Analyst: Microsoft Missed Vista Opportunity By A Mile - InformationWeek

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Analyst: Microsoft Missed Vista Opportunity By A Mile

Most businesses aren't champing at the bit to upgrade to Windows Vista, says one survey, and that may not bode well for Microsoft's overall financial picture, which depends a lot on Vista sales.

It really doesn't matter whether Microsoft Corp. gets Windows Vista out in January 2007 or March or even June, an analyst with JupiterResearch said Tuesday, since most businesses aren't champing at the bit to upgrade their OS.

About half of the 207 companies with more than 100 employees surveyed by JupiterResearch's Joe Wilcox said that they would either pass on Vista entirely, or if they did upgrade, that they wouldn't do so until at least 13 months after the new operating system was released. Amazingly, 13 percent of those polled had not even heard of Vista.

"Thirty-eight percent of businesses said they would be begin deployment in the first 12 months after release," said Wilcox. "At first glance, that seems like a pretty good number. But there's another way to look at it."

Vista is, said Wilcox, the first Microsoft operating system upgrade in nearly 6 years, the longest gap between OS updates in the company's history. "I would have expected much more pent-up demand," he said. "If there isn't, why not?"

Wilcox blames Microsoft for missing the last major corporate PC hardware upgrade cycle. Because that's when companies move to a new OS, major customers will wait for the next cycle before taking on Vista.

"According to Microsoft's financials, 80 to 85 percent of Windows' revenue comes from OEM deals, when the OS is put on new machines," noted Wilcox. "But the last big hardware upgrade cycle was in 2004." Typically, enterprises operate under a three- or five-year hardware replacement cycle, which could put the next one as late as 2009.

"Vista didn't miss the most important deadline by just a little. It missed it by a lot," said Wilcox.

In March, Microsoft announced that Vista would not appear until November 2006 for volume license customers, and January 2007 for everyone else. During last week's financial analyst field day, however, Microsoft executives again refused to commit to those dates.

"That shows a tremendous amount of lack of commitment," Wilcox said.

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