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Microsoft's Windows Vista Spin Merits Second Look

Vista uptake is unquestionably on the rise, but a variety of factors need to be considered with looking at the numbers, says Gartner.

A recent Gartner report shows that businesses are installing Windows Vista at about the same or even a slightly quicker pace than they did with Windows XP. Microsoft is touting those figures as positive spin on Vista uptake. But a deeper look into the numbers shows that the two operating systems aren't exactly competing on a level playing field. XP had Windows 2000 upgrades to contend with, and Vista has no similar competition.

The numbers in Gartner's "Forecast: PC Market by Operating System, Worldwide, April 2008 Update" do indeed show Windows XP's professional installed base in 2002 and Windows Vista's professional installed base in 2007, one year after their respective releases, both at 4.7%, combining SKUs and averaging the numbers among quarterly numbers. The research shows Windows XP installed base in 2003 at 16.9%, as compared to Windows Vista projections of a 21.3% installed base in 2008. But that's only half the story.

"If you look strictly at the installed base, Microsoft's right," Gartner research director George Shiffler said in an interview. "But one could argue that that's not necessarily a good measure, and that it belies other things going on."

Indeed, Windows XP had to compete with Windows 2000 Professional upgrades during its early years, whereas Vista doesn't have similar obstacles. Six years had passed since Windows XP's release when Vista was released.

A look at the quarterly numbers shows what is going on. From the fourth quarter of 2001, early in which Windows XP Professional was released, until the fourth quarter of 2002, the operating system's installed base increased from 0.3% to 7.4%. In the same period, Windows 2000 Professional increased from a 27.6% installed base to about a 40% installed base. Companies were pumping through the OS upgrade cycle, and XP was competing with Windows 2000, which was then outpacing the new operating system, but XP nonetheless held its own.

Windows Vista, which was released to businesses at the end of November 2007, saw a 0.9% penetration rate in the first quarter of 2007. By the first quarter of 2008, that number jumped to an 11.5% installed base. But again, Vista had no Windows 2000 to compete with. Indeed, it may have actually had help from Windows 2000.

In that same time frame, Windows 2000 Professional went from an 18% installed base to a 10.5% installed base, while Windows XP only lost 2.5% of its share. That suggests that companies are either upgrading from Windows 2000 Professional to Windows Vista more than they are from XP to Vista, or that the upgrades from Windows 2000 to XP are offsetting upgrades from XP to Vista. Either way you slice it, it appears upgrades from Windows 2000 -- and not just the reported corporate downgrades from Vista to XP -- are helping to keep XP alive.

One point Microsoft does have correct, regardless of the analysis of how it stacks up with previous releases: Vista uptake is unquestionably on the rise. According to Shiffler, Gartner built downgrades into its numbers, but some of the increases might be attributed to an expanding corporate PC market, shorter PC upgrade cycles for a growing fleet of corporate laptops, and increasing uptake for Vista in small and medium businesses. And there may be a bit of Windows 2000's help in there as well.

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