Windows 7 One Year Later: Win for Microsoft

By Nicholas Kolakowski  |  Posted 2010-10-21

Windows 7 One Year Later: Win for Microsoft

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 behind.

"The truth is that the operating system is irrelevant now," 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, 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 both-onto mininotebooks.

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 2010. 

"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.  

The Design


The Design

Microsoft's engineers worked to make Windows 7 less of a processor hog, with programming tweaks such as a memory-management system that devoted resources only to open windows. They also included Windows XP Mode for Windows 7 Professional and Ultimate editions, allowing "last mile" compatibility for any XP applications incapable of otherwise running on the new operating system.

Some new features seemed tailor-made for IT pros. These included OpenSearch-based Federated Search, for exploring local and network drives in addition to intranet storage. In place of Vista's constant security prompts-which drove many a user cheerfully insane-Windows 7 offered User Account Control Settings that could be adjusted for Never Notify, Always Notify and two in-between options.  

On the security side, Windows 7 included AppLocker, which could be used for locking down certain applications on an administrator level. An improved BitLocker gave users more control over encrypting their hard drives, and BitLocker to Go did something similar for external hard drives and USB keys.

Windows 7 also included some shiny user-interface elements, including Windows Taskbar-which reduced programs to thumbnail previews, with easy access to shortened menus-and a redesigned Start button.

And then there were some supremely funky wallpaper choices.

Like many major corporations, Microsoft's attempts to be hip mostly crash and burn with extreme prejudice. But some executive or designer managed nonetheless to include some default wallpapers in Windows 7 that looked like a still from an anime movie drawn by Salvador Dali.

The Release

Microsoft decided to host its primary launch event in New York City, headlined by Steve Ballmer. It seemed a logical choice, given the city's history of hosting the company's flagship product launches-including Office 2007 and Windows Vista.

Despite the marketing campaign kicking into high gear, various Microsoft executives seemed determined to downplay expectations for Windows 7 ahead of the release. In a news conference in Munich, Germany, at the beginning of October 2009, the normally enthusiastic Ballmer said that the surge of PC sales accompanying the Windows 7 launch would probably "not be huge."

Nonetheless, taking absolutely zero chances, Microsoft pushed Windows 7 through every available channel. Manufacturers pushed it preinstalled on all variety of desktops and notebooks. Stores filled their shelves. Netbook users even could use Microsoft's revamped online store to download Windows 7 for Netbooks onto a bootable USB, or burn it onto a DVD-until the company yanked it, likely due to controversy.

"When Bill Gates and Paul Allen started Microsoft, they talked about a computer on every desk," Ballmer told the audience gathered for the Oct. 22 launch event, adding, "Today we have a computer for every room" and "every facet" of people's lives. His company hoped most of those computers would soon be running Windows 7.

The Result


The Result

Windows 7 sold-doubtlessly helped by offers such as the Windows 7 Family Pack, which dangled the prospect of three upgrade licenses to Windows 7 Home Premium for $149.99. (That offer would be discontinued in December 2009, only to be revived again in September.)

In any case, while consumers snatched up the operating system in substantial quantities, businesses at first seemed more reluctant to upgrade. Microsoft tried to tempt businesses with other deals, including the Windows 7 Enterprise Trial program, but corporations seemed reluctant to open their wallets in the wake of the global recession.

"There will be an enterprise refresh cycle," Microsoft Chief Financial Officer Peter Klein told a Morgan Stanley investor conference in March. "It's not precisely certain when that will happen or how fast that will happen, but we expect it to happen this calendar year and go into next calendar year, and that will be a really good catalyst for growth in our PC business."

Despite businesses' fitful spending, the pent-up need for users to refresh aging PCs-and for many, eliminate Vista or XPs from their PCs-led to strong sales for Windows 7. According to analytics firm Net Applications, Windows 7 currently occupies some 17.10 percent of the operating-system market, behind Windows XP at 60.03 percent and ahead of Windows Vista at 13.35 percent.

Microsoft claims more than 240 million Windows 7 licenses have sold to date. Those sales seem good enough to solidify the company's grip on the operating-system market, even as it faces a substantial challenge-from the underdog position-of penetrating the smartphone operating-system market with its new Windows Phone 7.

Rumors are already swirling about possible features in Windows 8.


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