Why Microsoft can't afford Windows 7 to fail
Will Windows 7 allow users to forget Vista?
On Thursday, Microsoft launches Windows 7, the latest version of its
operating system. Its success or failure will determine the future of the
world's biggest software company.
When talking about Microsoft, it is useful to remind yourself of the
sheer scale of its reach. Windows powers about 90% of the world's computers; by
the company's own reckoning more than one billion people use it.
Windows also powers Microsoft. During its last financial year, a $58.4bn
(£35.7bn) turnover generated an operating profit of $20.3bn (net profit:
$14.6bn). Windows accounted for well over half of that.
For years, critics have claimed that Microsoft's virtual monopoly is
about to end.
They say it will be brought down by a resurgent Apple, insurgent
open-source rival Linux or a revolution in how we use computers, when the
actual computing moves from desktop machines to the "cloud" where software runs
on remote servers.
Windows without a Vista
In reality, Microsoft has been its own worst enemy. Ruthless behaviour
towards rivals earned it the attention of regulators such as the European
Commission and the US Department of Justice.
Windows 7 is much easier to install than its predecessor
More importantly, three years ago Microsoft botched the release of Vista,
the operating system that preceded Windows 7.
Vista - a bloated, difficult to install operating system - left many
early users with suddenly unusable hardware and software. The disaster badly
undermined Microsoft's credibility with consumers and software developers.
Today, Vista is still outshone by its eight-year-old predecessor Windows
XP. One (particularly low) estimate from web metrics firm Net Applications
suggests Vista has a mere 18.6% share of the market. Others put it at just over
35%, which is still a poor figure.
Among companies, "Vista is the worst-adopted operating system", according
to Annette Jump, research director at Gartner, a technology research firm.
The president of Microsoft International, Jean-Philippe Courtois, opts
for understatement: "We don't feel great about Vista adoption."
Windows reloaded
Windows 7 is Microsoft's one and maybe only chance to redeem itself. "We
have learned a lot from what went wrong with Vista," is a mantra repeated by
every Microsoft executive.
The preparations for Windows 7 have been a remarkable step up from
the days of dealing with Vista
Alex Gruzen, Dell
For starters, Windows 7 is on time, arriving less than three years after
the launch of Vista, which was two years overdue.
Early users report it to be fast, reliable, secure and easy to use on the
move.
Most importantly, Microsoft went out of its way to avoid a repeat of its
biggest Vista mistake, when it failed to prepare its partners for the new
system.
Windows 7 loves Windows 95
"Peek" helps users find their way around a crowded taskbar
"The Windows ecosystem is the broadest in the world, and we have to take
care of that," says Mr Courtois.
Microsoft's partners have noticed the change in tack. "The preparations
for Windows 7 have been a remarkable step up from the days of dealing with
Vista," says Alex Gruzen, the man in charge of consumer products at the
computer giant Dell.
"In the past, Microsoft looked at its operating system in isolation, and
gave it to [manufacturers] to do whatever they wanted," he says. "Now they
collaborate, help to figure out which third-party vendors are slowing down the
system, help them improve their code."
We expect a tangible Windows 7 bounce [in PC sales]
Richard Huddy, AMD
Microsoft, promises Mr Courtois, has "worked very hard with Windows 7 to
achieve applications compatibility." When it rolled out the first service pack
for Vista, there were a mere 2,700 applications certified to work with the
system.
At launch, Windows 7 boasts 8,500 certified apps.
And if you want to use old software on your computer, Microsoft has built
in a "compatibility tool" that allows you to run applications that were built
for operating systems as old as Windows 95.
Windows 7 also has a smaller "footprint" than Vista. It needs less
computing power so older PCs run it quite happily. "Our PCs have gained another
two years lifetime," says Chris Page, who deployed Windows 7 on nearly 700
computers in schools run by Warwickshire County Council.
Just one five-year-old laptop refused to run the new operating system, he
reports.
The best or worst of times?
