Intel stays behind the curve ... again

Intel’s decision to continue using Windows XP instead of migrating to Windows Vista is being spun as a stunning rebuke to Microsoft and a rejection of Windows Vista. Except that there’s nothing new here. The same thing happened in 2002, when Windows XP was shiny and new. Corporations like Intel are always slow to roll out new Windows versions. Add in a slowing economy and a new Windows version due to arrive next year and you have all the ingredients an IT department needs to skip a version. So why is this a surprise to anyone?
Written by Ed Bott, Senior Contributing Editor

The Inquirer is making a big fuss over Intel’s decision to continue using Windows XP instead of migrating to Windows Vista. A stunning rebuke, obviously, leading to a rousing chorus of “I told you so.”

Except that there’s nothing new here. The same thing happened in 2002, when Windows XP was shiny and new. What, you don’t remember? Why, I read it in the Inquirer, on January 10, 2002:

Windows XP might be the "best OS Microsoft ever produced" but it's [sic] long time partner Intel thinks that ain't necessarily so.

The corporation, which has around 80,000 employees, is rolling out Windows 2K rather than the latest greatest OS from Microsoft.

The decision was taken last year and Intel will spend much of this year standardising on W2K in every site and country in the world.

By the end of 2002, Windows 2000 was three years old, and Intel was just completing its OS rollout, skipping the then-current version. Sound familiar?

Steve Lohr of The New York Times piles on with this observation: 

Large companies routinely hold off a year or so after a new version of Windows is introduced before adopting it, waiting for initial bugs to be eliminated and for applications to be written. “But by 18 months, you’d expect to see a significant uptake, and we haven’t seen that,” said David Smith, a Gartner analyst. “There’s not much excitement.”

I don’t know what they’re putting in the brownies at Gartner these days, but by 18 months, most large organizations are just beginning to complete their evaluations of how their internal applications run on a new operating system family. Only a tiny percentage of enterprises do “forklift upgrades,” where every corporate PC is upgraded to a new OS in a short time. Not much excitement? Corporations don't look for excitement in their IT investments. They look for stability and compatibility and, especially in the current economy, low costs.

I wrote about all this about six months ago (“Windows adoption rates: a history lesson”), and nothing has changed since then. Back in 2001, when Microsoft released Windows XP, Gartner correctly predicted that large businesses would shun both Windows 2000 and XP, with 75 percent sticking with Windows 95, 98, and NT4 at the end of 2002. What was XP’s market share one year after its release? Try “less than 10 percent.” How long was it before XP hit the 50% mark in terms of market share? The correct answer is “four years.”

Meanwhile, the real problem with any comparison between adoption rates of Windows XP and Windows Vista is the decision that Microsoft made in 2004 to ship Service Pack 2 as a free update rather than a new OS version. If Jim Allchin had made a different call and released XP SP2 as a separate product, Windows XP might have gone into the record books as a miserable failure, plagued by security problems and shunned by customers. Instead, it got a new lease on life and an unprecedented seven-year release cycle.

It’s unquestionably true that large businesses have resisted Vista. That’s not surprising, given the problems in the initial release and the relentlessly negative press coverage. But an equally important reason for the continued sluggishness in Vista uptake rates is the economy, which has slowed to a crawl. In trying economic times, one way for big corporations like Intel to save money is to stretch the useful life of hardware and software investments. Intel’s decision makers no doubt have a pretty good idea what’s in Windows 7 and when it’s likely to be released. Their decision to skip Vista tells me that the next version of Windows is further along than most outsiders think.

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