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Windows 7 cleans up

Posted on 16 Jun 2009 at 00:00

While welcoming the arrival of a virtual windows xp in windows 7, Jon Honeyball still fears that Microsoft isn't being brave enough.

Maybe the "minwin" plans for Windows 8 really will permit pushing Hyper-V onto the desktop, so that each OS and version sits in its own container, and dirty apps can be confined to a workspace that's shut down, reset and zeroed out every time you turn off your PC. If that is the longer-term plan, then the starting point of Virtual PC on business machines today might well be a good balance between power and hardware suitability. Time will tell.

And now for another prediction. Despite all the various kinds of nonsense that Microsoft has been pouring its money into in recent years, its core server team and server-side applications group have continued to bring home the bacon, year after year. I'm far less impressed, however, by the Office group that gives every impression of being driven by flights of fancy (especially in the UI area), and is far too happy screwing around with features that work well enough and making them worse, while ignoring the things that don't work.

The Windows client group, though, has had a really rough time of it recently, but I genuinely think that Windows 7 will be the best, most significant and most honest release of Windows since Windows 95. Back then the task was to lead the user base forward into 32-bit computing and to a new, modern UI, and it achieved that well enough, but everything it's touched since then has been, frankly, fairly unpleasant. The merging of the Win9x line into the NT desktop was a slow-motion disaster, and yet the lessons weren't learned. Vista compounded this mess by being the wrong product, delivering far too little, far too late. Windows 7, however, has all the hallmarks of being a vintage release. It's exactly right for the hardware installed base of today, even though I do wish Microsoft had been more progressive in its push toward 64-bit and Hyper-V. That looks like it will come with Windows 8, and this is a route forward that is deliverable. The Virtual PC support for XP in Windows 7 is a start, but it's clear that the Windows desktop group is finally pulling its collective head out of its artichoke.

Microsoft revenues

This would seem to be a historic turning point for Microsoft's balance sheet as well - the corporation has just reported the first ever revenue decline in its history. Take a look at the numbers at www.pcpro.co.uk/links/178advwin, which are quite fascinating. Look at the "Client" sector - which is Windows desktop - and you'll notice that the revenue was $3.4bn (a 15% drop) with a profit of $2.5bn (a 19% drop); server and tools was $3.4bn revenue (a 7% rise) with a profit of $1.3bn (a 24% rise); while Business group, which is mostly the Office product, had $4.5bn revenue (a 4.7% drop) with a profit of $2.8bn (an 8% drop). These are still strong figures by the standards of most companies, despite the drop in profits on two of the three sectors, and given the state of the economy.

Now look at the other two main areas that Microsoft has highlighted: "Online" had revenues of $721m (a drop of 15%), with a loss of $575m (increase in losses by 155%); and "Entertainment and devices" with revenues of $1.567bn (drop of 1.57%) and a loss of $31m (increased loss by 129%). Both of those divisions are generating reasonable revenues - no-one could sniff at a near $2.5bn per quarter - but their losses are already huge and growing fast. Whether this is due to investment in the datacenter strategy isn't clear, but a half-billion-dollar loss in a quarter is a chilling amount of red ink to have on your balance sheet. Something needs to change here, and change rapidly.

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