Microsoft’s new horizon

Microsoft has finally launched its much-hyped Vista operating system, but has it got the right ingredients to persuade the mass market to accept it?

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By  Published  December 8, 2006

It is finally here. The launch of the latest version of Microsoft’s flagship operating system (OS), Windows Vista, can be safely described as the biggest event in the world’s IT industry this year.

Now available globally to business users on volume accounts — and to the rest of the world from January 30 next year — attention will be trained on Vista like no other product launched in the IT space for the next year or so. That is hardly surprising.

Any product that could eventually find its way onto the vast majority of the one billion PCs estimated to be in use around the world by 2007 is a big deal.
A very big deal.

It has been five years since the software giant’s chairman Bill Gates launched Vista’s predecessor, XP, with the help of the then-NYC mayor Rudolph Giuliani and international popstar Sting.

This time round it was company CEO Steve Ballmer — alongside Nasdaq president and CEO Robert Greifeld and Michael Wolf, president and CEO of MTV — spearheading the combined launch of Vista, Office 2007 and Exchange Server 2007.

“It’s an incredible step forward for business computing in a year of unprecedented 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,” claimed Ballmer at a special event at New York’s Nasdaq stock exchange.

The introduction of Vista signalled the culmination of US$20 billion in research and development (R&D) and ends a long, drawn-out process with the path to that celebrity launch last month littered with delays, controversy, accusations, anti-trust concerns and lawsuits.

Now that it is finally shipping however, the key issue is around just how many users will
upgrade and indeed why should they. After all, the main reason for most product upgrades is
to get compelling new features in the latest version that were not there before.

Does Vista deliver here?

The most talked about features in the new OS, for different reasons, are the radically redesign- ed graphical user interface (GUI) known as Aero, beefed up security features and the addition of desktop search functionality.

In addition to these Microsoft has also included improvements in user account control, as well as built-in self-diagnostic tools, encryption capabilities, and virtual collaboration environments.

Steve Kleynhans, vice president of Client Computing at Gartner, says that although th- ere is no one standout feature that will make businesses rush out and buy it, there are enough improvements throughout the OS to make it an attractive offering.

“Vista itself, if you look at what is in it, does have some value. There are some very nice improvements in the OS, particularly around security and some of the emphasis around administration and management,” Kleynhans explains.

“There is some polishing up and updating of the OS and the [user interface] to make it look a little more modern, to better leverage some of the hardware we’ve got today, and to implement some of the latest best practices that have been developed over the past few years.

Adding security

The most talked about, one could say controversial, features in Vista are the improvements
in security.

The OS includes more advanced user account control, Windows service hardening that restricts critical Windows services from making unauthorised changes in the file system, improved browser security, preinstalled firewalls, and network access protection.

By packaging these features into the OS, and initially excluding security vendors from access to Vista’s central code, Microsoft has been seen to be stamping on the toes of the big security firms — such as Symantec and McAfee — in a big way.

McAfee felt so strongly about what Microsoft was doing that it took a full-page advert out in the UK’s Financial Times newspaper stating that the software giant’s aim was to see “a world in which one giant company not only controls the systems that drive most computers around the world but also the security that protects those computers [...] when it fails, it fails for 97% of the world’s desktops”.

An example of the difficulties security vendors have had preparing products for Vista’s release is that on November 30 only McAfee had products on the market to protect users of the OS.

Symantec, Trend Micro and CA are all still working on theirs.

Ali Faramawy, regional director, Microsoft MEA, says that the software giant is not “necessarily” trying to make other security vendors’ solutions unnecessary, but simply trying to make Vista as secure as possible right out of the box.

“We will continue to try and do our absolute best to make the most complete and secure platform possible,” states Faramawy.

But it is not just the security improvements in Vista that the likes of Symantec and McAfee have to worry about.

Microsoft also launched its own security suite, OneCare, in May this year and by the end of June, it had grabbed 15.4% of retail security suite sales, according to market research firm the NPD Group.

