XP deadline matters little to business customers

The countdown is nearly over: Monday marks the long-awaited date after which PCs preloaded with Windows XP will no longer be available.

But now that the date is imminent, does anybody care? The segment of Windows users that cares about XP's end of life -- business customers -- isn't affected by this date and can still get its hands on XP for the foreseeable future.

June 30 is the Microsoft-imposed deadline after which PC makers won't be able to sell computers prepackaged with XP and after which Microsoft will no longer sell shrink-wrapped copies of the OS. The exception is low-cost notebooks, which can continue to ship with XP through June 30, 2010.

Microsoft has been talking about phasing out XP essentially since it launched Vista, and the process has been similar to previous Windows client upgrades.

Yet the XP deadline has been making waves, for a couple of reasons. "This date has passed at least four times in the past without any coverage," said Michael Cherry, an analyst with Directions on Microsoft. He's referring to past upgrades, from Windows 2000 to XP, for example.

"Why is this a story?" he said. "Because whether or not it's true, the perception is that Vista is a bad OS."

Vista had a rocky launch with many users complaining of performance glitches and particular problems when running the OS on computers other than the very fastest, high-end machines.

Still, reluctance to upgrade now, more than a year after Vista launched, varies widely between consumer and enterprise customers.

While XP's deadline affects consumers more so than business users -- enterprises also must buy PCs that come with Vista but they'll be able to downgrade to XP -- many home Windows users are largely just fine with buying Vista machines.

IDC is expecting so few consumers to buy XP machines this year, that it is projecting that as many as 98 percent of consumer PCs sold in 2008 will use Vista.

That's very different than the enterprise customer. While around 70 percent of business buyers will purchase Vista computers in 2008, probably half will downgrade to XP, said Al Gillen, an analyst with IDC. So only around 35 percent of new business PCs sold in 2008 will use Vista, he said.

Consumers, who may hope to buy a PC that will last for several years, are more interested in buying the latest technology, the analysts said.

"When you go out and buy a new machine, I'm not sure you want it with an 8-year-old operating system," Gillen noted. Most consumers will want to "move forward rather than look backward," he said.

"I think it's better for customers not to go back," Cherry agreed. Even though Microsoft will continue to support XP, consumers will be better off going with the newest OS, which also is the one Microsoft is actively maintaining, he said.

However, savvy consumers who really want to buy new machines with XP can still get it several ways. They can simply go to Dell's Web site and order one of the business PCs, which come with Vista but can be downgraded to XP, Gillen said.

In addition, Microsoft will continue to allow the low-cost laptops to ship with XP.

Microsoft is also allowing small specialty PC builders to sell computers with XP through January 2009. Consumers may also see shrink wrapped copies of the software and even PCs with XP in stores for a while as the shops empty inventory, Microsoft said.

But while consumers may happily buy Vista, stories of enterprise resistance continue to pop up. Notably, Microsoft partner Intel recently said that XP is and will be by far the dominant OS for the bulk of Intel's 80,000 employees. The company is testing and deploying Vista in certain departments, it said.

Enterprises are perhaps more aware of the technical issues that plagued Vista at launch and they want to be sure that any new OS will work well with existing software investments.

Microsoft continues to encourage enterprise customers to upgrade. In a letter sent a week before June 30 to business users of Windows, Bill Veghte, Microsoft senior vice president of online services and the Windows business group, laid out the ways that enterprises can continue to use XP and also described reasons that they should upgrade to Vista.

He acknowledged the early issues Vista had at launch and said they've been addressed. "The architectural changes that improved security and resilience in Windows Vista led to compatibility issues with existing hardware and applications," Veghte wrote. "Many hardware drivers and applications needed to be updated, and while the majority worked well when we launched Windows Vista, some key applications and drivers were not yet available." Vista now supports twice as many components and devices as it did at launch, he said.

According to a spokeswoman from Microsoft's public relations firm, there is no deadline for the XP downgrade offer for business customers. There is a deadline, however, for when Microsoft will supply XP discs to the manufacturers to include in the box with a new PC. After January 2009, if a business customer wants to downgrade to XP, it will have to work directly with Microsoft to do so.


Copyright © 2008 IDG Communications, Inc.

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