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    No Enterprise Thaw for Vista

    Written by

    Joe Wilcox
    Published August 14, 2008
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      If Windows Vista were a person, it would have an inferiority complex. Not since Windows ME has a Microsoft operating system seen such cool business reception. Indeed, research shows that many enterprises hope to leapfrog Vista altogether.

      Two recent events should have opened the gates holding back enterprise adoption of Windows Vista: the release of Service Pack 1-typically the point at which businesses begin to deploy a new Windows operating system-and Windows XP’s exodus from the OEM channel.

      However, in a recent survey conducted by Ziff Davis Enterprise Research for eWEEK, nearly three-quarters of respondents indicated that SP1 would have no effect on their Windows adoption plans.

      The survey of about 400 IT decision makers-conducted in conjunction with Peerstone Research, on behalf of Sanford Bernstein-was done in May 2008, one year after a similar survey of IT managers. For this report, the results of the two surveys were analyzed to determine trends in Vista adoption over time.

      Respondents to the May 2008 survey expect to have as many as 9 percent of their PCs running Vista by year’s end-25 months after the release of the operating system on PCs. That percentage rises to only 28 percent in 2010, according to the survey.

      Similarly, nearly 50 percent of respondents to the 2008 survey said Windows XP’s end of mainstream OEM distribution would have no effect on Vista adoption plans. That said, 28 percent indicated that XP’s end would accelerate their adoption plans.

      The latter number fits nicely with other data from the recent eWEEK survey. IT managers surveyed said 27 percent of their PCs purchased in the next year would have Windows Vista.

      Microsoft largely pulled Windows XP from the OEM channel on June 30. An XP downgrade license can still be obtained on PCs with Windows Vista Business or Windows Vista Ultimate.

      But the percentage of Windows XP adoption increased three times more than the percentage increase of PCs running Vista, according to data obtained from the two eWEEK surveys. (The increase in Vista adoption likely would have been higher had Microsoft not released Windows XP Service Pack 3 two months after Windows Vista SP1.)

      This indicates that the majority of surveyed businesses running older Windows versions migrated to XP instead of Vista. Microsoft had counted on businesses with Windows 2000 and older versions going to Vista, according to company executives and industry analysts. The newest Windows saw some conversion, but XP saw much more. The percentage of business PCs running Windows XP increased to 83 percent from 74 percent during the time period covered by the eWEEK surveys conducted over 12 months. Vista adoption increased to 5 percent from 2 percent during the same time period.

      A July Forrester Research report corroborates the more recent eWEEK study, within the margin error for both surveys. Forrester surveyed about 50,000 users at more than 2,000 organizations. Vista enterprise adoption was a mere 8.8 percent in June, up from 6.2 percent in January. By comparison, Windows XP had 87.1 percent adoption.

      Other recent studies or reports also indicate that enterprises aren’t rushing to deploy Vista.

      For example, in April, Gartner made a presentation titled, “Windows Is Collapsing: How What Comes Next Will Improve.” And in July, KACE survey findings, conducted by King Research, showed that the number of enterprises with no Vista deployment plans had increased since 2007 (60 percent compared with 53 percent).

      Microsoft Tells a Different Story

      Microsoft’s numbers

      Microsoft tells a much different story about Vista adoption. Bill Veghte, senior vice president for Microsoft’s Online Services & Windows Business Group, spoke about the state of Windows Vista during the company’s annual Financial Analyst Meeting in late July.

      “Are people using it?” Veghte asked. “On the consumer side, you’ve seen a very, very high mix shift to PCs running Windows Vista. On the enterprise side, you’ve seen the enterprises [adopting Vista] particularly post-Service Pack 1, because we saw a very strong acceleration post-Service Pack 1. You saw those enterprises accelerating that deployment.” But Veghte offered no hard data about Vista adoption, other than to indicate shipment of 40 million Vista licenses during the second quarter of 2008.

      That number isn’t as big as it looks. According to Gartner, computer manufacturers shipped 72 million PCs worldwide during the second quarter. The number is closer to 70 million when removing x86 servers, which Garter includes in PC shipment data.

      However, the OEM channel accounts for only about 80 percent of Vista sales, which makes the number of Vista licenses shipping on new PCs 32 million. OEMs shipped approximately 70 million PCs in the second calendar quarter, but only 32 million Vista licenses were installed on the hardware.