It is this sort of impact that the Microsoft brand can have that is such a big concern for rival vendors.

Security software providers are very concerned about Microsoft’s foray into their market, and Luis Praxmarer, Experton Group CEO and global research director, thinks they should be.

“Security companies should be very concerned. We still believe they have a lead at least in the enterprise environment because they are taken more seriously as security suppliers than Microsoft, but everyone knows if Microsoft moves into a certain space and they want to conquer an area, they will keep trying for as long as it takes,” warns Praxmarer.

“The discussions we are going to have about Vista’s security could also create a perception
in the minds of a lot of users that maybe Microsoft, because it has the operating system, is also the best solution for security, which at the moment it definitely is not,” he claims.
On the flip side, as Kleynhans points out, it is perhaps a little harsh to criticise Microsoft for trying to tackle the security flaws in its OS.

“Microsoft gets criticised all the time for the fact that its products have a lot of holes, so it is hard to criticise it for starting to plug those holes. Now whether it’s chosen the right method for plugging the holes, that is up for debate. But I think you need to applaud it for at least making the moves to respond to the security issues,” Kleynhans states.

In any case, the security firms have been quick to fight back by differentiating their offerings from what Microsoft is providing.

For instance, Symantec’s regional director Kevin Isaac says its offerings protect against a much broader range of threats.

“If you are dealing with one point of security that is fine, but it’s like dealing with one issue and it is not sufficient in terms of dealing with customers needs. They are going to be [more] focused on the operating system than anything else. So yes there might be some extra features built into it, but are they going to be able to remain ahead of the game like we are?” Isaac asks rhetorically.

McAfee regional director Patrick Hayati adds: “The market today is more confusing than ever with the company selling the OS also trying to sell a product to protect that OS. PC users need to protect themselves using the best technology available out there.”

While Microsoft’s improved security capabilities could be seen as an offensive move against the established players in the market, the inclusion of desktop search has been perceived as a defensive step to counter Google’s own successful desktop search tool.

Desktop search

Within Vista’s start menu is embedded an ‘Instant Search’ box that will look for any file on the PC that contains the word or phrase that is typed in.

The way information is stored in Vista has also been changed.

The traditional file path of folders and files separated by slashes has been done away with and instead Instant Search is able to just point to the correct file through a system of indexing filenames, metatags and even file content.

“Microsoft is in a defensive position in the search space. They are concerned about the dominance Google has in the search area. Therefore this is a very important move for Microsoft internally in trying to make sure they keep their dominance on the desktop,” suggests Praxmarer.

Kleynhans says Vista’s Instant Search is not purely a defensive move and would have happened eventually: Google just beat Microsoft to the punch.

“I think there is some of that [the integration of desktop search being a defensive move]. But the integration of search is something that was going to be inevitable in the operating system,” he states.

From a business perspective, Microsoft’s new GUI Aero is the feature that has been looked at most sceptically.

The software developer has been pushing the look and feel of Vista a lot in the run-up to the OS’s release and, because of the focus on this, businesses could be forgiven for asking just how that will help them and increase employees’ productivity.

However, Microsoft is sticking to its guns in pushing the attributes of Aero, even in the business space.

“The visuals are very important. The compelling visuals, things that are pleasant on the eye. Some people might dilute that and say that it is not very important, but from my experience — on a tough day — you want a rich experience.

“You want a capiivating experience,” argues Microsoft’s Faramawy.

Of the less high-profile additions to Vista, Kleynhans points to the user account control capabilities as being a definite benefit for business customers.

“Organisations by and large are very concerned about the fact that they have to give their users administrative rights on their PCs.

“This opens up the possibility for all kinds of abuse, whether intentional or accidental. So they really like the ability to strip down the rights they give to their users, but not impact the users day-to-day ability to work with the systems,” he explains, adding that this is particularly true when talking about mobile PCs.

“As people shift increasingly towards notebook computers organisations want to be able
to restrict their exposure and taking away some of the rights of the user is an important factor here,” Kleynhans adds.

