RSSCan Vista Be Credited With Microsoft's Stellar Q1 Gains?
By Scott M. Fulton, III | Published October 26, 2007, 4:00 PM
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How much will the eventual release of Vista Service Pack 1 help consumers' and businesses' adoption of the operating system, given the fact that Microsoft's existing annuity customers have, in effect, already signed onto it? Would that 75% premium number CFO Chris Liddell cited, for instance, be boosted to closer to 85%? After an analyst pressed Liddell on this point, he conceded the growth would really not be much.
"We believe we can continue to drive that at over 70%, but it's too early to predict anything higher than that," said Liddell. "[SP1] might help, but those rates - 70% - are very high," he said, "so it might assist but it may simply just help us continue at that sort of rate. We're not picking a particular pickup as a result of that alone."
The underlying message is this: The adoption rate of Vista isn't high because customers want it so much as they expect it. Fewer OEMs are purchasing the lesser-valued product in the mix, and more and more of the remaining customers have paid in advance for Vista and its subsequent upgrades.
"You have to realize that the structure of our business really has matured significantly to one that's driven much more around multi-year expectations," Liddell explained to a Bank of America analyst. "To the extent we're seeing strength in annuity agreements now, it's in anticipation of those products. The fact those products launch won't in itself drive an enormous amount of accounting activity; we'll see that over a slow burn. It's the same phenomenon we talked about with Vista; these things will happen over time as people adapt and adopt the particular systems, but from a revenue and economic point of view, our relationship with our customers, our ability to continue to sign them up and drive growth is much more of a multi-period rather than a single event-based phenomenon. And we just think a continuation of very strong products rolling out continuously, quarter after quarter, year after year, is the best way of driving that business."
Taken to its ultimate conclusion, this strategy could have a transformational impact on the way Microsoft has typically done business. In the Business Division, whose revenue from annuities is much higher than for the Client Division, and where the Office suite is the crown jewel, we're already seeing a transformation of the product from a virtual box full of parts like Word and Excel and PowerPoint, to a subscription service whose buildouts and even whose software sources (physical media vs. online) are tailored to fit individual customers.
That transformation is obviously driven by annuity customers, whose expectations for the products to which they subscribe are more regular, more predictable, more cyclical, and in a way less contingent upon periodic overhauls. So while the "Office 13" project has reportedly already been triggered inside the company, the ratio of the need for a next big overhaul versus the need for periodic upgrades has shifted toward the latter.
With more Vista customers moving to annuity agreements and more OEMs demanding that software buildouts be tailored to their own marketing plans rather than having to adjust their plans to suit Microsoft's -- a situation which blew up in computer vendors' faces after the March 2006 Vista delay -- Windows could conceivably become more and more commoditized, based more on the business model of the energy industry than the automotive industry.
The upside of that transition could be this: Whether customers embrace Vista or Vista SP1 or whatever comes next won't be nearly as important to Microsoft as whether they purchase it. They won't have to like it; they might not even have to want it. As long as they subscribe to it, they'll need it, and need it now.
If Microsoft truly does complete its transformation to this business model, it may no longer be possible to think of it as the behemoth served by the helpless minions who pay penance to it by buying its boxes from the shelves. To borrow a phrase uttered by one of the more famous part-time Borg drones, Microsoft would adapt to service us.
For more: Can Microsoft Make Vista More Compelling?
Dont make me laugh MS and try to spin it (even in the slightest) to say that Vista had any positive effect. Vista sucks, anyone with a brain knows it. Every singe company that we consult for requested that Vista be uninstalled and reverted back to XP. Thats thousands and thousands of pissed off customers. Dont worry MS, your Xbox division is now your best division. Its saving your asses big time.
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|Really dude...you need to keep your mouth shut on issues you know little about.
I'm going to attempt to believe you are not intentionally lying for now, but it sounds like you haven't spoken to anyone outside of 'your box' of friends regarding Vista. I've used Vista since the Beta--admittedly only using it daily starting around March of this year, but Vista is not nearly the apocalyptic nightmare that you make it out to be. It initially was plagued with third-party incompatibilities and even a couple of internal problems, but it has worked quite well on my box.
