July 24th, 2008

Vista: Whose 'reality' do you believe?

Posted by Mary Jo Foley @ 1:18 pm

Categories: Financial Analyst Meeting, Vista, Windows client

Tags: Microsoft Windows Vista, Microsoft Corp., Forrester Research Inc., Microsoft Windows Vista (Longhorn), Operating Systems, Microsoft Windows, Software, Mary Jo Foley

The same day that Forrester Research is touting yet another of a growing number of studies claiming Vista is failing to gain traction in the enterprise, Microsoft is claiming just the opposite.

In a presentation at Microsoft’s annual Financial Analyst Meeting in Redmond on July 24, company officials outlined their bullish projections and claims for Windows Vista. But it wasn’t the facts and figures that garnered the most attention from attendees here; instead, it was a video of a focus group of Vista skeptics who changed their originally negative opinions of Microsoft’s latest Windows release once they had a chance to see it demonstrated.

Microsoft told the focus group participants that they were seeing a demo of “Mojave,” (why not “Midori”?) an as-yet-unannounced Windows release (which was actually Windows Vista). The participants, a number of whom admitted they had no direct hands-on experience with Vista, said they were jazzed about Mojave and would definitely use it once it was released.

The Mojave demo was used to back Microsoft’s contention that once they had a chance to try Vista for themselves, customers liked the product.

Forrester Research issued new study results today claiming that 18 months after release, “Vista is still struggling to gain a foothold in large companies.” Forrester called Vista the “new Coke.”

Forrester said that Vista use remains in the single digits (”just under nine percent according to Forrester’s month-by-month desk-top analysis of 50,000 of our enterprise clients across 2,300 companies. That’s up from six percent in January of this year, but far short of the 87 percent penetration for Windows XP.”)

Meanwhile, Bill Veghte, Senior Vice President for Online Services and Windows Business Group, told FAM attendees today that Vista’s uptake among business users is solid. He said Vista enterprise sales were up 20 percent and renewal rates for Software Assurance among business users were greater than 80 percent. (Not surprisingly, there were no stats in Veghte’s presentation about what percentage of business users are downgrading to XP, one of their “benefits” under the Software Assurance program.)

The answer to whether Vista is growing among enterprise users is “an emphatic yes,” Veghte said.

Veghte said that the higher end of the mid-market also is beginning to upgrade more rapidly to Vista.

Microsoft identifies the business version of Vista as Vista Enterprise, coupled with the optimized desktop (Microsoft Desktop Optimization Pack, or MDOP). Veghte told FAM attendees that Microsoft is readying a set of new MDOP updates for later this year.

Veghte also emphasized that three quarters of Microsoft’s customers are opting for “premium” versions of Vista, rather than bare-bones, lower-priced ones (like Vista Home Basic.) He told attendees of FAM that Microsoft will be “aggressive” in getting PC makers to attached Genuine Windows (rather than pirated versions of the product) right out of the gate.

“Perception vs. reality — that’s a conversation we need to have with our customers this year,” Veghte said.

Do you agree with Microsoft Vista’s biggest challenge is perception, not performance, at this point? Or do you think Forrester is closer to reality with “Vista is the ‘new Coke’ analogy?