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The long awaited successor to Windows XP and Windows Vista, will ship several months earlier than planned. Expectations are high industry-wide.

Windows 7 is crucial to Microsoft’s over-arching software business and technology strategy for the next two years. Although it is an incremental upgrade and not a major overhaul of the underlying Vista kernel, Windows 7 represents a crucial upgrade for both consumer and corporate customers.

Practically speaking, Windows 7 must do what Vista didn’t: deliver near seamless, plug and play integration and interoperability with the overwhelming majority of Microsoft and third party applications, device drivers, utilities and hardware peripherals. As a standalone operating system (OS) Vista was fine. Unfortunately, there’s no such thing as a standalone OS. The lack of backwards compatibility between Vista and third party software and even incompatibilities in the file formats between Vista and Office 2007 and other Microsoft products was a nightmare for corporations and consumers alike.

As a result, there is no margin for error. Windows 7 must fulfill users’ expectations, business and technology needs from the first day it ships. Microsoft will not get a second chance to make a good first impression. Failure to do so could send customers running to rival desktop platforms like Apple’s Mac OS X 10.x and Linux distributions, or even online options such as those being pitched by Google. . And if Windows 7 does not deliver the features, integration, interoperability and reliability Microsoft is promising, it may well create a domino effect that adversely impacts the upcoming releases of related solutions like Exchange Server and the Office platform.

Integration and interoperability are the most important criteria, besting even cost, when it comes to choosing a new technology. The results of ITIC’s May 2009 Application Availability survey of 300 businesses worldwide found that 60% of business said integration and interoperability with existing and legacy applications tops the list of “must have” items in new software application and operating system purchases. Cost came in a close second with 56% of the respondents followed by ease of use and installation (55%).

The stakes for Windows 7 are also high because of intensified competition. Rumors abound that Microsoft pushed up the release date by at least three months so that Windows 7 hits the streets in advance of the low cost netbook version of Google’s Android. Microsoft also faces increased competition in its decades-old rival Apple. During the past two years Apple’s Mac OS X 10.x running on Apple’s Intel-based proprietary hardware has been making a comeback in corporate enterprises. Apple products do not represent a significant threat to Microsoft’s corporate desktop dominance, but they can nibble at the fringes, potentially dilute momentum [for Windows 7] and take some market share. In this ongoing global economic downturn, no vendor wants to concede any revenue or even a percentage point of market share.

Microsoft of course is acutely aware of these issues. In recent months, company CEO Steve Ballmer and Senior Vice President Bill Veghte have publicly stated that users were stymied by the incompatibility issues they encountered with Vista. They intend to avoid those problems with Windows 7.

Fortuitously, for Microsoft, there are many factors in Windows 7’s favor. They include:

  • Pent-up Demand. To date, only 10% of the 700 survey respondents in ITIC’s 2009 Global IT and Technology Trends Global Deployment Survey have deployed Vista as their company’s primary desktop operating system. The results indicated that Windows XP remains the primary desktop OS for 89% of the respondents. Nearly half—45%—of the survey respondents indicated they would skip Vista and migrate from XP to Windows 7. The main reasons for this were cost constraints associated with the bearish economy, and reluctance to undertake a complex OS upgrade with manpower constraints.

    The prevailing sentiment among businesses is that they can afford to wait because Windows XP adequate met their business and technology needs over the last two years. ITIC believes this bodes well for Windows 7 deployments in the short and intermediate term. If 20% of the installed base of legacy Windows XP users migrate or indicate their intention to upgrade to Windows 7 within the first three or four months of shipment, Microsoft will be well-positioned. There is a reasonable likelihood of this, providing Windows 7 delivers the goods. And the advance word from customers interviewed by ITIC is generally positive.

  • New feature set. Windows 7 will have six different versions, but to minimize the confusion that accompanied the Vista launch, only the Home Premium and Professional editions will be widely sold in retail outlets. Specific versions that are designed for enterprise use or developing nations will be aggressively marketed to those specific accounts and geographic regions, thus taking the guesswork out of purchasing. Most importantly: Microsoft says that every one of the versions will include all of the capabilities and features of the edition below it which will help to minimize upgrade woes. Corporations and consumers that want to move to a more feature rich version of Windows 7 can use Windows Anytime Upgrade to purchase the upgrade online and unlock the features of those editions from their desktops.

    ITIC interviewed several dozen Windows 7 beta users over the last several months and an overwhelming 9 out of 10 respondents expressed their satisfaction with improvements in many Windows 7’s core capabilities when compared to both Windows XP and Vista. This includes faster boot sequence, better reliability, improved security, a much faster and more comprehensive search engine, and more flexible configuration options. Additionally, Microsoft bolstered the inherent security of Windows 7 with DirectAccess and BitLocker To Go features. The DirectAccess capability is designed to provide remote, traveling and telecommuting workers with the same secure connectivity as though they were local by establishing a VPN “tunnel” to their corporate networks. BitLocker To Go extends the data encryption features introduced in Vista to include removable storage devices such as USB thumb drives support in Windows 7. Users can employ a password or a smart card with a digital certificate to unlock and access their data. And the devices can be used on any other Windows 7-based machine with the correct password. Users can also read, but not modify data on older Windows XP and Vista systems.

