Microsoft (Quote) CEO Steve Ballmer kicked off sales of the consumer version of its new Vista operating system (OS) and Office suite today, calling it "the biggest launch in Microsoft's history."
Sales of Vista and Office 2007 officially begin tomorrow in North America, although it has already begun shipping new product in New Zealand and other places on the other side of the international dateline. Vista and Office 2007 were made available for enterprise customers in November 2006.
Ballmer took pains to note that this launch is not an end in itself, but the start of a vast opportunity for hardware vendors and software engineers developing other forms of software running on the new Vista OS.
He noted that while many new features of future versions of the OS may be delivered online, Microsoft will continue to deliver new standard versions of Windows in order to keep up with changes in how consumers use PCs.
In addition to providing a platform for consumers, he said, Windows is an important software development platform.
"With every new release of Windows, I suspect I'll be able to tell you about how much more innovation there is to come from all of us in the industry," he said during a press conference here today.
In order to emphasize the importance of the new product launches to the vendor ecosystem, Ballmer was accompanied on the dais by executives from HP (Quote), Dell (Quote), Intel (Quote), AMD (Quote) and Toshiba.
Microsoft expects to sell more than five times more units of Vista than it did Windows 95, and twice as much as Windows XP, during the first three months of availability, Ballmer said.
According to the Microsoft chief, the bulk of these sales will come from sales of new, more powerful equipment loaded with faster processing speeds and ramped-up graphics cards.
But he said that sales will also be driven through word of mouth as customers upgrade their "Vista-ready" PCs to the new OS.
"The fact that you can get upgrades helps create momentum," he said.
Alluding to the fact that delays in the launch of Vista created hardship for PC vendors and retailers, particularly around the traditionally active holiday season, he said, "we tried hard to avoid sales slowdowns through our technical guarantee program and the Vista-ready program."
Ballmer deflected the suggestion that offering three versions of Vista is symptomatic of Microsoft's growing size and bureaucracy.
"The truth is, there are a variety of needs in the home. Some people work from home, some don't, some people have a high-end consumptive use-style, some people are looking for things that are much lower-end, and we were trying to meet that range," he said in response to a question from
Ballmer also predicted that sales momentum will build as customers follow an upgrade path from Vista Basic to Premium and Ultimate.
"The opportunity that we see to drive the technology industry, to drive PC sales, to drive new value, is huge," he said.
Executives from Dell and HP also chimed in that customer upgrades would drive more sales of new PCs.
"Many consumers will [first buy Basic and] want to have a more senior version, and that's what I think we're looking for," noted Dell CEO Kevin Rollins.
Ballmer also predicted that consumers will want to extend their Vista experience to a wide variety of peripherals and home entertainment units that are just beginning to come to market.
"Today the PC is the center of the way most people manage and control their digital lifestyle," he said. But while the central role of the PC continues, he said, "the digital lifestyle now extends much more broadly."
He cited the Internet, cell phones and smart phones and MP3 players as examples of the way the world has changed since the release of Windows 95 twelve years ago.
Vista and Office 2007 "have been designed to bring the best of these phenomena to market," he said.
"Vista is the landing point for connected entertainment in the home," he added.
Ballmer said that the design of Vista is focused on four principal areas: ease of use and excitement, security, entertainment and helping people connect.
"That's a large batch of innovation for us," said Ballmer.
Jupiterkagan analyst Michael Gartenberg agreed that Microsoft did well to bring three versions of Vista to the consumer market.
"One size doesn't fit all anymore," he
He also agreed that Vista is not the last OS that Microsoft will ship.
"The death of the operating system has been greatly exaggerated," he said.