Consumer retail sales of Microsoft Corp.’s newest computer operating system topped those of Vista by 234% on a unit basis within the first few days of its Oct. 22 launch, according to a report released Friday by the market research company NPD Group. The report did not include sales to businesses and large organizations.

News that Windows 7 was outperforming Vista, the previous Windows OS version, in sales was not too surprising. The buzz for Windows 7 was relatively positive and largely void of the savage language that reviewers heaped on Vista when it was launched in January 2007.

This time, Microsoft also attempted to woo reluctant buyers with discounts and specials, such as a 50% discount on a copy of the software when buyers spring for a new PC, or a free upgrade from Vista for those who bought a PC after June 26.

“We definitely saw the results of aggressive pricing,” said Stephen Baker, NPD’s computer software analyst.

Though helpful in pushing volume, the discounts may have crimped Microsoft’s overall revenue from the product. The NPD report was mum on the sales impact on Microsoft’s top line.

It may be too early to say whether the software would help ignite sales of personal computers. With consumers making do with their old computers or opting for ultra-cheap netbooks, average PC prices have dropped around 20% since last year, Baker said.

Although unit sales of Windows 7 software were up in the first days of launch over those of Vista, sales of computers with Windows 7 were down 4% compared with sales of Vista-based computers when Vista launched.

But the comparison is not a fair one, Baker cautioned, because Vista launched in January, when PC sales tend to do better, and Windows 7 launched in October, one of the slowest months for PC sales.

Still, the slow economy may have helped Windows 7 sales in one respect, said Richard Shim, a PC analyst with the technology research company IDC.

“Usually upgrades are not very popular. People have tended to buy new PCs when new operating systems come out,” Shim said.

“Windows 7 seems to be an exception,” he said. “One reason is that it can work well with older computers because it’s designed to be streamlined.”

In other words, instead of spending $500 for a new computer, some consumers are springing the $120 to $220 for Windows 7 upgrades and souping up their old machines.

The computers at Microsoft Stores don’t have the crapware that Windows PCs typically come with, but they still have an assortment of Microsoft and Adobe software. Most controversially, they include Windows Live Essentials and Microsoft Security Essentials.

By Emil Protalinski | Last updated October 28, 2009 8:15 AM CT

The company made a lot of changes in the development of Windows 7 and marketing of Windows 7; now it appears the company is trying to change the software that comes with Windows 7. It's a shame that OEMs are unlikely follow suit.

For all the stories about enterprises holding off on Windows 7 deployments, Windows XP’s dominance in the enterprise is at the beginning of the end, says one industry analyst.

This will not happen overnight, writes Forrester analyst Benjamin Gray in a new research report, but there are enough reasons for IT managers to “shake the status quo, and finally end Windows XP’s corporate reign.”

XP, now an eight-year-old OS, “has delivered the compatibility, security, and reliability that firms had hoped for and to this day remains the desktop standard for most businesses and government agencies,” Gray writes.

Windows 7 Bible: Your Complete Guide to the Next Version of Windows

Indeed, Windows XP still powers almost 80 percent of commercial PCs, according to a survey of 665 IT decision-makers that was part of the Forrester report entitled “Windows 7 Commercial Adoption Outlook.”

Nevertheless, many factors point to XP’s demise.

Two-thirds (66 percent) of the 655 surveyed IT decision-makers from North American and European enterprises and SMBs are planning to migrate to Windows 7 eventually, although most don’t have firm plans yet.

Additionally, the research shows that 51 percent of respondents plan to have Windows 7 as the primary OS on their PCs within 12 months. Forrester also urges that companies should prepare for employee requests for Windows 7 as it becomes more popular with consumers.

Here are five other key factors that Forrester believes will loosen Windows XP’s grip on the enterprise and make way for Windows 7.

Businesses Are Supporting Old Infrastructure

Forrester’s Gray writes that because of the recession, IT managers needed to lower costs by extending the life of existing desktops and laptops. Many also held off on hardware upgrades because they wanted them to coincide with a Windows 7 deployment. For global companies that support thousands of apps, compatibility testing can take up to 18 months. So if they’ve been testing in anticipation of Windows 7′s release, full deployments will conclude by the end of 2010.

Windows XP Support Is Waning

Since April of this year, Windows XP SP2 has been in the extended support stage, which means support is no longer free and only includes security updates and patches. Next July, XP SP3 will enter extended support as well. All support for Windows XP SP2 and SP3 will end in April 2014.

Windows XP Availability Will Get Pinched

The ability to buy Windows XP machines will change after Windows 7 becomes generally available this week, Gray writes. With the release of Windows 7′s first service pack, scheduled to be a year or so after its initial release, OEM licenses bundled with every PC will no longer have downgrade rights to XP.