Despite a few issues here and there, it has had quite a positive effect on me, so please quit lying and speaking for people in which you do not know.
Every singe company that we consult for requested that Vista be uninstalled and reverted back to XP.
Where did you read that? The IHateMicrosoft.com Times? You can hate Vista all you want but please try not to present opinion as fact.
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|I think that the sales reported pertain to stores and resellers buying the software for their shelves or inclusions on their product/computers.
If there are 10,000 stores that order and buy (at cost) 100 copies of Vista, then MS can report sales of 1 million. But this doesn't mean that 1 million shoppers stormed the stores and trampled each other to buy it.
This fallacy also applies to books and record/cd sales.
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|The only reason Vista is making money is that it has high copy protection that stops the pirates from stealing their drm. This way they have to buy vista and their money goes up.
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|Hey, extremely weii (2 capital i's in the end), my beloved brotha' -- I've already stated that fact in somewhat more eloquent words that sooth the ear:
"Microsoft's "Stellar Q1 Gains" is probably mainly due to increased anti-piracy pressure by Microsoft, worldwide. I know of dozens of would-be-and-have-been Windows pirates in foreign countries that have BOUGHT a Microsoft OS for the first time in their life with a new PC... Why? Cuz they HAD TO. In most European and Asian countries you don't get an OS pre-installed on most purchases..."
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|Vista runs nice on my old machine (Pentium 4 2.8Ghz; 1GB RAM; ATI 9600 256Mb). It's a great OS.
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|'nice' is rather subjective. I think it runs like crap on my system (C2D @ 3.6Ghz, 2GB RAM, 7950GT 512MB). It's a s*** OS.
'crap' is rather subjective too. But I can say quantitatively that it's worse than XP for performance. Much, much worse. And (IMO) offers nothing for the trade-off. If anything, the UI is even more annoying.
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|And XP performs worse than 2000.
We all know this. Can we stop whining about it?
Please?
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|Fail. Turn off the themes service and a few other things and XP can easily be trimmed down to 2000 level performance. The same can't be said for Vista, not even close. Of course new OSs are usually more demanding than older ones, but they usually add something worthwhile which outweighs this issue. Vista adds next to nothing.
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|You can do the same with Vista. Don't think so? Google vlite.
You do realize it took folks a while with XP to figure these things out. (Running TinyXP at home right now, they've only been around for a year or two at most)
"Vista adds next to nothing."
I bet you are one of those folks who think the only new feature of Vista is eye-candy, right?
Still it has very little to do with the OP, so why bring it up? Couldn't find anything else to argue about? ;) (Not that we don't like arguing in this forum...)
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|I just bought 2 Acer quad cores with XP Pro and am selling a CyberPower with Vista Ultimate. Names have never cut any ice with me. I figure 7 will be released in 2 years.
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|What?
What was the point of telling us that?
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|I just saved a bunch of money on my insurance by switching to Geico
/obscure?
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|Eventually Vista may not even reach 50% marketshare, before it is replaced as the newest version by Windows 7. XP reached 80%+ because of 5 years.
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|The profit increases come from shoving a greater number of OEM units down makers throats. Does anyone NOT understand that the greatest cost to MS comes from the BOX and printed material and not the product itself? Companies like Toshiba contract for its restore disk from another party and stores it themselves. So how much did it cost MS to create, warehouse and ship 1 master disk as compared to several million boxed units? When they get the leased software model up and running their profits will soar! Sure piles of guys will be out of work but big MS shareholder's will need servants.
As for how great it is, I've upgraded 20+ books to working status with XP. Having to get new code written because Vista can't run your companies software... yeah there's a step forward. Good thing employees go without salary when their productivity drops like a rock buggering around with a gimpy book.
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|Microsoft's "Stellar Q1 Gains" is probably mainly due to increased anti-piracy pressure by Microsoft, worldwide. I know of dozens of would-be-and-have-been Windows pirates in foreign countries that have BOUGHT a Microsoft OS for the first time in their life with a new PC... Why? Cuz they HAD TO. In most European and Asian countries you don't get an OS pre-installed on most purchases...
