[QUOTE=Voyager]
GomiBoy, I don’t understand what you mean by “normal upgrade window.” Do businesses upgrade at a certain time of year? Or do you mean that a business upgrading to a machine capable of running Vista before it came out won’t bother to upgrade the OS, though they would have bought Vista if it came with the machine?
[/QUOTE]
Quick caveat - I am mostly talking about large (500+ seat) businesses below, so YMMV for small / medium business owners.
Businesses have a financial year, which may (or often does not) align with either the tax or calendar year. For instance, my company now runs a financial year that ends in December, whilst Microsoft’s FY ends in June- those are the two most common, although some run FYs that end in April. Budgets are usually assigned at the end of the previous financial year and that’s it for the next year. Add to this - many businesses don’t like to upgrade their PCs - it’s expensive and adds risk to their existing builds and costs lots of man-hours and time to get it done, not least testing that things work before and after. They’d rather just buy PCs with new build images on them and deploy the hardware and the new software at the same time - easier all around, and users get new shiny kit to play with that offsets their pain of upgrading to a new OS. And most manufacturers will create a ‘business’ OS image to the specification of large businesses and deploy say 10k PCs with that image.
When Microsoft released late, lots and lots of businesses that run Jan - Dec financial years were not going to upgrade until the next year, meaning 6 months (after the June release date) before they’d even start to consider upgrades; their upgrade budget line items were already allocated, and they were not going to go back to their financial people and ask for more money. The companies budgets who start in June didn’t have enough time or enough certainty it was going out the door - it slipped once already, right? So maybe it would slip again. So that meant those companies were delayed 12 months before they would consider upgrading. Also, there is always a gap between when MS releases something and when the HW manufacturers catch up with drivers and build images; they don’t install each machine individually, they just create a single image for a given model and then blast it onto the HD using imaging software. Sometimes this gap is up to 3 months; this means that there is additional delay in getting new machines with Vista out and into circulation; even more if it’s a custom build for an enterprise.
There’s also a hardware life cycle to consider. Lots of large (“Enterprise” to MS consulting / sales orgs) businesses buy PCs with the expectation of running them for 3 years and then chucking them out and getting new ones; when the new ones are deployed is usually when they try to add in any updates or new software. This cycle meant that a lot of businesses bought new PCs for XP, which was about 3 years before Vista was due to be released. By missing the window, lots of companies who were due to upgrade from their XP machines re-purchased XP machines, meaning it’s now 3 more years before they’ll consider an upgrade to their existing PCs.
So slipping a product like this is a BIG deal for Microsoft, or anyone else in the OS game. It was a huge issue with uptake, and while Enterprise / Business users are rarely the leading / bleeding edge, their upgrades represent a huge percentage of Microsoft’s bottom line. An Enterprise customer like say Shell Oil may have 150k desktop PCs and 25k Laptops; getting them all upgraded to Vista would be a huge $ win, as well as a massive PR coup for MS. Waiting to upgrade means effectively that MS has lost out on a huge market and a huge revenue opportunity at the same time as spending loads of money on Product development.
ralph124c- I think it’s pretty efficient in that the profit margin for software development is excellent - it cost little to make software (other than staff, R&D, and some kit to develop on) but you can charge as much as the market will bear. And while some divisions are not as profitable (Xbox, Live) the ones that are (Office, Windows) are so profitable they can absorb the losses from others without any wobbles in the stock price. Most analysts still classify Microsoft as a strong buy and hold option; it’s just that rather than a rocket ship of profitability it was 10 years ago, it’s a steady earner (YOY stock price growth something like 7%) and a ‘safe’ bet even if it’s not nearly as sexy a bet as it was 10 or 12 years ago. Better than your average savings account, but only just. 