Windows 7 needs to overcome tight IT budgets

Analyst says the launch of the new operating system comes at a time when the sluggish economy could overshadow its release
Written by Ina Fried, Contributor

There are a number of reasons why Windows 7 should appeal to businesses, but one threat — the still-sluggish economy — could overshadow all of those reasons to move to the new operating system, according to an industry analyst.

"I think they have a really good product at a really bad time," Directions on Microsoft analyst Michael Cherry said in a telephone interview this week.

While Cherry said there is definitely a lot to like about Windows 7, the release comes at a time when IT budgets are shrinking. Companies are trying to limit new technology projects, even ones as badly needed as updating aging stables of desktop and notebook PCs, he noted.

"Even if they like it, I don't know how fast it is going to go, when it is ranked against all the things IT has to do against a shrinking budget," Cherry said.

Among the things that should appeal to businesses about Windows 7, Cherry said, are its improved compatibility and performance, Windows XP mode and a DirectAccess feature that allows for automatic virtual private network-like connections to a corporate network any time a PC is connected to the internet.

Windows 7 goes on sale to consumers and small businesses on 22 October. Large businesses with volume licensing deals can get earlier access, although most will wait before putting it on anything other than test machines. Gartner analyst Michael Silver said, as with other releases, most businesses will take a year or 18 months before starting to deploy the new operating system. However, he added: "We've had a surprising number of calls with organisations — some very large — planning to move fairly early."

As businesses are showing little appetite for widespread spending to upgrade old machines, Cherry said many may just upgrade to Windows 7 as they buy new machines. "I'm not sure that isn't going to be the majority way that this is handled," Cherry said, pointing out that it would still be an improvement from Vista, which most companies wiped off new PCs, installing Windows XP in its stead.

One quibble Cherry has is with the way Microsoft bills Windows 7 as a major upgrade, even though so little has changed under the hood. "I think it confuses major with important," Cherry said. "It's an important update. It's one you want to take advantage of."

Windows 7, Cherry said, is noteworthy simply because it addresses many of Vista's shortcomings and makes the key improvements that Vista brought now accessible and attractive to businesses.

In many ways, he considers Windows 7 to be the 'R2' release of Vista, borrowing the nomenclature Microsoft uses to describe updates to its server products. That's not a bad thing, he said, noting that server customers have rather liked the way Microsoft alternates between minor and major releases.

"R2 has been a very solid approach for (Windows Server)," Cherry said, "and people know what they are getting."

As an indication of just how close Windows 7 is to the border between minor and major, the server version that was developed simultaneously is being designated as Windows Server 2008 R2 — a minor upgrade.

Cherry said perhaps Microsoft should just embrace Windows 7's "minorness".

"You really don't want two major releases in a row," he said, arguing that the main architectural changes made with Vista are akin to pouring new concrete. "It needs time to cure. It needs time to settle in. It doesn't mean that, as an interim release, Windows 7 isn't important."

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