December 4th, 2006

Can 'cubicle envy' help the Vista upgrade cycle?

Posted by Larry Dignan @ 9:05 am

Categories: General, Microsoft, Software Infrastructure

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While Microsoft tries to convince enterprises to upgrade to Vista with presentations about total cost of ownership, the real trigger for an upgrade cycle may come from employees a few rungs below the CIO.

That's a major takeaway of a research note from Cowen & Co. examining the health of the tech sector in 2007. Cowen's analysts–Arnie Berman and Greg Niss, conclude that the technology sector has some significant hurdles in the first half of 2007–notably a slowing economy. To buck that trend the Vista upgrade cycle–a key factor in 2007 technology spending–needs to kick in sooner rather than later. And it may be influenced by employee demand.

"Despite CIO indifference/resistance, we believe the corporate adoption of Vista will eventually be aided by positive word of mouth among employees. There was no 'wow factor' associated with the release of Windows 98, NT 4.0, or XP. By contrast, we think Vista Aero graphics and file finding capabilities look so cool that it will create 'cubicle envy.' But any viral impact created by positive word-of-mouth will likely take many months to develop."

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Bottom line: No CIO is going to upgrade until Microsoft delivers its first service pack in the second half of 2007. But Cowen's analysts may be on to something assuming Vista Aero graphics create enough of a wow factor. Vista isn't going to deliver huge productivity gains for corporate America, but "it will make your machine look cool," writes Cowen. In other words, cubicle envy could get Vista out of the gate strong in the second half of 2007.

Could Cowen's cubicle envy thesis stick? It's possible. After all, consumer electronics are increasingly influencing corporate technology departments. Who would think that the technology sector's health could be riding on nice graphics?