What If Windows 7 Flops?
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The most recent Dell earnings showed steep declines in PC sales, which dragged overall corporate earnings by 23 percent. The numbers are stark: sales to large corporate customers down 32 percent and PC sales down 33 percent. The trend is not unique to Dell. HP, Lenovo, Acer and other Windows-based PC manufacturers have noted declines in conventional desktop and notebook computers throughout this recession. Microsoft has seen its PC software sales slump, as well. The culprit was once the recession forcing businesses to extend the age of PC fleets. Now, the culprit and potential savior of the PC marketplace is Windows 7. Analysts are projecting stronger sales and financial performance for Dell, Microsoft and other PC manufacturers coinciding with the release of Windows 7 later this year. They believe that Windows 7, the much-improved follow-up operating system to the disastrous Windows Vista, will be the catalyst that draws businesses and consumers to start buying computers again in great numbers. It's a helluva bet. But what if Windows 7 fails to ignite the marketplace? In the conventional technology marketplace, a new Windows release--still the dominant PC platform--would be enough to compel (another way of saying force) businesses to plan mass purchasing cycles or else risk losing support for their installed licenses or be forced to buy expensive ongoing maintenance contracts for aging operating systems. Microsoft once commanded this planned cycle of obsolescence by releasing a new version of Windows every three to five years. The cycle was broken with Vista. Released in 2007, at least two years overdue, Vista landed with a big thud. Its features and functionality were mostly elements that Apple's OS X and new versions of Linux already sported. It was a resource hog, consuming a huge hard disk footprint and an inordinate amount of memory. And its graphics requirements made it unusable by older PCs. What really damned Vista was the lack legacy support for many applications. Microsoft had promised that Vista would arrive out of the gate with a full boat of applications tested and certified for use. It didn't happen that way, and the lack of legacy support for existing infrastructures prompted businesses to stay with XP. You can see this phenomenon at work in Windows-based netbooks, all of which sport XP. The XP version they're running has a smaller footprint and memory requirement, making it more suitable for the tiny machines. Businesses picking up on the netbook prefer XP since it does support all of their legacy apps. PC manufacturers have not sat idle waiting for Windows 7's arrival. Dell, Hewlett-Packard, Acer and others have launched machines with Linux distributions as their operating systems. Several netbooks are exclusively Linux-based, too. While Windows-based PC manufacturers have suffered stark declines in desktop and notebook sales, Apple is bucking the trend with its sleek machines designed for simplicity and functionality. While PC loyalists poke holes in the aura of invincibility that surrounds Apple, there's no denying Mac's track record for performance and reliability. The migration to Apple is so great that Tech Data recently told Channel Insider that Macs and their accessories are the best-selling line in its PC division. As Apple and Linux continue to make gains at Microsoft's expense, another threat looms on Microsoft's periphery: Google. The search giant is working on converting its Chrome browser into a full-fledged operating system for release in 2010. Google's entry with a lightweight "good enough" OS could further disrupt Microsoft's dominance. At the very least, it will steal buzz and cause businesses to rethink their platform strategy - and that's enough to slow sales cycles. Computer manufacturers, distributors and resellers are gearing up for the release of Windows 7, which reviewers thus far have given high marks for quality and performance. But it remains to be seen whether Windows 7 can reignite the PC marketplace, particularly in business environments. Consider this: In previous Windows releases, consumers were typically the early adopters of the new platform, since retailers were given the home versions first. Businesses, on the other hand, typically waited until Service Pack 1 was released, giving the new version shakeout time for bugs, vulnerabilities and interoperability problems. So it stands to reason that trend won't change with Windows 7, particularly given the collective experience with Vista. What if Windows 7 is released and no one bites? What if Windows 7 performs no better than previous iterations? What if businesses and users decide to sit on the sidelines and wait for cloud-based alternatives? What if they decide that rather than refresh with a Windows machine that they go with a Mac or a Linux machine (at least they would be buying)? What if businesses decide to migrate more to thin clients and cloud-based applications that don't require a full-featured operating system like Windows 7? For the marketplace's sake, Windows 7 needs to be a success. However, even a sluggishly performing Windows 7 spells trouble for the PC market and, potentially, could mark the end of the conventional PC buy/spend cycle. |
Comments (14)
The backlash lessons from Vista cannot be ignored - and the stakes are now arguably higher. And the implications more profound. Linux is still too techie for the masses and OS X (because of a Mac purchase)is still a premium. Lesson for MSFT: make the apps work, make it secure, make it stable, and charge $29 for the upgrade. (Thank you Snow Leopard.)
