fact, Gartner reported in May that Vista is actually making headway inside some corporations – partly replacing aging Windows 2000 deployments but also slowly eating away at XP Professional numbers as well.

According to Gartner's report, XP Professional usage fell from 71 percent in 2007 to an expected 63 percent this year, and will fall to 47 percent next year. Meanwhile, Vista adoption is slowly picking up steam, partly because Microsoft shipped Vista Service Pack 1 (SP1) last quarter. So a trend appears to be emerging.

The Gartner report has Vista usage rising from 4 percent last year to 19 percent in 2008, and then doubling to 39 percent in 2009 as corporate deployments kick into gear.

"As a percentage of the professional installed base, Vista is in a more advanced position than XP was at the same point [of its lifecycle]," George Shiffler, a director of research at Gartner who compiled the data in the report, told InternetNews.com back in May.



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