This means that to deploy Windows XP on a new PC, companies will have to purchase volume license copies of Windows along with the new PCs or use existing, unused Windows volume licenses.

Business Reasons Encourage Upgrade to Windows 7

Forrester has found that the enterprise features in Windows 7 will help companies improve networking and security and ultimately cut costs. Some features that Forrester recommends IT departments prepare for include:

DirectAccess, which lets remote workers connect to corporate networks without the use of a VPN; BranchCache, which speeds up access to networks in remote offices that are away from corporate headquarters; BitLocker To Go, an extension of the BitLocker hard-drive encryption feature introduced in Vista that will now protect removable devices like external hard drives and USB thumb drives; AppLocker, which aims to protect users from running unauthorized software; and federated search, which promises to simplify access to data across local and remote networks.

Improved Client Virtualization Can Accelerate Deployment Plans

Windows 7 ships with Windows Virtual PC and Windows XP Mode, which provide the ability to run apps not yet compatible with Windows 7 in an XP-compatible virtual machine.

Moreover, customers with software assurance agreements can use MDOP (Microsoft Desktop Optimization Pack), a subscription-based suite of apps that includes virtualization technologies allowing IT pros to deploy and manage virtual images, “thus removing the last barriers to deploy Windows 7,” writes Gray.

“I’m Steve Ballmer and I’m a Windows 7 PC,” he announced.

The idea behind the new OS is to make computing “simpler, faster, more responsive,” he said. That was possible thanks to an “intense collaboration” between Microsoft and its partners – 50,000 software, hardware, and peripheral vendors, as well as 8 million beta testers, he said.

“Windows needs to be an incredible opportunity for innovation, for hardware companies [and] software companies, and it needs to be a place that is simple and easy to use and opens up the world of diverse innovation … in a way that is manageable and consumable by billions of people around the world,” Ballmer said.

Ballmer pointed to three key components of the OS: it works in the way you want it to work, it simplifies, and it enables new technologies.
View Slideshow See all (9) slides
More

Users want their PC to fire up quickly, to be responsive, and have a longer battery life, and “I think we’ve accomplished that” with Windows 7, Ballmer said.

“The things that you do all the time need to be simpler,” Ballmer said. “You want to manage the windows on your desktop [and] make that stuff super, super simple.”

New technologies include the OSes multi-touch computing capabilities, he said.

“Frankly, there’s more you can do with this system,” Ballmer said. “Ninety-five times out of 100, if people have a choice, they choose a PC.”

Microsoft announced that next month, Amazon will launch a beta version of the Kindle Reader for Windows 7, which will allow users to peruse books using multi-touch. Scroll through a book with the touch of a finger, and zoom in or out by pinching the screen.

“From the end-user perspective, you get dozens or hundreds of new features – everybody finds their own unique set of features to fall in love with,” he said.

Ballmer was introduced by Kylie, the precocious five-year-old who is the star of Microsoft’s latest ad campaign. “You were late,” she informed him when Ballmer asked if she had enjoyed their meeting yesterday. He blamed airport delays and then presented her with a pink netbook as a consolation prize.

I’m all for technology advancements–a new OS, a slicker smartphone, Tang, whatever. Now Acer’s making an odd-but-interesting bet with its new Aspire 5738DG laptop: a 3D display. Yep, the future is now–watch out for flying DeLoreans!

Before I crack any more jokes, let me explain what goes into Acer’s 3D technology. Ray Sawall, senior manager of product marketing for Acer America, took a few minutes to break it down for me. Forget fancy proprietary names (TriDef 3D screen!), what’s at work here are polarized plastic shades, a 60-Hz polarized display, and software working in tandem to trick the image into seeming three-dimensional.

With 3D movies (like, say, Monsters vs. Aliens), it works. It also does the best it can to represent 2D images in 3D. I haven’t had a chance to test it just yet, but the spokespeople say I need to check out The Lord of the Rings–and I will soon, since I expect to see a review unit any day now.
3D: Must-Have Tech, or Gimmick?

Obviously, the big deal here is what this could mean to gamers. I should know; I’m a card-carrying member. The video game crowd’s been chasing that 3D dragon for ages, with some of the best results coming from real-time strategy titles like Command & Conquer 3. Most recently, Resident Evil 5 is a great example of what 3D can do to make the action jump off the screen.

Or maybe Excel spreadsheets will come alive as you get lost in cells–exciting, I know.

Is 3D too much of a niche gimmick? I’m inclined to think so. 3D seems to be the new rationale to sell movie theater tickets, special-edition Blu-ray discs, and apparently PC hardware.

Even Acer’s Sawall seems to agree: “My gut is that [touch-screen technology] has more traction than 3D. Honestly, I’m not sure if there’s a home for 3D in mobile.”