But is this the right time to launch an operating system? Parts of the
world may be out of recession, but investment remains low and consumers are
facing the prospect of rising unemployment.
The timing, however, might actually be Microsoft's biggest asset.
The new Taskbar preview is popular with users
"Technology has always been leading economies out of recession," says
George Colony, boss of tech research firm Forrester.
Despite the downturn, IT investment is growing three times faster than
most economies, reports tech industry analyst IDC. Even among consumers there
are still pockets of growth, especially small netbooks with their low-power
processors, which cannot run Vista but deliver zippy performance under Windows
7.
The launch of the new operating system will produce "a tangible Windows 7
bounce", says Richard Huddy of chipmaker AMD.
"Along with that, we're also seeing evidence on a global scale that the
recession is starting to lessen."
"The fact that Win 7 is more efficient than Windows Vista means that it's
viable for lower-cost PCs, so I think we can safely say we're increasingly
optimistic."
The bottom line
At Dell, Alex Gruzen sounds bullish too. Many companies have kept old
computers running for at least a year longer than they would normally do. Now
"there is some optimism that the refresh cycle will begin over the next year;
Windows 7 certainly helps, it provides a good catalyst for it."
April 2014: the deadline for Windows XP
A changed digital world is also driving change. Consumers and corporate
computer users are becoming more mobile and Windows XP simply was not built for
that.
Forcing the issue, Microsoft has said it will stop supporting Windows XP
in April 2014. And even if there is an extension, by then most makers of
third-party software for XP will have phased out their support, says Steve
Kleynhans, vice-president of research at Gartner, "which will increase the
pressure to upgrade" to Windows 7.
Also, organisations testing Windows 7, such as the UK accounting firm
Baker Tilly and the City of Miami, report sharply lower support and energy
costs, and higher productivity, according to Stella Chernyak, the product
manager for Windows 7 Enterprise.
Gartner's Steve Kleiynhans also counsels companies against the
traditional wait for "Service Pack 1", because these days Microsoft rolls out
upgrades and updates continuously. The service pack will be a mere catch-up for
those who have failed to install them.
The bottom line for Mr Courtois: "We expect business to adopt Windows 7
much faster" than previous operating systems.
Watching rivals
Microsoft has tidied up Windows Explorer
At Gartner, Annette Jump is more cautious: "We don't expect that Windows
7 will drive PC shipments," although companies "really will have to" upgrade to
Windows 7, because otherwise "the support costs for older PCs will be piling
up".
Microsoft's timing has been helped by the fact that one of its arch
rivals, Google, won't launch its lightweight operating system Chrome OS before
the middle of next year, which will be plenty of time to establish Windows 7
firmly in the netbook market.
Also useful is the misstep of its other nemesis, Apple, which
uncharacteristically botched its new operating system Snow Leopard, not
anywhere near as badly as Vista, but enough to give Microsoft a clear run for
its Windows 7 launch.
Windows' last hurrah?
"I really have to go back to Windows 95 to remember people being so
excited about a new operating system," says Mr Courtois, a 25-year veteran of
Microsoft.
"Windows 7 is everything that Vista promised to be and more," enthuses
AMD's Richard Huddy. Dell's Alex Gruzen calls the software "outstanding."
This may be hyperbole. Gartner analyst Annette Jump, for one, calls
Windows 7 "a polishing release of Windows Vista".
But most reviews have been positive, even enthusiastic. "The fact it's an
operating system I see nobody complaining about [suggests] you have something
that's really good and solid," argues Mr Huddy.
That alone will not banish the fundamental threats to Microsoft's
business model, though.
Over the next few years there will be "a big shift to [operating system]
neutral applications like browser-based apps, Java, Silverlight, Flash, .Net",
says Mr Kleynhans at Gartner.
"That will limit the dominance, the factors that drive people to have
Windows."
Should Microsoft rest on its Windows 7 laurels, it might end up being its
most, but also its last, successful operating system.
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