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Issue Date: March 2008

AnalystWatch: The not-so-wonderful Vista

March 2008
Michael Thompson, Butler Group analyst

The announcement that Microsoft is to reduce the price on the retail boxed copies of several consumer versions of Windows Vista is a clear indication (despite claims to the contrary) that Vista has not had the expected uptake in the home market.

As with all things from Windows desktop, the business market tends to reflect the home market, so one could extrapolate that the business uptake is similarly disappointing. While Microsoft is keen to point out that retail sales is only a small part of their total Windows-based revenue, there has always been a correlation between home and business users.
Although the price-reduction announcement was modified by a number of marketing statements, 'elasticity of demand' being the most humorous, it is clear that everything is not as it should be (or as Microsoft would like it to be).
The business demand for desktops has been driven in the past by home users who want a familiar look and feel at work, which means reduced training costs for companies. If the home market is not migrating to Vista, then it will be unlikely that business will be keen to force the issue from their end.
The price reduction is due to take effect when the Service Pack 1 (SP1) version of Vista hits the shelves. The General Availability of SP1 has been delayed until mid-March due to reported incompatibility problems, most notably driver support issues for which Microsoft blames the hardware manufacturers.
Likewise, two major cracks in Vista: the OEM BIOS and 2099 Grace Time exploits, were supposed to be fixed in SP1, but this has only been partly successful. A success that has been marred by the fact that SP1 has also created some problems with genuine applications, which is marketing speak for some applications just will not run.
This is almost back to the bad old days of Microsoft. Prior to Windows 2000, stories like this appeared on a regular basis. It seems that the brave new world of Vista is creating problems that are reminiscent of Windows 98 (prior to SE).
It would appear that Microsoft is getting hit on two fronts: poor uptake, and issues with the O/S itself. When Vista first appeared, there was some question as to the additional functionality (over XP) that it contained for the business user. Concerns over incompatibility and application functionality will provide further resistance to the uptake of Vista, and it might have to be at the SP2 stage that organisations start to give serious consideration to their upgrade path.
If these issues are not sorted out quickly, then there is a danger that Vista might become the latest version of Windows ME.
Source: Computergram

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