April 12, 2004 4:00 AM PDT
Microsoft: Not enough XPerienced PCs
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"In the area of deployment, I don't think that's met my expectations," Kevin Johnson, Microsoft's group vice president for worldwide sales and marketing, told CNET News.com in a recent interview.
What's new:
Windows XP is shipping out preinstalled on a lot of new computers, but Microsoft is unhappy with corporate reluctance to upgrade existing PCs.
Bottom line:
Microsoft thrives on customers coming along for the upgrade ride. To combat lethargic adoption rates, it plans sell XP's benefits more aggressively.
An executive at one Microsoft customer, computer security firm SecureMethods, explained that there just isn't enough in Windows XP to justify the time and costs of upgrading. Rather than pay for a companywide license to use the latest version of Windows, SecureMethods just takes whatever OS comes installed on new PCs.
"We don't actively upgrade computers," said CTO Paul Clark, adding that PCs have a life of three to four years. "When we buy new laptops, if they come with XP, that's great. We don't buy (new) licenses."
With more than 90 percent of the world's PCs running some form on Windows, Microsoft has long considered its chief competition to be its installed base--convincing customers that they need a new OS can be a tough sell. That's been especially true with XP, which after two-and-a-half years on the market is installed at about 62 percent of businesses with revenue of $50 million or more, according to Jupiter Research.
In addition, a study in December found that 80 percent of companies still have some machines running Windows 95 or Windows 98. And at firms running the older operating systems, an average of 39 percent of desktops were running either Windows 95 or Windows 98, according to technology consultant AssetMetrix.
Even more troubling for Microsoft is the fact that many corporate buyers who already have a license to install XP are remaining on the sidelines. "In the enterprise, it is not a situation where customers don't have license to it," Johnson said.
Microsoft faces a similar issue on the server side, with many of its customers clinging to older versions of the OS. Some analysts estimate that up to 40 percent of servers still run Microsoft's two-generations-old Windows NT 4.
It's not about the money
Even though Microsoft has already collected its revenue from
businesses that pay for licenses but don't install the OS, it's still important to the software maker that more customers use its latest products.
"Microsoft doesn't work on the health club model, where they sell memberships and hope people don't use them," said Jupiter Research analyst Michael Gartenberg. "In order to generate success down the road, Microsoft has got to get people to use the licenses they have."
Otherwise, Gartenberg said, companies won't buy the next license, or the one after that.
"Microsoft doesn't work on the health club model, where they sell
memberships and hope people don't use them."
Jupiter Research analyst
As for why XP has not received a better reception, Johnson suspects that many customers, like Microsoft itself, have been busy with security issues.
"Customers had to put a lot of their IT focus--and we've made that a priority as well--on how to create a more secure environment," he said.
The story inside large companies contrasts sharply with the strong overall sales of Windows XP, which has benefited from an upturn in the market for new computers. Strong PC sales, for example, helped boost Microsoft to record sales for the quarter that ended in December.
Johnson and Microsoft CEO Steve Ballmer expressed hopes that Windows XP Service Pack 2, a security-focused update set to ship in a few months, will persuade more businesses to make the switch.
"I think it might," Ballmer said. "What we will tell people is, 'Look if you are looking at an upgrade, this should be a thing that puts you over the top.'"
The harder sell
Microsoft is also looking at ways to make customers more aware of the benefits of Windows XP. The company has been considering a variety of
ways to "add value to Windows XP" under a plan known as "Windows XP Reloaded."
Windows chief Jim Allchin said the company is looking at a marketing campaign that would tout XP, the service pack and some new additions to the Windows lineup, including updates to both the Tablet PC and Media Center editions of XP, as well as the portable media center devices that will debut later this year. Also under consideration is an update to the version of Windows XP that ships on new computers. The update would add a new version of Windows Media Player, among other enhancements.
Microsoft hopes the campaign does get customers to load XP. Even in cases in which it won't derive additional revenue from the upgrade, Microsoft benefits in a variety of ways when more of its users are on the latest versions of its software. Newer versions typically result in fewer support headaches and higher customer satisfaction, as well as offering better security.
"The irony is that Microsoft has a very good offering (with) Windows XP," Gartenberg said. "It's not a technology issue. It's a marketing challenge, and one they need to address pretty quickly."
Now as Edge Demon said the weak part of XP is the upgrading. One should not have to wipe out their system and do a fresh install to get the upgrade going smoothly. Everyone that has ever upgraded Windows knows that going over the old OS is a very bad idea. Microsoft I think needs to spend a little more time on the upgrade routine that you can reliably and with stability upgrade over older versions of Windows. This would sure make the whole process easier and more appealing to all customers.
That said any one that doesn't upgrade to Windows XP is a fool. If you like seeing the blue screen of death or having to reboot everytime you turn around then I guess Windows XP isn't for you.
Robert
not update my Windows 2000. I looked around for
another OS. I downloaded and installed Red Hat 9,
dual booting with Windows 2000. My goal was to
replace all my windows apps with linux apps. My
goal is now 90% complete. Interestingly, my
linux apps only cost the time to download them
using Apt-get and Synaptic..There are hundreds of
free programs and I have multiple movie viewers,
sound players, editors, games, and office
applications. I use the Kde Desktop which offers
multiple desktops and an interesting taskbar.
Updating the system is easy and fast with many
kernels to choose from. I use Kopete for my
instant messengers...it does them all from msn to
yahoo and icq and lists all the contacts.
Windows 2000 is boring to me now. I want to get
off of it as soon as possible and get back to my
linux.
The only disadvantage: it is a different
operating system and you have to relearn the
basics. It took me about 3 months to learn, but
it was fun for me.
We also only have a couple of copies of MS Office for reading outside materials. We manage to get Corel's WordPeferfect Office (OEM) for under $50 when we buy hard drives and things like that.
The fine print of a Microsoft license is miserable. If it weren't for our client-server accounting app, I would work to drop MS altogether.
How could anyone justify the somewhat high price of upgrading just the OS... for what? to make my older machine run **slower**???? I think not!!! Anyone who's ever tried that will never try it again, even if they give away upgrades for free!
Nay, I convert older machines to run much more efficient (but slightly less user friendly) OSes like a certain open source one. It's the only thing those old clunkers are good for!
I installed a new mb with registration I desided to go back to my win98 se. This is the main resion I stopped buying from bruderbun programs. Don't want the damn hassel of registration befoe it will work I think that snail mail of the reg card should be suffient. I will not by programs that
roped you into a registration must to run an install, NO WAY
Richard
The IT industry has reached a point where true improvements in IT's ability to produce have all but come to a stop. Small improvements hardly warrant the every 2 or 3 year upgrade plan that we have been forced to follow by MS. The consumer has been taken by MS in every economic sense of the word.
And still, MS keeps trying to strangle the consumer back into submission. MS percentages are going to come down a whole lot more before it is over. They will continue to drop until MS bows to the consumer as the King of the economic process. And the consumer does indeed have all the power in the economic process. It is only by defrauding the consumer has MS gotten where they are.
All of this boils down to economics. Every fact can be argued. But the shifting away from MS by consumers is a result of economic factors that behave the same day after day. The Balance Sheet is going to determine its "truth" and that is all that will matter.