Rob Ciampa
Posted by Rob Ciampa | September 16, 2009 9:13 AM
The bottom line is whether Windows 7 will deliver useability and productivity improvements along with stability and security. We believe it will. In our testing, W7 performs better than XP and dramatically better than Vista on the same hardware. Enhancements such as the improved taskbar with jump lists and search functionality add to the productivity gains that users will experience. Businesses may be slow to adopt in the early going, but in my opinion, Windows 7 will not fail in the long run.
Posted by Frank Ballatore | September 16, 2009 9:31 AM
First - I have been using Windows 7 for about a year and find it to be stable and useable. However the question is how does its success or failure effect our business, and I do not see an effect either way. We have total system responsibility for our clients so our engagement covers the entire enterprise which means we have to make what is available work.
Posted by Keith Nelson | September 16, 2009 11:05 AM
I have also been using Windows 7 since RC, and it is the fastest and most stable Windows desktop OS ever. I have now installed Windows 7 Enterprise RTM on 2 of my laptops and 2 of my desktops. On my Dell Latitude E4300 with a 250GB SSD drive...it fully boots in 7 fricken seconds!! Applications such as Outlook launch about 2 or 3 seconds...amazing! It also boots fast on my Dell E6400 with a 7200 RPM SATA...45 seconds fully booted up (35 if I disable Symantec Endpoint Protection).
As far as moving my company to Windows 7, I will be only upgrading selected laptops that need the extra speed, and will only be moving us to Windows 7 as I bring in new desktops and laptops. Vista works well enough for us and it is not worth the extra work on our existing PC's
Posted by A Mirza | September 16, 2009 6:10 PM
I've been running Win7 since early this year. Even the beta proved to be trouble-free. The RC even more so. I will be moving to it on both home systems, desktop and laptop, as soon as possible.
In talking with our IT Director he is planning on having it on the new systems but probably will not update existing ones.
I have a Mac friend that is still kicking himself for jumping on Snow Leopard so fast. He has several key apps that are not Snow Leopard compatible. The vendors say it will be a couple of months before the patches are ready. As for Win7 I haven't found anything yet that does not run and I've tried some old software.
Posted by Steve | September 17, 2009 12:26 PM
Failure of Windows7 could be the best thing that happens in the industry. Destruction of the Microsoft ecosystem will force IT leaders and followers to rethink the paradigm; including value vs price of the equipment they purchase. Not to mention that $999 gets you an unlimited XServe license. Yes - that is UNLIMITED.
We did that analysis some time ago and switched to Apple. We could not be more pleased or rewarded. The investment has been repaid many times over.
And NO we are not an Ad Agency, Film Maker or Graphics shop. We design and develop industrial automation systems for heavy industry and container terminal operations.
Posted by Daniel Reiss | September 17, 2009 12:45 PM
"Analysts are projecting stronger sales and financial performance for Dell, Microsoft and other PC manufacturers..."
I don't recall seeing any Microsoft-branded PCs in stores recently.
Or do you really mean "Analysts are projecting stronger sales and financial performance for Dell and other PC manufacturers as well as Microsoft"?
Posted by Stratocaster | September 17, 2009 5:51 PM
Window 7 will not fail. XP is long in the tooth and MS has addressed most of the issues that sunk Vista (which deserved to die). The pent up demand for a better OS ensures W7 success.
MacOS provides a viable alternative so people have more choice and with a good version of Windows, the world is in a better place. The monopoly days of old are gone and consumers are the winners.
My pc is a mac but most of the people I work with run windows and no one is affected in a negative way.