      By eWEEK’s estimates, then, 46 percent of computers shipped with Windows Vista during the second quarter. Since Vista’s Jan. 30, 2007, launch through April 30, 2008, the operating system shipped on 39 percent of PCs, eWEEK estimates, up from 37 percent three months earlier.

      Veghte did offer one proof point about Vista, based on survey work done for Microsoft by NPD.

      Among the consumers surveyed, 89 percent said they were satisfied or very satisfied, and 83 percent said they would recommend the product. The absence of compelling enterprise adoption data is perhaps commentary enough about Microsoft’s failure to widely woo IT organizations to Windows Vista.

      The Microsoft executive did speak about Microsoft efforts to resolve well-known application compatibility problems. “We built a list of about 250 enterprise applications that were holding deployment for over 5 million seats, and every single one of those enterprise applications we have a remediation or a solution for today,” Veghte said.

      What Happened to Enterprise Demand?

      Negative perceptions

      Microsoft released Windows XP about 18 months after Windows 2000, which dragged enterprise adoption of the newer operating system. By contrast, Vista shipped about six years after Windows XP.

      Where is the pent-up demand? If demand for Vista is only about the same as demand for XP one year after their respective releases, then Vista adoption isn’t doing well. And, for further context, PC volumes are much bigger this year than they were in 2003, a year after XP was released.

      Microsoft has a big problem, then: Windows XP is successfully competing with Vista.

      But there are other factors that account for the enterprise’s cool reception of Vista.

      As previously reported by eWEEK, application compatibility problems and Vista’s hefty hardware requirements are among the operating system’s major shortcomings. According to the May 2008 eWEEK survey, nearly three-quarters of IT managers said they would be somewhat less likely or much less likely to migrate to Windows Vista because of application compatibility problems; nearly as many showed similar resistance about hardware requirements.

      Even given all that, the increase in negative Vista perception between the 2007 and 2008 eWEEK surveys is startling.

      In both survey waves, 49 percent of IT managers said they were strongly against migrating to the operating system. Between waves, many other people in business organizations switched from answering neutral or slightly positive to being strongly against Vista deployments. In the second quarter of 2007, 54 percent of corporate managers said they were neutral about Vista migrations, and only 11 percent said they were strongly against them. In the second quarter of 2008, 51 percent of business managers said they were against Vista migrations-30 percent of them answering strongly against.

      In an April report, Forrester analyst Benjamin Gray identified negative Vista problems as a major deterrent to enterprise adoption: “Desktop operations professionals tell Forrester that they see the value in standardizing on Windows Vista, but many are having a hard time convincing their CIOs that the move isn’t a risky bet, given the mixed reaction it’s received in the press and the speculation surrounding what to expect after Windows Vista.”

      In the eWEEK survey conducted in 2007, 22 percent of respondents strongly opposed Vista migration. In the follow-up survey a year later, 55 percent were strongly against deploying Vista. User resistance jumped from 21 percent to 53 percent during that time period, according to the two eWEEK surveys.

      And, at this point, it’s not only older Windows versions that Vista is competing with-it’s also competing with Windows versions of the future.

      Many organizations have chosen to wait for Vista’s successor, Windows 7, which could ship as early as the end of 2009.

      “Forrester has spoken with dozens of companies that are internally debating the possibility of skipping Windows Vista entirely and going straight to the next release, known as Windows 7,” Gray said.

      Marketing blitz

      Microsoft is treating negative perceptions as Vista’s major problem to fix. The company is in the early stages of launching a major marketing initiative for Vista, at a cost of $300 million.

      Microsoft hinted at what would come with the launch of the “Mojave Experiment” Web site. Mojave’s “See for yourself. Decide for yourself.” Tag line frames the theme of other Vista marketing material to come.

      The Mojave Experiment starts with a simple hypothesis: If people could see Windows Vista firsthand, they would like it. The company filmed a focus group of people with negative attitudes toward Windows Vista. Participants were then shown a “new” Windows version, Mojave. But they were really seeing Windows Vista. Using carefully edited snippets, Microsoft shows their reactions of shock and wow.

      The Mojave Experiment participants saw Vista in a controlled environment on machines set up by Microsoft and demoed for about 10 minutes. The unanswered question: What would these users’ reactions be after 10 hours or 10 weeks of using Vista?

      Joe Wilcox is the editor of Microsoft Watch. He can be reached at jwilcox@eweek.com.

      Joe Wilcox
      Joe Wilcox

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