Vista's biggest problem remains Windows XP, survey says

Microsoft Corp.'s biggest worry over Windows Vista shouldn't be rival operating systems from Apple Inc. or Red Hat Inc., but remains competition from its own Windows XP, an analyst said today.

"The big story isn't that 32% of the companies we surveyed said that they would start Vista deployments by the end of next year," said Benjamin Gray, an analyst at Forrester Research Inc. "It's that companies have been hugely successful in standardizing on Windows XP."

According to a survey of nearly 600 U.S. and European companies that have more than 1,000 employees, 84% of all their PCs now run Windows XP, up from 67% the year before. While XP may have peaked, Gray warned not to bet against the 6-year-old operating system. "There are plenty of companies looking forward to XP SP3," he said. That next hot-fix and patch rollup is to ship sometime in the first quarter of 2008, Microsoft has said, and it will reportedly be XP's last service pack.

"Vista's biggest competition isn't Apple or Novell or Red Hat; it's Microsoft itself, it's XP," Gray said. So enamored of XP are businesses that Microsoft may feel obligated to extend the operating system's mainstream support past its current April 2009 expiration date. "I wouldn't be surprised," Gray said, although it might require some additional pressure on the company by its largest customers.

Still, XP will eventually get the boot in favor of Vista, Gray said. "Vista isn't a matter of if, but of when and how," he noted.

Nearly a third of the polled businesses -- 32% to be exact -- said they would begin deploying Vista by the end of 2008, while another 17% said they would start in 2009 or 2010. But more than half of all companies remain skittish about Vista, according to Forrester's data. A year after Microsoft released Vista to duplicators, 38% of companies claimed they had no plans at this stage to deploy the operating system. Another 14% said they just didn't know.

Gray also echoed other analysts who last week said Vista plans had been significantly scaled back by most companies. "That's absolutely the case. In May 2006, 40% of the companies we surveyed said they planned on deploying Vista within the first year of its public life," Gray said. "Forty percent were planning on deploying, but by the end of 2007, only 7% will have started. Enterprises are absolutely pulling back from their very, very aggressive deployment plans."

He attributed the lowered expectations to a lack of detailed information about Vista in 2006; too-high prices for PCs with 2GB of memory, which is essentially the minimum needed for Vista, according to company managers; and a larger-than-expected number of incompatible applications.

"Application incompatibility is a big, big headache," Gray said, citing reports from companies preparing for a migration to Vista. Those firms said applications incompatible with Vista made up between 10% and 40% of their software portfolios. "That's causing a lot of XP shops to take a wait-and-see approach to Vista."

But Gray said he was convinced Microsoft will win out in the end, if only because it has virtually no competitor worth the name in the enterprise market. "Linux and Mac have 1% or 2%, and in some cases, such as Europe and the largest corporations, they don't even register," he said. "Microsoft owns this space, and I don't see that changing."