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Tuesday 30th January 2007
Vista success depends on business adoption 7:02AM, Tuesday 30th January 2007
After more than five years of development, over 50 million lines of software code, a $6 billion investment and a few headaches, Microsoft's Windows Vista finally reaches consumers this week.

But the extent of success of the new operating system may depend more on large corporations, looking for different things than the multimedia bells and whistles aimed at home users and who have more discretion about when to buy the software.

Computers running Vista go on sale at retailers on Tuesday, two months after Microsoft made it available to corporate, or enterprise, customers. This is the first major upgrade of the Windows operating system since Microsoft first released Windows XP in October 2001.

Vista - the upgrade to the Windows operating system that runs on more than 90 percent of the world's computers - is almost certain to be a product success, and consumers have little choice but to buy Vista since nearly three-quarters of new computers sold this year will come preloaded with it.

By contrast, corporations can load older operating systems, or even non-Microsoft systems such as Linux, so the rate of corporate adoption of Vista may largely determine how fast and large a return Microsoft will see on investments for Windows Vista and its other new products, Office 2007 and Exchange e-mail server software.

Many corporate information technology executives are taking their time, as they often do for major software changes.

'If I was an IT manager and I valued my job, I wouldn't move to Vista or migrate my people to Vista for 12 months. I'd sit and wait,' said Andy Walker, a technology columnist and author of an upcoming help book on Windows Vista.

The Windows operating system is Microsoft's cash cow. It accounts for 30 percent of the company's $44 billion in sales, 60 percent of its operating profit and provides a steady stream of cash flow that allows Microsoft to venture out into new businesses like digital music players and game machines.

Research firm Gartner estimates that Windows Vista will be running on more than half of the world's consumer PCs by late 2008, but it won't be the dominant operating system for corporate computers until 2010.

'The enterprise and consumer adoption curves are very different,' said Gartner analyst Michael Silver.

Industry watchers say corporate technology departments will carefully test Vista to see how it handles applications unique to their organization. In the meantime,
 
 
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when companies upgrade to computers preloaded with Vista, they will often remove the new operating system for an older version such as Windows XP.

Companies often hold back about a year until the release of a version that fixes initial problems.

'Adopting a new Microsoft system in the first six months is being on the bleeding edge of technology,' said Keith McCall, chief technical officer at Azaleos, a service provider for Microsoft Exchange and a former executive at Microsoft.

But in the three months ended December, the number of business customers renewing software agreements or signing new contracts exceeded the company's forecasts, Microsoft said.

'In terms of people who have renewed their enterprise agreements or signed new ones, it's been very good,' Microsoft Chief Financial Officer Chris Liddell said in an interview last week. 'That makes us feel good about the intention to deploy.'

A key to the corporate success of Windows Vista will likely be better security, analysts said. New account controls make it difficult for users to make changes that could unintentionally threaten a computer's stability or security.

Another technology called BitLocker encrypts a computer's hard drive and protects data and information if a computer gets stolen or lost. As more workers travel with notebook computers that carry sensitive information, BitLocker is seen as a valuable extra layer of protection.

Many analysts and reviewers agree that Windows Vista is a marked improvement over its predecessors in terms of stability, security and productivity and those benefits alone could drive corporate customers to upgrade.

'No matter how you look at it from a corporation's point of view, it's a better product. We think there is much more incentive to switch much faster,' said Ben Bar-Haim, vice president of software at AMD.

AMD, the number 2 maker of computer processors, is expected to be a beneficiary of the upgrade to Vista since most consumers will have to buy new computers specifically to run the operating system.

Only 15 per cent of today's computers are capable of running Windows Vista Home Premium, considered to be the mainstream consumer version, according to Gartner. That is just one reason why people probably won't be lining up outside stores to buy Windows Vista out of the box on the first day of release.

In addition, the growing complexity of upgrades and general satisfaction with existing operating systems could result in a Vista launch that lacks the fanfare of previous Windows releases. A decade ago, people lined up outside stores to get a copy of Windows 95.

'You're not going to have people waiting around the block for CompUSA to open like they did 12 years ago,' said Gartner's Silver. 'However, Vista can still be successful even if people aren't lined up around the block.'

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