Upgrade issues

pushing all Vista’s new features so fervently, especially the most obvious ones like the visuals, is because the vendor has an underlying problem in getting businesses to upgrade from XP, namely that there is not much wrong with the OS. XP is a good, solid operating system.
“The difference between XP and Vista is everyone was looking forward to XP because before what they had was very unstable. XP delivered for the first time a pretty stable system,” comments Praxmarer.

“So there is no big pain point to make customers move. But if there is no pain then you have to offer something. It is different this time, so therefore Microsoft has tried to pack a lot of new features in.”

However these new features are received, realistically it will be some time before we see Vista on the majority of PCs. Analysts’ estimates range from between 10 and 15% of computers worldwide will be running Vista in the first year, but much of this will be in the consumer space or in very small businesses.

For large enterprises, and medium-sized business that have more control over their IT environment, the general consensus is that it will take anything from 15 to 18 months before they begin to roll out Vista.

“With large enterprises we do not expect a quick upgrade to Vista at all,” says Praxmarer.

“First they will wait at least six to nine months to see how stable it is, what the feedback is, and they will start testing and examining the OS. But even for the next 18 months we do not
expect a lot of large enterprises to upgrade.”

Kleynhans adds: “Most companies are saying that they are looking at Vista as something they’ll be doing in the second half of 2008, not something they are actively going to be trying to roll out in 2007.”

A recent poll by online retailer CDW found that of the 86% of IT decision-makers surveyed that said their companies planned to implement Vista, only 20% said they would do so in the next year.

An IT Weekly online poll also found scepticism in the industry. Around 45% of respondents said they had no plans to upgrade to Vista and of the rest, 27.5% said they would not consider upgrading until their next PC replacement cycle.

As for when we will see the majority of PCs running on Vista, analysts do not see this happening for at least the next four years.

“It will probably be the end of the decade [before we see most PCs running Vista], says Kleynhans.

He predicts most companies will not go for a “big bang” migration, and very few will upgrade existing stocks of PCs to be ‘Vista Ready’.

So even when the decision is taken to roll out the OS and all the preparation work has been done, medium and large enterprises will not deploy Vista on all their machines at once.

“We expect Vista is going tobe done through attrition,” says Kleynhans.
“So as organisations replace their PCs on a regular rate they’ll bring the new machines in with Vista and keep the old machines running XP.

“So given that kind of slow turnover, it’ll be 2010 before we really see Vista starting to become a force in the corporate installed base.”

Kleynhans says organisations need to think long and hard about how much cost they are willing to accept through the migration process and whether the benefits that come with the operating system make it worthwhile.

“A company has to make the decision how quickly it wants to move on trying to deploy Vista in its environment because there are costs associated with making the change, with testing and developing the environment, and with support once you have put it in,” he details.

Microsoft itself does admit that there will not be an instant take-up in the medium and large
enterprises, but Microsoft’s Faramawy contends that within 12 months there will be active deployments covering approximately 20% of all desktops in the enterprise space.

“Come 12 months from now you will either have deployment done or decisions being made on deployments covering 20% and then [deployment of Vista will be] much faster afterwards,” Faramawy states.

“In the enterprise space, in many cases, people have already taken the decision to go for it, but then the planning of the actual adoption, especially for organisations that span multiple locations, multiple geographies, use applications from many ISVs [independent software [vendors], and so on, takes time.


Local adopters

There have already been some early adopters in the Middle East, and there are suggestions take-up of Vista here could be quicker than in more mature markets such as the US and Europe.

This may have more to do with the region’s high growth rate and large number of SMBs in the market than anything else — around three-quarters of all companies here are classified as SMBs.

The first Vista implementation in the Middle East and Africa was announced at last month’s Gitex trade show.

Dubai’s Burj Al Arab hotel made the OS available for guests as of November 21, way ahead of the official international launch date of November 30.

The UAE’s e-TQM College has also deployed Microsoft’s new Windows Vista and its Office 2007 business application suite across the entire organisation.

