Windows 7 One Year Later: Win for Microsoft

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 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.