The Way Business Is Moving published by
Issue Date: November 2007

Many businesses see no reason to upgrade to Vista

November 2007
Jason Stamper

According to a survey by ComputerWire's sister publication Computer Business Review, among 300 senior IT decision-makers in the UK, most enterprises delaying an upgrade to Windows Vista on the desktop are doing so because they 'see no advantage in upgrading'.

As ComputerWire reported recently, the same survey found that fewer than 2% of UK-based companies have upgraded all their desktops to Windows Vista. Only 1% said they have already upgraded all desktops, and just shy of 5% said they have begun a Vista desktop upgrade program.
Of those surveyed, 6,5% said they will upgrade in the next six months, while about 56% of survey respondents said they will have upgraded their desktops to Windows Vista within the next two years.
But asked "what, if anything, has delayed your firm upgrading to Vista?", the responses were mixed and 53% said they could see no advantage in upgrading.
The next biggest reason for delaying an upgrade to Vista fell under the 'problems with home-grown or other applications supporting Vista', cited by 13% of respondents.
Of respondents, 12% cited technical restraints, such as under-powered desktops currently deployed in the enterprise, while 5,3% said the reason for a delay was down to resource constraints related to staff, and 4,6% said they were delaying an upgrade due to budget constraints.
A sizable minority, 11,8%, opted for the 'other' category when asked why they had so far delayed an upgrade. Reasons cited in this category included 'waiting to ensure its stability', suggesting that some companies prefer to learn from the experience of early adopters and be sure the release is stable before they dive in with an upgrade plan of their own.
Other reasons cited in the 'other' category were: 'security', 'considering migrating to thin clients', 'technical restraints and application support', 'a need to understand the cost/benefit', and 'alignment with customers who are not upgrading'.
Other reasons cited included 'PC cycle refresh constraints', 'training', and one respondent that said a Vista trial had thrown up problems with the use of Internet Explorer, though the survey did not reveal whether that user had found problems with IE 6 on Vista, or the latest iteration, IE 7.
As ComputerWire reported in February, Microsoft's CEO Steve Ballmer called for financial analysts to cool down their predictions on how many copies of Windows Vista the company would sell between then and 2009 worldwide. After addressing analysts the week before, they had taken him at his word, issuing cautious but optimistic research notes that, regardless, helped knock almost 3% off Microsoft's share price at that time.
"People have to understand our revenue models because I think some of the revenue forecasts I have seen out there for Windows Vista in fiscal year '08 are overly aggressive," Ballmer said at the meeting. He told analysts that much of Microsoft's operating systems sales growth comes from people buying new PCs, but that analysts growth models for Microsoft are more ambitious than their models for PC makers, something he called a 'weird disconnect'.
"There is a disconnect between what people think is the growth of the PC market and what they think is Vista growth," he said. "So, either you have to increase your forecast for the total PC market, and then Vista will do just fine, or those two things are out of whack. If Vista is going to drive a major sort of surge in PC market growth rate, you would think that would also show up in what people [analysts] think about HP, Dell, Intel. My basic assumption is we will see a small surge."
The company had made discouraging noises about Vista earlier in the week, issuing a short statement asking people to stop speculating on what the next Windows might look like and when it might come.
Vista was released to new PC buyers and retailers on 30 January, and there was intense speculation on how much excitement Microsoft had managed to create.
In terms of retail sales of Vista in a box, Ballmer said he believed most of that up-tick would be concentrated in the first few months of the software going on sale. He said he doubted that this would carry over into Microsoft's fiscal 2008, which began in July 2007.
Analyst estimates for fiscal 2008 growth in Microsoft's client business unit, which includes Vista, is around the 9% mark. Ballmer said that analysts should consider that rather than creating huge spurts of new growth 'a new Windows release is primarily a chance to sustain the revenue we have'.
"Every new Windows release is not necessarily a huge revenue growth opportunity, but if we do not have exciting, fantastic, outstanding Windows releases, there will be either a drop in the PC market, and/or there will be uptake of Linux and Mac and all of these other things," he said.
Ballmer acknowledged that Apple has gained market share against Windows-based PCs, but suggested this is largely an image factor.
"The number-one reason Apple has grown share is because they have had the sexiest high-end notebooks in the marketplace," he said. "I think as you start to see the kind of higher end nice notebooks, sexy, high-end notebooks from Toshiba, from HP, from Dell, from others, that combination with Vista is going to put a lot of pressure back on Apple."
Source: Computergram

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