Back in November 2006, Steve Ballmer signalled what was supposed to be the death of Windows XP and the launch of Windows Vista, Office 2007 and Exchange 2007 by saying: “These are game-changing products. It’s an incredible step forward for business computing in a year of unprece-dented innovation from Microsoft. We expect that more than 200 million people will be using at least one of these products by the end of 2007.” As for the opportunity for Microsoft partners, Ballmer did not mince his words: “Industry analysts expect these products to represent more than $250 billion in partner revenue opportunity in the next 12 months. No set of product releases in history has ever offered this level of opportunity for the industry as a whole.” Two months later, Vista was launched on the consumer market and Ballmer was at it again. “It’s the biggest launch in software history,” he said, “and the broadest release ever.”
Rhetoric like that may help explain some of the deflation felt by people like J. T. Wang at Acer, who blamed lack of demand for Vista as the PC maker scaled back expectations for second quarter sales in June last year. The following month, Microsoft downgraded sales expectations for Vista for fiscal 2008 (which runs from July 2007 to end of June 2008) from 85% of Windows sales to 78%. Last October, market research company Context revealed that sales in Europe of PCs with Vista Business pre-loaded had declined in August to 13% of unit sales, compared to 17% in July. At the same time, sales of Windows XP Professional PCs remained at double Vista Business levels on 27%. Context found that the only flavour of Vista showing significant growth was Vista Home Premium (at the expense of XP Home and Media Center). “Since May 2007, Vista Business PC sales have not continued to grow as would have been expected, leaving XP professional appearing still to be the business operating system of choice,” the analyst noted.
A month later in the UK, Dixons Stores Group chairman Sir John Collins revealed that margins over the six months to 13 October had been ” materially impacted by the need to reduce laptop stocks following lower than expected demand for Vista-enabled products, and the effects of increas-ing hardware in the mix.” The story from the Irish channel bears out the impression that the performance of Vista differs markedly, depending on whether you’re looking at it from the consumer or business side. Rory Wil-son, managing director at Microsoft distributor Microwarehouse, says that take-up has been very good on new hardware in the consumer market, although upgrade sales from XP have been slow. On the business side, “there has been considerable reluctance in the channel to deploy (Vista)” on new hardware and upgrades have been confined to “early adopters so far”. James Finglas, managing director at MJ Flood Technology agrees.
“There’s a lot of traction in the consumer market at the moment,” he says, but when it comes to the business market, the story is very different. “Microsoft is saying it’s happy with the adoption so far but I haven’t seen a lot of adoption. There’s been a lot of conversation around it but the traction from our perspective would be low.”
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