Anyway, Vista is impossible to steal for 99% of the folks out there...
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|99%? you don't know very many people lol
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|He doesn't know much of anything, just pretends to.
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|Vista is a great O/S, quit trying to run it on POS computers. You need 2 GB of RAM to run Vista. I have had no problems and by far faster than my 2.8 Ghz running XP even with a brand new restore.
Buy a computer pre-designed for Vista, don't upgrade from XP, you will be sorry.
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|Hol, you must only do occasional news-reading & email checking...rotflmao.
Most of my professional office, investing & database apps run way faster on XP & older systems than on the newest screaming-edge systems with 4gb ram, etc.
Even the few apps like Photoshop, that are constantly being re-tooled to take advantage of the latest in OS & hardware, have to deal with Vista's bloat, rushed coding & poor memory management / leaking.
I'm VERY pessimistic that other / mainstream apps ANYTIME SOON will be able to fully take advantage of the latest in OS & Hardware, what with having to deal w/ Vista, 64bit, the next file system & OS[Vista is just a temporary stepping stone], etc. while having to maintain backward compatibility... I really feel sorry for someone like Adobe-- that has to write code for Mac(both older & newer OS), Linux(and so many variants), Windows in all its glorious versions... all of them in both 32 & 64bit... having to be able to run in legacy hardware while keeping in mind ever-increasing cores/processors/ram per system.
Even if we were to agree, for the sake of argument, that Vista was the greatest thing since sliced bread-- so good in fact, that it wouldn't need to be updated for another decade(disregard for now all that was left out of it to either be added subsequently or released standalone)-- it would need normal re-tooling / fixing:
there hasn't been a single Windows version ready for production / mission-critical upon initial release... that does not apply until a subsequent Rel., Ed., or SP... for practical purposes AT LEAST one year afterwards.
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|what's funny out an MS troll like you, is that you probably have no experience in pc repair. I've run vista on 2gbs of ram and it was slow. the RC1 version worked better then the retail copy. Most of the pcs that are 'pre-designed for vista' can't really run vista. the first two editions of vista (home basic and premiere) offer next to no (or none at all) improvements or 'features' over MCE. On top of that probably 80% of the people who read/post here build their own pcs (cept you maybe) and are capable of upgrading their pcs to run vista if they so choose.
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|Even the name suggest its bad. Vista? Sounds exactly like my XP on a bad day. Its vistarific!
I'd imagine that the day i have to install Vista is the day one or more programs doesnt run on XP, i hope it never comes. Sad truth is that it will... *tear*
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|I hate Vista. We have a few corporate PCs (four to be exact) deployed with Windows Vista and all those PCs are very very sluggish.
I want to say it again: with 1GB (!) of RAM they are slow as hell. All necessary drivers are installed and almost no background applications are running except Windows own services and applications.
It's unbearable. We're thinking about downgrading to Windows XP.
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|I'm betting those are new systems-- force-fed Vista in other words... otherwise, it's just sheer madness to use a new Windows OS in a corporate environment.
The only reason i'd've gotten it is to try 64bit-- in fact, I wouldn't/won't upgrade from XP until a robust 64bit Windows is ready.
You were also kinda hoodwinked with only 1gb ram(memory is SOOO cheap nowadays: http://salescircular.com/ny/computer/memorp.shtml )for Vista, which is SO bloated-- just try running a simple app like CoolKill-- you'll see how much more stuff is running on Vista vs XP. To safely slim down Vista, I'd suggest:
1. Google TweakHound, BlackViper, vLite... btw they each have differences & complement each other.
2. Best solution, IF you have a copy of win2K lying around: it can installed with no serial, then quickly updated in one shot with: Autopatcher 2000 and/or Unofficial Windows 2000 SP5... or better, slipstream the install disc: http://www.vorck.com/2ksp5.html
A. You've already paid for an OS- unsuitable to your needs... why go out and spend money twice.
B. Very, very likely there's nothing you can't do on 2k vs XP... and it WILL run MUCH faster than any/all subsequent Win versions.