Still, Sawall says the Aspire 5738DG’s been better received by retailers than expected.
Decent Specs for a Good Price

The Aspire 5738DG, available later this week with Windows 7 Home Premium 64-bit edition, packs decent hardware for the $780 asking price: an Intel Core 2 Duo processor T6600, an ATI Mobility Radeon HD 4570 GPU, 4GB of RAM, and a 320GB 5400-rpm hard drive. Stay tuned and I’ll give you the skinny on how well this machine works when I get my hands on it.

What are your thoughts? Substance, style–or something in-between? Hit the Comment box below or send e-mail to PC World with “ATTN: Laptops (3D? I can barely handle two dimensions)” in the subject line.

Need even more nerdity? Follow PC World Senior Writer Darren Gladstone on Twitter (gizmogladstone) for oddball links, 140-character game reviews, and whatever else comes to mind.

For those of us still waiting for Linux to hit the desktop, this type of packaging may be exactly how the move from Windows starts to pick up steam.

The IBM Client for Smart Work was first launched in South Africa in September and was initially geared toward emerging markets. IBM found that there was strong interest in the U.S. and other markets that had aging PC infrastructure and little desire for continued Windows upgrades.

The U.S. version of the package contains a number of IBM products including word processing and spreadsheets via Lotus Symphony, e-mail via Lotus Notes or LotusLive iNotes, and collaboration tools from LotusLive.com. As with the previously launched initiative, the package runs on Ubuntu Linux.

Bob Sutor, IBM’s vice president of Linux and open source, told me that the target is not a drop-in replacement scenario, but rather something for IT shops that don’t want to be stuck in an endless cycle of upgrading desktop operating systems and applications.

This is an interesting development for multiple reasons:

* IBM and Canonical are teaming up to bring Linux to the desktop, offering what could be considered a next-generation thin-client that relies on cloud services but remains based on an actual operating system rather than just running in a Web browser.
* IBM is targeting Windows installations in the co-opetition model the company excels in–effectively insulating itself regardless of who wins the desktop.
* Canonical is building a channel to deliver solutions rather than depend on individuals and organizations to roll their own.

IBM has been making some interesting moves of late, launching a cloud-based e-mail and collaboration suite to rival Google Apps and now a direct attack on Microsoft’s operating system footprint.

As I noted last week in this space, the thinking among bullish tech investors is that most PC users fall into one of two camps: Vista users, who hate their version of Windows, and XP users, who opted not to buy the dreaded Vista and now make do with an eight-year-old OS. The optimists on the outlook for PC sales think we are on the verge of a major replacement cycle.

Intel (ticker: INTC) CEO Paul Otellini last week told investors on a post-earnings conference call that he wouldn’t argue with forecasts that 2010 could see PC units increase 10% or more. One of his reasons is the idea that the arrival of Microsoft’s (MSFT) Windows 7, combined with whizzy new Nehalem-class processors from Intel, will make the purchase of PCs practically irresistible. Speaking at an event in Santa Clara, Calif., last week, Dell (DELL) CEO Michael Dell said he sees “a very powerful refresh cycle” coming. (I covered Dell’s talk live on my Tech Trader Daily blog, if you want the full scoop on what he said.) In particular, Dell told the crowd that he has been using Win 7 for some time, and that when you combine the new operating system with some of the those nifty new Intel chips, and then add in Office 2010, the pending version of Microsoft’s productivity suite, “you will love your PC again.”

Jeff Bertolucci

Oct 18, 2009 11:44 pm

I’ve just upgraded my main notebook computer to Windows 7. The process took four hours, windows 7 microsoft upgradeand despites a few minor glitches, was pretty much painless.

So I’m using Win 7 now. It’s a little faster and a little prettier than Vista. (Check out PC World’s Windows 7 review for the specifics.) But as I explore Microsoft’s latest operating system, I find myself wondering why Windows 7 Home Premium Upgrade, the main version for consumers, costs $120.

Will home users pay that price? I’m betting they won’t. True, some Microsoft diehards will line up on October 22 to grab the first copies of Win 7, but most consumers will spot the price tag and walk away.

As much as I like what Microsoft’s done with Windows 7, the improvements don’t warrant such a steep fee, particularly for home users upgrading from the much-maligned Vista. And XP users? Well, migrating to Win 7 is a complex chore that requires a clean install. You may have to upgrade your hardware too. Add up the cost of Windows 7, plus more RAM and maybe a new graphics card, and a new PC starts to seem a lot more affordable.
Isn’t Software Free?

Consumers have grown accustomed to free apps. So many programs cost nothing these days, including Web browsers (Internet Explorer, Firefox, Safari, Chrome), security apps (windows 7 microsoft upgrade, Microsoft Security Essentials), productivity suites (Google Docs, OpenOffice.org, MS Office 2010 Starter Edition), and photo editors (Google Picasa). I’m not suggesting that home users expect a free operating system too, but that $120 sounds awfully expensive in today’s give-it-away software environment.

