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The critics already have their pens – or keypads - out to pan the upcoming Windows 7 operating system release. But while Windows Vista certainly will go down as one of the biggest technology failures of the last decade, Windows 7 has the makings of a blockbuster hit.
Here’s why. In the end it won’t really matter if Windows 7 is a great operating system or not. It’s a matter of economics and computer lifecycles. Enterprises and consumers alike put off purchasing new computers with Vista installed, partly because they were unhappy with the performance of the Vista operating system, particularly on low-end systems, and partly because Windows XP systems were still performing adequately. That was even before the economy hit the tank.
In March research firm Gartner predicted the PC industry would experience its sharpest unit sales decline in history, with PC shipments totaling 257 million units in 2009, an 11.9% decline from 2008. The economy certainly played a role in the severity of the decline, but enterprises clearly saw no benefit in purchasing units laden with Windows Vista when a new operating system was on the horizon.
The result is there are millions of computers out there that have lived beyond the typical three-year lifecycle of a PC and need to be upgraded. Windows 7 will be released with a huge pent-up demand.
First the facts. Microsoft said last week that Windows 7 will be generally available on October 22, ahead of its original schedule and in time for the holiday shopping season. Despite inroads made by Linux and the fledgling Google Android operating system, 90% of the world’s PC’s still run on Windows, and Microsoft generates more than half its profit from the operating system unit.
According to Gartner the worldwide installed base of PCs sits at just under 1.2 billion, with an almost 50/50 split between XP and Vista operating systems. It should be noted that the consumer has adopted Vista at a far higher rate than the enterprise.
Fast forward two years and sales of PCs are predicted to leap past the 1.6 billion mark, with Windows 7 controlling more than half of the market (about 900,000 units), compared to about 700,000 units for Vista and XP.
Of course, a lot can go wrong between now and 2012, particularly if the economy slips further into recession. But a more likely outcome is that the economy will rebound and businesses and consumers alike will embark on a computer refresh spree.
During a recent investor conference call, Dell Computer chief executive Michael Dell summed up the industry’s hopes:
“I think what we are seeing certainly is a big deferral of purchases among corporations but when we talk to them, the thing I’m hearing is they are planning on a pretty big 2010 client refresh, and they are sort of planning around Windows 7,” Dell said during the investor call on May 28. “They’ve passed over Vista and they are sort of planning for that now.
“I think the client installed base is getting pretty old in these companies and I think there will be quite a powerful cycle of upgrades in the client environment,” Dell concluded.
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