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Near-final Vista Service Packs Arrive

Microsoft this week shipped release candidates, or RCs, for both Windows Vista Service Pack 1 (SP1) and Windows Server 2008. Additionally, the company disclosed that it will release SP1 for Office 2007 next Tuesday.

"Microsoft made the Windows Vista SP1 RC available to Microsoft Connect [today], and tomorrow the RC will be made available to MSDN and TechNet subscribers. In addition, the RC will be available to the public next week via Microsoft's Download Center," a company spokesperson said in a statement e-mailed to

In a separate notice, a posting to Microsoft's Upstate NY Technology News and Events blog announced that SP1 for Office 2007 will ship next week.

The releases are important milestones for Microsoft as it begins to move into next year. "What it does is says, 'We're getting close to the day when we're going to ship this stuff'," Michael Cherry, lead analyst for operating systems at research firm Directions on Microsoft, told

Final release of Vista SP1 is slated for the first quarter of next year. Release of the second RC for SP1 this week is viewed as a strong indication that will occur on schedule. (In Microsoft parlance RC is the final stage of testing before a product is officially released – thus the use of the term "candidate.") The first RC for Vista shipped in mid-November.

The company just announced Tuesday that SP1 will eliminate many of Vista's most vexing features – like Windows Genuine Advantage's so-called "kill switch," which disables features of the operating system when it appears to be counterfeit. Many users have been outraged when Vista downgraded the behavior of legally licensed copies in error.

Microsoft this week also touted the February 27, 2008 launch gala it has planned for Windows Server 2008, SQL Server 2008 and Visual Studio 2008 as the kickoff event for the "biggest enterprise launch wave in the company’s history."

If the time Microsoft has invested in those three products is any measure, that is probably a true statement. Windows Server hasn't had a major upgrade since it shipped in 2003, while SQL Server and Visual Studio last received major updates in 2005. In addition, Microsoft officials committed to spending $150 million in "outreach and demand generation" worldwide for the three server products.

Given the pending release of Vista SP1 and Office 2007 SP1, as well as their importance to enterprise markets, those service packs are also almost certain to be featured at the February gala – perhaps even relaunched.

All of that will likely, say analysts, help add up to a healthy bottom line for Microsoft's fiscal 2008, which ends next June 30.

"I'm sure it all helps their bottom line next year," Dwight Davis, vice president at researcher Ovum Summit, told "The servers have been very strong players [in the market] and there is strong demand for their forthcoming versions," he added.

This all comes at a good time for Microsoft.

Last fiscal year, for instance, the company finally broke the $50 billion mark with $51.12 billion in revenues for fiscal 2007, despite what many analysts and pundits declared were slower than expected sales of Vista. In addition, when it announced results for the September quarter in late October, the company reported its best fiscal first quarter since 1999, bringing in revenue of a cool $13.76 billion.

In both cases, Microsoft officials said strong sales of Vista had helped drive revenue growth. The current quarter – topped by the Christmas buying season – is also expected to be a strong one for the company. For the entire fiscal year, which ends June 30, 2008, Microsoft officials have predicted revenues ranging between $58.8 and $59.7 billion

Many analysts expect that the arrival of Vista SP1, along with that of Office SP1, will bootstrap the long-awaited enterprise wave of customer deployments of Vista. The coming wave of server products will likely reinforce that, and it all will likely contribute to fattening Microsoft's bottom line.

"[This wave of products] has the potential to do that," Cherry said.

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