Introduction
>>
Sumi Das: Hello I'm Sumi Das for ZDNet. Microsoft's new operating system, Windows 7, rolls out on October 22. The much anticipated OS will sport a new graphical user interface, more reliable power management tools, and better search, among other features. But will it be enough to get businesses and consumers to upgrade? With me to talk about Windows 7 is Larry Dignan, ZDNet's editor in chief, and Ed Bott a ZDNet blogger who writes the Microsoft report. Gentlemen, thank you for joining me.
>>
Larry Dignan and Ed Bott: Good to be here.
>>
Sumi Das: So Microsoft's general manager, Charles Songhurst, recently said in an invester conference that he couldn't be more bullish about Windows 7's prospects; not surprising. But he has said that "it's a compellingly good product and it's led to renewed belief in innovation in the Windows 7 franchise". How important of a release, Ed, is this for Microsoft? I mean, it's a fairly significant upgrade.
>>
Ed Bott: It's huge. In fact it's a... you could call it a bet the company release. Microsoft needs the revenue of course, and there's a lot of revenue that comes from Windows, it's the cash cow. But they also need to get their respect back. I don't think it's possible to overstate what an impact the debacle of the Vista launch had on Microsoft's reputation. So what they need to establish now is they can deliver software on time, of high quality, and that delivers benefits to their customers. Now the good news is that they've been delivering a series of milestones for the past year or so, Beta's release candidates and now the release code; and consumers and corporations have been running that code and so far the buzz has been very, very good. A lot of good feedback on Windows 7.
>>
Sumi Das: So they're betting the farm then?
>>
Ed Bott: Betting the farm
>>
Sumi Das: Larry, in many respects Windows Vista was forced upon IT managers, and as Ed just said, Vista was a low point for Microsoft. Businesses didn't care for it. So given that the economy is just starting to recover, are we going to see businesses upgrading?
>>
Larry Dignan: It's really a total wildcard right now. Michael Dell, who's not exactly an impartial observer, has... he's betting on a 2010 upgrade cycle.
>>
Sumi Das: He's also invested.
>>
Larry Dignan: Very invested. But the whole rationale is that the older PC's, it's just going to be harder to maintain and it's going to be more costly to support them. So companies are going to look at this, they're going to look at Windows 7 features, and basically say, we'll upgrade because it will save us money. That's the case, but it's a total wildcard.
>>
Sumi Das: Right, that seems logical but most people prefer to pay small sums of money versus a large lump sum up front.
>>
Larry Dignan: Yeah, and it's going to be company specific. Some companies are going to try to get a few more years out of their PC's, others might make the jump, but it's going to be hit or miss.
>>
Sumi Das: Now Ed, I know that you've been running the release code of Windows 7, correct?
>>
Ed Bott: Right.
>>
Sumi Das: So what is it about Windows 7? Tell us about the features that are going to convince IT managers that they need to upgrade.
>>
Ed Bott: Well one of the big benefits for corporate customers is all these companies that in the last 2 years bought machines that were perfectly capable of running Windows 7, but then downgraded them to XP. It's very simple upgrade cycle for them, and they get some pretty significant benefits out of them. They get better manageability. There was a feature that was available in Windows Vista, but chose not to take advantage of it, but it's there now. An employee's laptop gets compromised by a virus, you can reinstall Windows 7 in a matter of 20 minutes and they're back up and running. And then there's one wildcard that Microsoft has been talking a lot about lately. They released some studies, now admittedly these come from Microsoft so let's take them with a large grain of salt, but they've been talking about the power savings that companies can get from deploying Windows 7. The Windows 7 PC uses less power, and saves energy compared to Windows XP. So in some cases Microsoft has made the argument that a company can earn back the cost of the upgrade in a year or 2, just from power savings alone.
>>
Sumi Das: Appealing to the greener minds out there?
>>
Ed Bott: Yep. Microsoft's going green.
>>
Sumi Das: OK. Alright let's talk about consumers now. Apple's done a remarkable job. Their I'm a PC, I'm a Mac campaign has been really wildly popular. They've done a... yeah, they've done a good job marketing the consumers. Microsoft hasn't had as much luck. I would say that the Bill Gates-Seinfeld ad campaign was a flop. I think that's fair to say right?
>>
Ed Bott: Disaster.
>>
Sumi Das: OK. I like the Microsoft Bing ads, I will say that, but I'm just wondering have they lost their mojo when it comes to appealing to consumers?
>>
Ed Bott: Well, like businesses, Microsoft has to get some consumer credibility. They have Apple envy, they're kind of blatant about it.
>>
Sumi Das: Yeah, it's apparent.
>>
Ed Bott: Yeah, the consumer can see through it. And Microsoft has to get some of that cool factor back with consumers, and that's why they're targeting the consumers pretty much first before the businesses; because they're trying to get the word of mouth, they're trying to get their message out there, and if they can get some consumer buy in then maybe it makes it easier to get the corporate upgrades.
>>
Sumi Das: Hoping those consumers will go to their IT managers at work and say, look I'm using it at home, it's working...
>>
Ed Bott: It's the iPhone formula.
>>
Sumi Das: OK.
>>
Larry Dignan: Well cool is great, but cool comes with a price tag. And the last time I looked, the average Mac cost just a few bucks shy of 1,500 dollars, and the average PC costs well under 1,000 dollars. So when consumers walk into the stores, they may want to be cool but they see those 2 pricetags side by side, it's going to be hard to resist the one that's half what the other one is; especially in this economy.
>>
Sumi Das: That's right. Ed, Larry, thank you so much for being with me today.
>>
Ed Bott and Larry Dignan: Thanks for having us.
>>
Sumi Das: For more information on Windows 7, you can go to Blogs.zdnet.com. I'm Sumi Das, thanks for watching.
==== Transcribed by Automatic Sync Technologies ====
