Microsoft CEO Ballmer Launches Windows 7 In New York

Publicly, Microsoft is exhibiting a decided lack of fear about the changed operating-system landscape since Windows Vista and XP made their debut. Apple and its Mac OS X has increased its market-share in the consumer space over the past three years since Vista’s debut, and Google has caused rumblings lately with its Android OS—which primarily runs on devices with smaller form-factors, such as smartphones—and the long-rumored Chrome OS that will supposedly be ported onto netbooks later in 2010.

“Apple is a fine company,” Ballmer said hours before the launch on the “Today Show,” insisting that Windows would continue to run on “nine out of 10” computers in the United States heading into the future.

Despite that, and the hoopla surrounding this launch, Microsoft has been taking care in recent weeks to downplay the possible effect of Windows 7 on the overall PC market. In comments delivered during a news conference in Munich, Germany at the beginning of October, Ballmer said that a surge of PC sales accompanying the operating system launch “will probably not be huge.” He also hinted that the overall tech sector would need some time to recover to its former sales levels in the aftermath of an economic recession.

That recession had not been kind to Microsoft, forcing it to report a 17 percent decline in year-over-year revenue for the fourth quarter of fiscal 2009. Earnings came in at $13.10 billion, around $1 billion below Wall Street Estimates. Microsoft will announce its next quarter’s earnings on Oct. 23, but the release of Windows 7 may have come too late to mitigate what may also be a down report.

Much of the success or failure of Windows 7 will rest on the operating system’s ability to appeal to businesses. Leaving nothing to chance, Microsoft has taken steps to at least put their baby in front of as many eyeballs as possible even taking the step of offering Windows 7 Enterprise in a free 90-day trial edition.

Some 80 percent of all commercial PCs continue to use Windows XP, according to a report by research firm Forrester. Although a number of businesses may be disinclined to upgrade to Windows 7 immediately, due to the pressures of stripped IT budgets, analysts suggest that the prospect of support ending for Windows XP Service Packs 2 and 3 in April 2014 will drive many enterprises and SMBs (small- to medium-sized businesses) that use Microsoft to upgrade to Windows 7.

Research firm Gartner, in an Oct. 13 presentation, suggested that the ending of XP support by independent software vendors (ISVs) will start around the end of 2011, creating an “XP danger zone” by the end of 2012.

Substantial changes in driver and security models, as well as other APIs, between Windows XP and Windows 7 have made the upgrading between those operating systems a more disruptive process than the jump between Windows XP and Windows Vista. Microsoft introduced a Windows 7 Upgrade Advisor in an attempt to help users make the transition on older machines.

Windows XP Mode, a feature of certain editions of Windows 7 that runs XP-based applications in a virtual environment, has been introduced to help businesses running older programs transition more smoothly onto the new platform. Users will be able to access applications running in Windows XP Mode through the Windows 7 task bar by right-clicking.

“There’s never been more hardware capable of running a new OS,” Mark Relph, senior director of the Windows Ecosystem Team, said in a media pre-briefing before the Windows 7 launch. “The compatibility side of things was so important this time around. The universe of products and systems has never been this big for us.”

Microsoft can take hope in data produced by a number of research firms over the past few weeks, suggesting that Windows 7 will drive a generalized tech refresh through 2010. Until the sales numbers come back, though, it is likely too soon to tell whether Microsoft has escaped entirely from the shadow of the recession and the ghost of Windows Vista.