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December 16, 2005

Windows Vista Toughest '06 Test For Microsoft

Courtesy of TechWeb News

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Microsoft's biggest challenge in 2006 will be convincing corporations that they should upgrade to Windows Vista when it rolls out late in the year, a research firm said Friday.

Directions on Microsoft, a Kirkland, Wash.-based company that tracks the developer's moves, put the Vista challenge at the top of its annual list.

Although demos of the still-in-the-works operating system boast cool graphics effects and consumer features, it's enterprises that Microsoft must persuade. "Windows is Microsoft's biggest business unit, and Vista is it's biggest challenge," said Rob Helm, director of research at Directions. "Frankly, I think it's going to be very difficult for Microsoft to make its case to corporations."

January and February of 2006 will be the months to watch, said Helm, since that's when Microsoft will lock down the feature set for Vista. "Then they can try to tell corporations why they need it."

He's not optimistic because of the years-long trend of shrinking deferred revenues received from long-term licensing programs, such as Software Assurance, which gives customers the right to all upgrades during a two- or three-year span. Lower revenues there means that fewer companies are buying into Software Assurance, perhaps because they're balking at upgrading operating systems.

"The Windows Client division has to tell corporate customers why they want Windows Vista, and why they shouldn't wait until they buy new hardware," said Helm.

Among the remaining challenges in Directions' Top 10 list, Helm singled out the newest refresh of an online strategy as least likely to show major results in 2006, and the Redmond, Wash.-based giant's new game console, the Xbox 360, as most likely to meet its challenge during the year.

"Microsoft's in a bit of disarray," said Helm when talking about the company's online strategy. "They're trying to focus on Google, and come up with things to take away from Google. I don't think we'll see any huge concrete results here in 2006."

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