PS One other $0 alternative IIFFF you have a complete Vista install disc... Enterprise or Ultimate: try uninstalling & substituting Vista 64bit in one test machine(EULA mandates either or can be installed at any one time, not both simultaneously; same license key btw)-- it may work better than its 32 bit cousin. It will require more memory though-- i wouldn't run vista 64 with only 2gb-- the max the mobo will take... but you need / can always use extra memory; i would NEVER skimp on it... esp. since it's so cheap(hopefully that holds true where you are).
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|Huh? I just bought two laptops and a PC from Dell. All but one laptop had XP on it. Dell is the only vendor that is still selling XP. They were to cease offering Vista Jan. 31 but MS gave them an extension till June '08.
The one laptop I bought with Vista was a Vostro 1400 and there was no option for XP.
Vista is a exercise in annoyance. Example: it takes two mouse clicks to set the clock in XP as opposed to six in Vista. It's like that with everything.
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|Wow, it's beginning to sound like Linux.
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|You do realize that MS counts all the OEMs that companies purchased as an already sold OS in their eyes. A unit sold does not an installation make. So thats part of the reason they still consider Vista a success. there are thousands of OEM left uninstalled on many peoples machines, or sitting on a factory shelf that MS counts as a sold unit.
How many thousands of users are taking advantage of the Vista downgrade rights? LOTS... Especially businesses. Cause there are just not enough Business programs that will work on Vista yet. Except for MS products of course, but even some of those (Great Plains) can not be installed on Vista without significant upgrades that often cost a company thousands to get tailored to their needs. And if they do that the company needs to commit to a Company wide computer upgrade to Vista. Ouch again...
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|Great Plains is horrid. any business that uses that crap deserves bankruptcy.
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|Secretly I agree with you 100% ... but Thats a good part of business infrastructure where I work so I have to deal with it. lol
I also deal with mas200, and master builder, and crystal reports... any guess why I am not a fan of Vista now? lol
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|lol @ crystal reports. im an as400 mapics man myself.
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|MAS90 isn't any better... nor was Cisco's VPN client for quite some time. :(
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|vista is a really great product, so yes I can definately see it boosting profits. its a very refined os. Im always perplexed by people that prefer XP. I suppose for gaming you could still cling to xp for now though.
Vista X64 is the greates os ever.
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|What color are the skies on your planet? They're blue here on Earth.
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|Is there a noticeable difference between x86 and x64? I have been avoiding the x64 version because the software support just doesn't seem to be there yet.
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|i notice a speed increase when using something like a 64 bit version of 7-Zip. 64 bit has come a long way from the starting days of XP Pro x64. There is drivers for everything now, and most well coded software will run on it.
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|:) teehee so funny, you are like the internets version of robin williams.
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|You think Vista is better than OS X? Obviously you haven't tried it.
Ubuntu is starting to become an option too. Microsoft better shape up!
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|Here is pretty good run down of x64:
http://www.winsupersite....se/winvista_1yr_x64.asp
Speaking for myself, I installed x64 off the bat and haven't had any issues but I don't have any really old hardware/software kicking around.
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|Microsoft is going to buy Apple and Linux, face it. You will be using Vista on your quad cores and you will like it. I know that's hard to hear because I make so much sense.
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|there is still software that doesn't work with x64. Maxtor one touch software for instance.
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|There will be no Office 13, code name Office 14.
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|Hell, no...
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|That was such a well thought out, insightful and helpful opinion on the matter that I just had to comment on how much it helps further the discussion.
You sir, should be modded up for your generous contribution to this topic.
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|Says you....
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|Says anyone... you came on here just to troll offering no insight whatsoever
If you don't like the OS don't use it, why waste breath on something you don't like?
I don't get the internet....
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|Talk to the hand...
BTW, "Don't get the internet"? You sound like the guy who wanted to try the internet out at home so he asked the tech to put it on a floppy for him. [smiles]
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|I was being facetious hence the dots afterward...
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|"talk to the hand"? you sound like the 4 year old who asked the tech to put his brain on a floppy for him
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