Wall Street will be

By Kevin Fogarty  |  Posted 2005-07-22 Print this article Print

watching Vista sales"> Even the improved error-reporting function in Vista raises concerns from users worried (as many did in past Windows releases) that Microsoft will be able to gather from Vista machines information they consider private. Microsoft has said the error-reporting feature known as Crimson is based on a health model that maps correct and incorrect functions for every service, defines all the functional states of each, and the incidents that mark the transition between a healthy function and one that has stopped working properly.
"This is a good thing," according to David Robert, a systems manager for a global consulting and engineering company in Cambridge, Mass. "Better logs will also be great, but I will have to see them first before I believe them. If you could determine from the log what the problem is without having to go to a Microsoft knowledge base or to the Web or to call up Microsoft Professional Support Services, then that is more than half the battle right there."
Click here to read David Courseys thoughts about the name Windows Vista. Microsofts financials seem strong, but Wall Street appears to view it as a company that is maturing beyond the point that huge gains in sales can come from year to year. For example, the company predicted to analysts that its revenue in the first quarter of 2006, which ends in December would be between $9.7 billion and $9.8 billion. Analyst consensus estimates predicted revenue of $9.9 billion The numbers Microsoft predicted would equal about a 6 percent increase compared to the same period a year ago. By comparison, the fourth fiscal quarter, which Microsoft reported this week included net income of $2.69 billion, is 9 percent greater than a year ago. Microsofts stock price dropped 2.5 percent Friday morning, immediately after the announcement. "Big revenues and good quarters are not enough; Microsoft has to be consistent," Eunice said. "It needs a predictable, constant upgrade stream to keep their hefty revenue growth objectives—Wall Streets expectations—on track." Making that happen depends heavily on whether Microsoft can make the case to corporate customers that Windows Vista will be worth a chain-reaction of upgrades. Upgrading to the new OS would force many to retool their custom applications, possibly require upgrades in commercial software from Microsoft and other companies, even require hardware upgrades for companies whose existing computers lack the power to run features of the new OS and apps. "Its a real good question [whether the upgrades would be justified]," Eunice said. "Especially given that Windows 2003 and Exchange 2003 and such are pretty darn good and solid. Whether companies will be ready for yet another major upgrade cycle is an open question—but I am skeptical."


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