It’s possible that Windows 7 Home Premium’s sticker price is an illusion, much like the MSRP of a new car. It’s the pseudo price that no savvy consumer would every pay. This doesn’t mean that shoppers will be able to haggle with Best Buy clerks — “I’ll turn around and walk out now if you don’t throw in a cordless mouse!” — but that Microsoft will immediately discount Windows 7 to reflect its true value.

In fact, that’s already started. Microsoft is offering a steep Windows 7 discount to students, who’ll pay just $30 for the Home Premium version through January 3. And the $150 Windows 7 Family Pack, which lets you install Win 7 on up to three PCs, slashes the upgrade price to $50 per computer.

What would you pay for Windows 7?

Contact Jeff Bertolucci via Twitter (@jbertolucci) or at jbertolucci.blogspot.com.

* See more like this:
* Windows 7,
* microsoft,
* windows upgrading

The astonishingly irreverent Family Guy show often pokes fun at Microsoft, and Bill Gates and the Zune have been targets in the past. But while Family Guy’s raucous content might seem a bit outside of Microsoft’s typical marketing purview, Microsoft seems to think that the right kind of edgily-crafted Windows 7-related marketing content will resonate with the show’s audience.

The Family Guy special, which airs Nov. 8, will be shown commercial-free without any breaks or network promotions, and will instead “feature unique Windows 7-branded programming that blends seamlessly with show content,” according to Microsoft. The show will celebrate the work of Seth MacFarlane, creator of “Family Guy,” “American Dad” and “The Cleveland Show,” and also stars MacFarlane’s “Family Guy” co-star, Alex Borstein.

Microsoft is bringing in the big guns on this campaign, which makes sense because it will have to be very carefully crafted — and funny — in order to work. Universal McCann and Crispin, Porter + Bogusky have been asked to come up with what Microsoft calls “customized branded integrations” that are designed in the same vein as the “Texaco Star Theater” radio and television shows of the 1940s and 1950s.

In 2008, Microsoft hired Crispin, Porter + Bogusky as part of a $300 million brand resuscitation effort aimed at counteracting Apple’s devilishly effective ‘Get A Mac’ campaign. Microsoft executives have spent much of this year talking about how well that investment has paid off, and despite some early hiccups — namely the Jerry Seinfeld and Bill Gates head-scratchers — the Crispin, Porter + Bogusky spots have been well received by Microsoft partners.

Gayle Troberman, general manager of consumer engagement and advertising at Microsoft, says the goal of the Family Guy sponsorship is to show how the power and simplicity of Windows 7 can enhance popular Fox content. “We have simplified the PC with Windows 7, and together with FOX, we’re simplifying entertainment,” Troberman said in a statement.

Microsoft is also teaming with Fox Licensing and Merchandising for a 12-week tour of U.S. colleges that will encourage students to test out Windows 7 and also feature outdoor movie nights and other “customized entertainment,” the company said in a statement. In this effort, Microsoft and Fox expect to reach some 4.3 million college students.

Microsoft is obviously ramping up the ‘cool’ factor with its Family Guy and college-focused Windows 7 campaigns, but the Windows 7 marketing message will have to be outrageous, daring, and funny. Otherwise, it’ll just be another target for ridicule.

By Scott M. Fulton, III | Published October 16, 2009, 12:36 PM

In a blog post yesterday first noticed by Computerworld’s Gregg Keizer, a member of Mozilla’s user experience team — stating she was not writing on behalf of Mozilla, as the organization allows — suggested that Microsoft’s revised proposal for a Web browser selection screen for European Windows users still isn’t fair enough to the browser market.

Because more computer users are accustomed to the typical ways to install software, states Mozilla UX team member Jenny Boriss, they may assume that the first choice that appears in a list is the preferred choice. In Microsoft’s original proposal, Internet Explorer 8 appeared in the leftmost column. But in the company’s more neutral alternative as proposed last March, it placed browsers in columns sorted in alphabetical order by their manufacturer. As a result, Apple Safari fell first.

“Aside from being unfair to the other browsers, the problem is that past consumer choice has shown that Safari does not provide an ideal browsing experience on Windows,” Boriss writes. “Taking IE out of the equation because of its advantage as the bundled browser, the free market really does show what Windows users prefer. Safari has the smallest market share of the five other browsers at 2.6%. Frankly, Safari is a good browser for Apple computers, but Apple hasn’t put much effort to make it competitive on Windows. It’s just not their priority. So, by listing Safari first, the ballot is presenting as the recommended item the browser that is least likely to be the one the user wants. This leads to users having a bad experience using the Web, and ultimately hurts the user and the market.”