Windows loyalists force Microsoft to keep XP in business

The decision to keep the Microsoft XP operating system available till mid-2008 has fuelled suggestions that the expensively developed, but critically challenged, Vista replacement is facing a serious acceptance problem. The company says it's just responding to a trend in which more businesses wait for a hardware change before upgrading software, and that 60 million license sales to date is still respectable. But extending XP is also an insurance against an end-of-life defection from closed Vista to open source.

Microsoft has said it will continue to supply its XP operating system to computer makers and retailers until June 30, 2008, abandoning a previous target of withdrawing it in January. This appears to be a reaction to unexpectedly slow take-up of the replacement system Vista, with businesses waiting until they buy replacement PCs – on which Vista is likely to be installed as standard – rather than upgrading their existing desktop and laptop fleets.

Quantum leap vs. backward step

Business users' reluctance to switch to Vista appears motivated by a combination of can't upgrade/won't upgrade. Some have examined the system requirements for Vista and realized that it won't sit easily on most of their machines, so that the hardware will have to be replaced before the new software can run. Others, on the basis of their own or reported experience, fear that Vista will cause work disruption and extra training needs because of its substantial design differences; or that it will be unstable and prone to crashes until the first corrective Service Pack is made available.

Press comment on Vista has tended to be more critical than for previous Microsoft launches, with frequent questioning of whether the new system's added features justify its extra size and cost. Even its enhanced ability to run several memory-intensive programs simultaneously is dismissed by some business users, who see it as an attempt to make PCs more marketable to the online visual artists currently attracted to Macs, not delivering much advantage for most office applications.

Not seeing the good for the XPs

For satisfied early adopters, the outcry is more a knee-jerk reaction from users whose inclination to kick Microsoft has grown as inexorably as its desktop market share. They recall a similar outcry, from enthusiasts of the much-missed Windows 98, on the first appearance in 2001 of XP – the system to which many Vista-resisters now desperately cling.

While 30 percent of businesses polled by InformationWeek earlier this year said they had no plans to introduce Vista, that meant a healthy majority still did, and the number is likely to have risen as more hardware comes up for replacement. The 60 million site licenses sold so far mean Vista has sold faster than any previous Windows version, according to the system's product manager Mike Nash.

If it ain't broke...

But for Microsoft, last week's announcement was admission to a discomfort already familiar to Sony after its launch of PlayStation 3, and mobile phone groups after their costly launch into third generation (3G) provision. PS3 was launched to forestall a jump in market share for new launches by Microsoft Xbox and Nintendo. But by pricing it high, Sony ensured that these rivals heavily outsold it – and that its third big competitor would be ongoing, software-rich PS2. Similarly, 3G telephony threatened to be kept out of the market by the same companies' 2G offerings – until they priced the new service close to the old, forcing a massive write-off of the sums they'd spent on the 3G license.

In both cases, the old product stayed competitive partly because its successor was launched ahead of time, before its reliability proven or its market positioning fully determined. Microsoft's critics say the same of Vista, with even some of its enthusiasts wryly remarking that it will be good when Microsoft finishes designing it.

An open invitation to Linux?

In the case of games consoles and mobile phones, premature launch was the consequence of intense market competition, sowing fear that further delay would mean a rival being first with the ‘next big thing'. But Microsoft, with it systems pre-installed on PCs that comprise around 95% of computer sales, was hardly in a comparably competitive situation. Now, however, it may have been forced to extend XP's life in part because of a fear that PC buyers offered only Vista will look instead at non-MS alternatives, like Linux or the Mac.

Vista's arrival may have been timed to pre-empt new versions of open-system rival Linux; but if the timetable requires any more modification, the main effect of its launch will have been to trumpet the power of Linux, and force loyal XP users to cover their ears.

Reprinted from our sister site, FinanceWeek

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