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More IT Shops Plan to Wait for Windows 7

Microsoft executives put their best face on Windows Vista sales at the company's annual financial analysts meeting Thursday when they presented their year-end results and year-ahead plans to stock pickers.

However, despite selling some 180 million licenses for Vista to date, two new surveys of IT decision makers paint a significantly bleaker picture of Vista's near-term prospects in the enterprise.

Translation, large-scale deployments may have to wait until Vista's follow on release -- codenamed Windows 7 -- ships a year and a half from now or so.

A six month survey of 50,000 users in 2,300 large to very large enterprises, released this week by Forrester Research, found that even after Vista Service Pack 1 (SP1), only 8.8 percent of Windows users are running Vista so far. That compares unfavorably with 87.1 percent for Windows users running Windows XP.

In addition, this latest survey goes against a pre-SP1 survey that Forrester released late last year.

Other analysis firms have also been tracking sluggish uptake of Vista among corporate customers lately, even after the first quarter's release of SP1.

For instance, Sanford C. Bernstein & Co. reported in June that "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," according to a copy of the report obtained by the Seattle Post-Intelligencer.

That was seconded in June when analysis firm Computer Economics weighed in with early results of its own 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 report stated.

Now, another new survey, released Tuesday by KACE Networks which commissioned the report from King Research, reinforces Forrester's latest report. The survey, a follow up on a similar poll last November, found that of 1,162 IT professionals queried in June 2008, 60 percent have no plans to migrate to Vista. That's up from 53 percent in November.

Additionally, 92 percent say the delivery of SP1 had no impact on deployment plans or lack of them.

It seems like a classic case of CEO Steve Ballmer's mantra that Microsoft's biggest competitor is its own installed base coming true in spades. Still, it goes against what has become common wisdom regarding new operating system releases over the past 10 years.

Typically, corporate IT shops will hold off deploying, and often testing, a new Windows release until Microsoft issues the first service pack usually assuring that early bugs are squashed and compatibility and device driver issues are resolved.

This time around, even though XP is nearly seven years old and getting very long in the tooth, many shops appear to be sticking with the devil they know over the devil they don't.

"The evidence that I've seen goes along with the Forrester report so far as Vista adoption in the enterprise," Charles King, principal analyst at Pund-IT, told

Some of the hesitancy may be driven by tighter IT budgets in a continuing uncertain economic climate.

"I get a sense that people are holding their breath, that it's not a time to go into debt to buy new PCs," said King, who has no relation to King Research. "Risk assessment, at some point, is going to impact IT sales."

"It seems to be more of a question of companies asking how much longer can we get along with XP," King added.

Whatever is causing it, the sluggish market for Vista has Microsoft brass running scared.

"On the enterprise side we saw a very strong acceleration post Service Pack 1. You saw those enterprises accelerating that deployment . we're seeing that track very consistently with the deployment cycle we saw in enterprises around XP," Bill Veghte, senior vice president of the Windows Business Group, told analysts at Thursday's meeting.

One feature of Vista that Microsoft has hammered in with users has been its emphasis on security.

"Today, you have a platform and a product that is 62 percent more secure than what we delivered in Windows XP SP2 and effectively the conversation with businesses and consumers relative to the security of Windows is not an issue for us based on that," Veghte said.

However, despite or perhaps, because of increased security, there have been continuing complaints that the system is sluggish and application incompatibilities abound points that analysts raised with CEO Ballmer at the meeting.

Windows 7, meantime, promises to be a significant update to Vista and will include a system kernel that's based on both Vista as well as Windows Server 2008. However, the said publicly stated that rumors that Windows 7 would feature a new, much smaller kernel, are unfounded.

Indeed, even Ballmer seems to recognize that many customers may wait for Windows 7.

"It's [Windows 7] going to be quite compatible and the design point is compatible from the get-go in large measure," Ballmer told the analysts.

Just assuaging financial analysts' fears may not do the trick, however.

"I don't know a single company that's deployed Vista," Rob Enderle, principal analyst at the Enderle Group, told "The cost of migration in terms of disruption [due to app incompatibilities] has just been too high."

Even analysts who see all of Vista's warts, however, have to date recommended not waiting for Windows 7. That is, just because it's coming doesn't mean that Windows 7 will be a panacea.

"I think an impressive number of folks in enterprises are going to hold onto XP until Windows 7 comes out [but] I don't think that's a good idea," Enderle said.

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