Has Windows Vista failed?
December 30, 2007Web User
When Microsoft extended the lifespan of its Windows XP operating system, announcing that it would remain on store shelves until June next year, it appeared that people were taking a dim view about the merits of upgrading to Windows Vista.
Windows XP was supposed to expire in January 2008, but the five-month kiss-of-life was explained by Microsoft as a response to feedback from its customers, which made industry-watchers wonder whether the real reason was that people were not prepared to upgrade to Vista, which went on sale in January this year.
Microsoft was at pains to stress that Vista was doing well, but admitted there were “some customers who need a little more time to make the switch.”
Customers of the UK retailer PC World certainly seemed to be dragging their feet when it came to upgrading to Vista.
Dixons Stores Group International (DSG), which owns the retailer, blamed poor financial results in its most recent quarter on “slow Vista-related hardware sales.”
It pointed the finger at “disappointing sales of Vista-related products and a changing sales mix” for reducing margins by around two per cent in its computing division.
But in the face of this, Microsoft announced last month that sales of Vista have reached 88 million, which is almost double the amount of copies of XP in the same period at its launch.
“With more than 88 million licenses sold as of this summer, Windows Vista is on track to be the fastest selling operating system in Microsoft's history,” Mike Haigh, Windows marketing manager for Microsoft UK, told Web User.
“We're seeing adoption that's generally in line with our expectations at this point,” he added.
The numbers game
“What DSG is saying doesn't entirely square with Microsoft's results,” said David Bradshaw, principal analyst in Ovum's software group. “Microsoft has had good Vista sales for consumers. Maybe DSG didn't get as much of the sales as it thought it would. Perhaps it had over-ambitious plans.”
We asked DSG about the apparent mis-match.
“Vista didn't perform as stratospherically as we had hoped. It wasn't all Vista's fault. We think it's a great product that is continuing to attract people, but it didn't explode in the way we anticipated,” said Mark Webb, group media relations manager for DSG.
Webb says the company expected more sales, but another factor for DSG's depressed figures is consumers changing buying habits - a trend remarked on by Microsoft which said it is seeing more retail customers purchasing their new Windows operating system when they get a new PC rather than buying it as a standalone product.
“People have not been buying Vista on its own. A lot of people bought laptops with Vista but that is not as profitable for us as people buying upgrades to the operating system. If they are going to get Vista, they are waiting until they buy a new laptop - sadly not enough people did that as we expected,” said DSG's Webb.
This could partly have been down to the timing of Vista's launch, according to Michael Gartenberg, an analyst with Jupiter Research.
“Vista was launched in mid-winter - not at a typical time when people buy PCs. We have not yet been through a consumer buying season,” he said.
To kick-start demand in the summer, DSG teamed up with Orange to offer a 'free' laptop worth £300 when customers signed up to Orange broadband.
“We sold a lot although the margins were not huge, but we had to stimulate the market,” said Webb.
Cheap PCs make the trend in changing buying habits likely to continue. A lot of consumers don't see the point of buying Vista on its own for around £100 and having to install it themselves when you can get it bundled with a new PC for as little as £300.
“Vista is a really expensive beastie on its own and we're moving to the point when only a relatively small number of people are prepared to fork out money for an operating system on its own when you consider PCs are becoming a relatively cheap commodity,” said Ovum's Bradshaw.
Upgrade appeal
Another fact worth bearing in mind is that many customers don't believe that Vista will make a great difference to their productivity or online experience.
“Vista is just another operating system which is why many people are sticking with Windows XP. Microsoft would make itself very unpopular if it didn't continue to support XP and stopped providing security updates, for example. If they don't preserve people's goodwill, they could opt for Apple Mac,” said Bradshaw.
“Web users often just want a stable platform that will give them a good browsing experience and what makes a difference is not whether you're running XP or Vista, but what browser you've got,” he added.
But a potential deterrent for upgrading to Vista are support and compatibility issues as some programmes are not available on Vista.
“One reason not to upgrade is if there is not a Vista version of an application available. I have an out-of-date photo editing application. I would have to pay a lot of money to upgrade it to my PC installed with Vista, so I keep it on my XP machine,” said Bradshaw.
Security is another issue. Although Microsoft says Vista is more secure than XP, many users have found Vista's vigilance a hassle.
“Security can seem more clunky on Vista with lots of pop-ups asking you if a programme is allowed to do something,” said Bradshaw. However, Jupiter Research's Gartenberg points out that there are always backward-compatibility issues with any new operating system.
Blowing Vista's trumpet
“It the usual growing pains of any operating system. If you look at the numbers - Vista is a success. The question is 'could it have been more successful?' Consumers need to understand all the new things in Vista and Microsoft has not done the best job at evangelising its features which helps drive upgrades,” he said.
For those of you interested in digital media, Gartenberg says Vista affords better integration of music, pictures and slideshows of content - as well as better security and stability, although he admits that is not something that necessarily sells.
Microsoft's Haigh stressed: “Windows Vista provides a computing experience that is easier, safer, more entertaining and more connected.”
However a recent Web User online survey reveals that the Microsoft message about the virtues of Vista is not hitting home.
Seventy-six per cent of respondents have no plans to upgrade to Vista, compared to 16 per cent who have made the leap, five per cent who want to make the switch, and three per cent who favour Apple Macs.
Despite the majority of those polled baulking over the upgrade, Ovum's Bradshaw believes people will buy into Vista when they next upgrade their hardware.
“People replacing their computers would be daft not to upgrade to Vista. Over time, all new software will only be available on Vista. People wanting to buy games or applications that are process-intensive will need Vista,” Bradshaw told Web User.
“There are three inevitabilities in life - death, taxes and an upgrade to your operating system,” he said.
http://www.webuser.co.uk/news/news.php?id=170930
The business cycle applies to Microsoft too. Now that the internet is already here, innovation now should be easy i.e. Mozilla Firefox, Linux etc.
