Microsoft gambled big that Windows 7 would help revive the company's revenue and erase memories of Vista. One year later, sales suggest it won.
Microsoft was in a bad state last summer, just as its teams were putting the
finishing touches on Windows 7. The global recession had battered the company's
revenues. Windows Vista, the company's previous operating system, seemed
stigmatized in the wake of bad reviews and user complaints. If Windows 7 died
in the marketplace, chatter would start that Microsoft's best days were far
"The truth is that the operating system is irrelevant now," Salesforce.com
Marc Benioff said in a statement released before the Windows 7 launch. "It's
about the cloud-cloud applications for consumers and businesses, and cloud
platforms like Force.com, Amazon Web Services, and Google App Engine."
Nonetheless, Microsoft and its manufacturing partners had some hopes. A
report from research firm Forrester found that 80 percent of all commercial PCs
were running Windows XP. If those companies were offered a shiny new operating
system, they might be compelled to upgrade both their hardware and software-if
the recession had left funds in their IT budgets.
Other companies had used Microsoft's weakened position to make their own
inroads among consumers and businesses. Apple and its Mac OS X managed to
increase its market share in the three years since Vista's debut, and rumors
abounded that Google was planning to port either Android or its Chrome OS-or
Microsoft seemed to recognize the stakes. As the months ticked down to
Windows 7's October launch, the
company began a process of winnowing down its products and business lines
Flailing initiatives, including YouTube competitor SoapBox and Popfly, found
their necks on the chopping block. While Microsoft's crashing revenues likely
helped propel many of these executions, analysts generally seemed to agree that
the decks were being cleared for a concerted push behind Windows 7 and Office
"I think that highly strategically focused companies can use a downturn
like this to reconsider what they're doing, and decide what's working and not
working," Charles King, an analyst with Pund-IT Research, said during an
August 2009 interview with eWEEK. "At the end of the day, [Microsoft CEO]
Steve Ballmer and other executives have been looking at strategic groups and
asking, 'How well is this working?'"
Microsoft launched the Windows 7 Release Candidate in May 2009. That
followed the widely released Windows 7 beta, with Microsoft using testers'
input to further refine the operating system. Soon after the Release Candidate
hit users' systems, Microsoft began announcing a series of discounts and deals
for the final version.
If Windows 7 had failed, in other words, it wouldn't have gone down without
Microsoft putting up a substantial fight.