What about the impact on hardware vendors? All PC makers will be hoping the release of Vista, and the millions of marketing dollars that Microsoft will be throwing behind the OS, will drive PC demand.

Vendors will be hoping increased sales will make up for the millions of dollars analysts estimate PC manufacturers will lose because of the delay to Vista, causing them to miss out on the lucrative Christmas holiday sales. Originally the OS was scheduled for release in the second half of this year.

To try and counteract the effect of this, manufacturers have been taking part in Microsoft’s voucher scheme whereby customers that buy at retail can upgrade their machines to the new operating system for free come January 30 next year.

Vendors have also been selling ‘Vista ready’ desktop and notebook PCs since August in an effort to get the message out that there is no need to wait till January to buy.

“Since August all of our products are coming with a Vista capable logo. The message we are trying to get out is that if you buy a HP machine which comes with Windows XP Professional or the Windows XP home media centre, you can upgrade to Vista equivalent edition for free,” says Vishnu Taimni, HP business notebooks and handhelds product manager.

“We are also supporting Microsoft in branding and getting key messages out to the market, as well as taking part in the Vista road show Microsoft is going
to be having.”

Manufacturers in the region are taking a cautious approach to the impact Vista will have on revenues. “It may help give us a slight boost in sales,” says Taimni.

Toshiba regional public relations manager Manuel Linnig adds: “Will we sell more PCs because of Vista? Probably no. I think it will have a little impact, but will not make a huge difference.”

Gartner’s Kleynhans thinks it is unlikely PC manufacturers will sell any more units. He contends that the way hardware vendors will benefit from the launch of Vista is by up-selling PCs.

“For most of the PC manufacturers, their best hope with Vista is probably that they can convince people to buy more expensive machines, sell them up to more memory, larger hard drives or faster processors than they would have purchased before,” he comments.

Despite the magnitude of the event, Vista’s launch is unlikely to have a tangible and measurable impact on the market for at least a year or two and perhaps longer.

How Microsoft’s dealings with security vendors will impact on the security of its OS, and the vendors’ ability to compete in the market, may not be clear for at least a few years. Neither may the productivity claims that Microsoft espouses around the OS’s new search and organisational systems.

This is why Kleyhans stresses that businesses need to step back and take the time to look at the benefits upgrading to Vista will bring and plan a timeframe that balances the cost of implementing the operating system against those benefits.

Businesses need to remember than they are going to get there eventually, so perhaps there is no need to rush towards Vista.

“Everyone knows if Microsoft moves into a certain space and they want to conquer an area, they will keep trying for as long as it takes.”


“Most companies are saying that they are looking at Vista as something they’ll be doing in the second half of 2008, not something they are actively going to be trying to roll out in 2007.”


“A company has to make the decision how quickly it wants to move on trying to deploy Vista in its environment because there are costs associated with making the change.”
Windows vista: Picking the right version for you

The full range of features will be available to everyone; it depends on the version of Vista that an organisation chooses to buy. For businesses Microsoft has supplied three editions — Vista Business, Vista Enterprise and Vista Ultimate — although some small and medium-sized businesses (SMBs) may opt for a consumer edition such as Home Basic or Premium when they are released in January.

Home Basic is similar to the current Windows XP Home Edition and offers the new security and search capabilities, but does not include media support or the “glass” graphics that are part of Aero’s user interface. Home Premium is a higher-end option for consumers, which adds support for Aero, as well as Media Centre and Tablet PC features.

Vista Business, which is similar to XP Professional, includes the security improvement, new search and organisation functions, virtual collaboration, and user account control, but for features like Bitlocker encryption, single-image rollout, built-in support for Unix applications and virtual machine capabilities organisations will have to go for the enterprise edition. Businesses need to sign a volume licensing deal to qualify for Vista Enterprise.

Bitlocker is also present in the firm’s Vista Ultimate, which blends all the features of Business and Home Premium into one package aimed at users who use the same PC at work as they do at home.

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