Friday, November 23, 2007

War in Microsoft

Analysts say that Microsoft Windows Vista's biggest problem is not competition from other companies like Apple. It's more like Family Feud, actually.


Vista's Biggest Problem
Microsoft's biggest worry shouldn't be rival operating systems from Apple Inc. or Red Hat, but competition from it's own Windows XP, analysts said last week.

The big story isn't that 32% of the companies we surveyed said that they would start Vista deployments by the end of next year," said Benjamin Gray, an analyst at Forrester Research Inc. "It's that companies have been hugely successful in standardizing on Windows XP."

About 85% of US and European companies with more than 1,000 employees use Windows XP, up from 65% a year before. Although Windows XP is already six years old, Gray warned not to bet against it. "There are plenty of companies looking forward to XP SP3," he said. That next hot-fix and patch rollup is to ship sometime in the first quarter of 2008, Microsoft has said, and it will reportedly be XP's last service pack.

Vista's biggest competition isn't Apple or Novell or Red Hat; it's Microsoft itself, it's XP," Gray said. A lot of companies use Windows XP that Microsoft may feel obligated to extend the product mainstream support past its April 2009 expiration date. "I wouldn't be surprised," Gray said, "although it might require some additional pressure on the company by its largest customers."

Still, XP will eventually get the boot in favor of Vista. Vista isn't a matter of if, but of when and how," he noted.

Businesses will start upgrading their operating system to Vista by the end of 2008, while some will do this in 2009, and 2010. Still, some companies are skittish about upgrading, according to Forrester's data.

He attributed the lowered expectations to a lack of detailed information about Vista in 2006; too-high prices for PCs with 2GB of memory, which is essentially the minimum needed for Vista, according to company managers; and a larger-than-expected number of incompatible applications.

"Application incompatibility is a big, big headache," Gray said, citing reports from companies preparing for a migration to Vista. Those firms said applications incompatible with Vista made up between 10% and 40% of their software portfolios. "That's causing a lot of XP shops to take a wait-and-see approach to Vista."

But Gray said he was convinced Microsoft will win out in the end, if only because it has virtually no competitor worth the name in the enterprise market. "Linux and Mac have 1% or 2%, and in some cases, such as Europe and the largest corporations, they don't even register," he said. "Microsoft owns this space, and I don't see that changing."

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