  • Economical and feature rich Licensing contracts. Finally, the terms and conditions of Windows 7 licensing contracts promise to make upgrades easier on corporate IT budgets. In February, Microsoft said it would provide a license that will allow customers to directly upgrade from Windows XP to Windows 7. There is a caveat, though: users will have to wipe their hard drives and perform a clean install – so technically, it’s not an upgrade. Microsoft has not yet released pricing details for Windows 7 but ITIC believes the upgrade license will most likely cost 20% to 40% less than a new license.

    Additionally, corporations that purchased Microsoft’s Software Assurance Maintenance and upgrade plan as a standalone product or received it as part of their Enterprise Agreement (EA) licenses, are entitled to free upgrades to Windows 7 since it is an incremental release. Additionally, in order to make life easier for users (and to engender goodwill) Microsoft is letting the Release Candidate (RC) free trial license for Windows 7 last a full year until June 2010! And users looking for a discounted version of Windows 7 to run on low cost, minis or netbooks take note: Microsoft and Intel have agreed that in order for a device to be considered a netbook, the screen must not exceed 10.2” Prior to this, Microsoft allowed customers to get the Windows XP or Vista discount for or devices as large as a 12.1” screen.

In summary, all indications are that Microsoft has learned from its Vista mistakes. As a result, businesses and consumers stand ready to reap significant benefits in compatibility, features, pricing and licensing with Windows 7.

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2 Comments:
  • steven sommer said:

    I think Ms. Didio’s article on Microsoft’s Windows, version 7, is right on, with one big caveat.

    And before I state it, I want to make one thing abundantly clear for the record. I am a Microsoftee, I bleed Microsoft blue.

    However, as I mentioned above, this roll out can only be a true measured success if Microsoft gets involved fully with each vertical market and understands what the measures of success would be for each one.

    For example, in the area of compatibility, taking the Legal vertical as a start, does it run well with certain litigation applications that are endemic to that specific industry’s desktop? Too often, these vendors have no idea how to handle the change in the desktop and are clueless how to move their applications to the upgraded OS. They then lag behind others and the end user suffers from a severe case, if you can excuse the pun, “behindness”. They say the6y are “gold” partners and that they will be on top of the change, but, they never are.

    In the case above, as an advisory, Microsoft should start surveying the large law firms now and make sure that the major application vendors are on track. This would help with both the budgeting process and the planning process, and, help ease the transition.

    In respect to the above, if Microsoft can’t do it alone, and, I doubt that they can, or even if they should, they should hire partners within that specific indusry to get garner that information for them.

    I would like to know what Ms. Didio thinks about this.

    Laura?

    • Hi, Steve:

      Thanks for stopping ITIC’s website; we appreciate your taking the time to provide your feedback and insight.

      I wholeheartedly concur that Microsoft mustget involved with each vertical market and actively engage its’ customers, potential customers and the development community to promote the constructions of applications for specific markets. Legal, healthcare, insurance, government, defense and utilities are all key areas for Microsoft. This is not the late 1980s or 1990s when proprietary operating systems were the order of the day. In the 21st Century the most important criteria for a a successful operating system are: integration and interoperability with existing applications and backwards compatibility with legacy apps; the portability and remote access capabilities of the application and the ability of the application and the concommitant OS to be untethered from a PC to run on myriad devices. Microsoft Windows remains the dominant player in the desktop OS arena with approximately 80% to 85% market share. As the dominant presence, Microsoft has an obligation and a responsibility — particularly now during the economic slump — to reach out to its end user constituency in various verticals and take a leadership role. The life’s blood of any operating system platform can be measured by whether or not it has a robust, thriving third party application ISV community. History has shown us, that any software vendor — Microsoft included — who does not have or who loses the support of the application developer community, will almost certainly wither on the vine. In the late 1980s, for example Banyan VINES established a niche with the US Marine Corps. while IBM’s OS/2 Warp became popular with the banking and financial company. Unfortunately, neither company received widespread support for their platforms outside of their respective niches in one or two verticals. However, the Marine Corps held on to VINES and many banks remained on OS/2 Warp long after Banyan and IBM had stopped actively developing for those platforms. By contrast, Microsoft Windows became a popular choice across many verticals.

      You are absolutely right Steve, Microsoft must proactively poll and assist the application vendors and take the pulse of enterprises in various vertical markets and they need to strengthen their existing partnerships and create new ones.

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