Microsoft, Partners Beaming Over Windows 7

Microsoft CEO Steve Ballmer says sales of Windows 7 have been "fantastic" since last month's launch, and Microsoft solution providers are just as impressed with the level of demand they've seen for the spanking-new operating system.

Speaking Thursday at a press conference in Tokyo, Ballmer said Windows 7 revenue during its first 10 days on the market has already surpassed that of any previous Windows release, as reported by Bloomberg. This is surprising considering that Ballmer has spent much of the year trying to temper expectations for the impact Windows 7 will have on the still-reeling IT industry.

New research suggests that Ballmer's declaration is right on the mark. According to the NPD Group, Windows 7 software unit sales in the U.S. were 234 percent higher than those of Windows Vista during the few days after launch. While this figure refers to boxed copies of Windows and not sales to businesses, Microsoft partners say they're seeing growing interest in the new OS from companies that are still based on XP.

"There is a tremendous amount pent up demand from customers that have four-to-six-year- old desktops running Windows XP," said Michael Cocanower, president of Phoenix-based Microsoft solution provider ITSynergy. "Those customers have told us they intend to move to Windows 7 when they refresh the hardware."

Steve Bohman, vice president of operations at Columbus Micro, a Columbus, Ohio-based system builder, is seeing a "remarkable" level of interest in Windows 7, in contrast to the near-absence of customer queries he fielded after Vista's launch. "We have many corporate and educational customers anxious to get it installed and begin testing," he said.

Although Vista's failures have heightened demand for Windows 7, another key driver has been Microsoft's decision to release beta versions to the public well in advance of the launch. This gives customers peace of mind that they won't run into any unwelcome surprises.

"Customers are inquiring about Windows 7, and some have taken advantage of the beta and release candidate programs to test it out on their systems," said Travis Fisher, executive vice president at Inacom Information Systems, a Salisbury, Md.-based solution provider.

But despite the market's interest, Windows 7 still faces hurdles. According to NPD, Windows 7 PC sales were six percent lower than Vista PC sales during the first week, and while October isn't traditionally a strong month for PC sales, at least some of that dip has to do with the uncertain economic situation, which has hit consumer confidence and kept IT spending in a holding pattern. IDC predicts that Windows 7 shipments will reach 40 million by the end of the year, but this holiday PC sales season will have to be strong to reach this figure.

Tim Ulmen, principal at Midwest IT Solutions Group, Wichita, Kan., acknowledges that the economy could slow Windows 7 sales -- including new PC sales with OEM licensing, volume licensing to corporate accounts, and licensing upgrades to SMB and consumer accounts. Still, the overriding factor, according to Ulmen, is that Microsoft has fixed its Vista mistakes in Windows 7.

"I think end users' perceptions are that Microsoft has made the necessary corrections to help eliminate what happened during the Vista debacle," said Ulmen.