Posted by MikeM | September 18, 2009 8:44 AM
Win 7 is Vista SP2. A wolf in sheep's clothes. Be afraid, be very afraid. I am sticking with XP, running in classic mode.
Posted by Gary | September 18, 2009 9:51 AM
Windows 7 isn't bad. It for sure wasn't difficult to make it better than Vista. But is Windows 7 noticeably better than XP or other non-Windows offerings? I heavily doubt that. Windows 7 looks pretty, but besides that it has the performance of XP on the same hardware, it still uses the outdated NTFS as file system, and really doesn't do anything better, faster, or more reliable than XP. What really bugs me about Windows 7 is that yet again the UI was changed without any reason and without any concept. Sure, things change and one needs to adjust, but after adjustment it still doesn't make sense. Same applies for the dreadful ribbon that creeps into every corner.
If I want pretty and expensive, I buy a Mac. If I want pretty with some work to do on my own, I get Linux. Microsoft was in the past the less pretty, less stable, less expensive option that did it all. Now it is only pretty, very expensive, still unstable (W7 blue screened several times when applying the few updates available), that does less than the predecessor XP. And I am supposed to shell out some serious amount of money for that? I'm with Rob: 29$ upgrade for any XP user. Vista users should get the upgrade for free as compensation for pain and suffering.
Posted by Dave | September 19, 2009 6:54 AM
I have tried Windows 7, and yes its better than Vista. Is it better than XP, debatable. The window dressing is different, but from a usability stand point its about the same. Whether its really more secure only time will tell.
Windows 7 success will depend upon there being the same market for the desktop PC, with a full blown OS, as there has been in the past. I am not sure there is, particularly given the current economy. I think that a combination of Vistas problems, the economic downturn, advances in computing and communication devices, and the growth in SaaS offering (e.g. Google apps) have changed the personal computing landscape. For example I have co-workers who do everything with a Blackberry or an iPhone. Among my personal friends who are I believe are average consumers, who wants to surf the net and read emails, a netbook with a good browser fits the bill in both senses.
Is there still a market for the desktop PC with a full blown OS anymore? Probably, but I think that its considerably smaller than in the past.
Will Windows 7 be a flop, probably not, but I don’t think it will as successful as previous Windows offerings simply because the market has changed.
Posted by JLA | September 19, 2009 1:31 PM
In the wake of its failure with Vista, Microsoft has certainly made a strong effort to ensure faster adoption of Windows 7. Many IT professionals are already running some version of Windows 7 and have been eagerly awaiting the arrival of the product. Many of my SMB clients have put off upgrades in anticipation of the release, as well. I believe this will be a strong product release for Microsoft.
As for Apple, they will likely continue to gain market share but they need to decide if they are going to be a business OS or not. I don't forsee mass implementations of these machines in enterprise or even SMB environments because they are too expensive, extremely proprietary, and have little support for policy controls expected by most businesses. Linux is a much more capable business operating system but needs a strong market leader with good support.
As to your point on netbooks, I agree that there popularity will rise, especially amongst sales professionals and users who typically access systems remotely. Netbook sales will increase with the popularity of software-as-a-service and increased adoption of remote access solutions. However, I will personally not be recommending netbooks to most clients until they have a business class OS like Windows 7 that offers the policy control that I think most businesses require in one form or another.
Posted by Jim Locke | September 20, 2009 2:12 PM
Once people get over their fear of Linux (I just did), both Apple and Microsoft will be toast.
Posted by jim | September 21, 2009 12:18 PM
Good information and well worth considering...
BUT, I have been using Vista in a school environment (three labs running Vista) and we've had virtually no problems and issues with the computers. The price for the computers is reasonable and the OS is good.
Issues of compatibility have been nonexistent and those that did arise were due to vendors not adapting their software to the new OS. Come on...vendors had a heads-up on Vista before it came out and could get their hands on it in trials. Many just sat on their hands and did nothing...then groaned if their software was not compatible. We even had one vendor saying to us for over a year that they did not support Vista as an OS.
Posted by DaveL | September 21, 2009 4:45 PM