Windows 7 Cavalry Riding To Microsoft's Rescue

Windows 7 is the first Windows release for which Microsoft hasn't doubled system requirements for RAM and processing power, and the result is a leaner, better performing operating system. But is that going to be enough to drive away Vista's wretched legacy and convince recession strapped businesses to start buying PCs again?

Microsoft got burned for overhyping Vista, and despite recent signs that IT spending may be picking up, the hardware refresh that most companies will need to undertake to move to Windows 7 may still be a tough sell. That's one reason why Microsoft hasn't been banging the drum too loudly in the run-up to Windows 7's Oct. 22 official launch.

Tester feedback has been overwhelming positive for Windows 7, but Microsoft CEO Steve Ballmer has tiptoed carefully around questions pertaining to Windows 7's impact on the sagging PC industry. "There will be a surge of PCs but it will probably not be huge," Ballmer told reporters earlier this month at a press conference in the Netherlands.

For Microsoft partners, it's an approach that shows Microsoft has learned from its Vista mistakes. "I think it's great that they're keeping it low key. Windows 7 is almost a grass roots type of release, and that's what it's going to take to win the market back, as opposed to a lot of hype," said Stuart Crawford, business development manager at Bulletproof Infotech, a solution provider in Red Deer, Alberta.

"Everyone expected Vista to lead a massive upgrade cycle, and when that didn't happen, it was a disappointment," said Todd Swank, vice president of marketing at Nor-Tech, a Burnsville, Minn.-based system builder. "This time around, expectations for Windows 7 generally pretty low, especially among system builders. I expect Windows 7 to exceed these expectations."

Due to the uncertain economy, Microsoft has been playing up the cost savings that companies will see from deploying Windows 7. Ballmer recently said companies will save between $90 and $160 per PC annually in costs related to help desk, desktop management, deployment and provisioning tasks.

Microsoft partners have been dutifully echoing this message. Getronics, a global Microsoft Gold partner and early beta tester, claims that Windows 7 will reduce its user support costs by 2,000 hours annually when compared to XP and Vista. Much of that savings is the result of Windows 7's ability to remotely manage IT infrastructure.

Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based Microsoft Gold partner, is another Microsoft partner who's bullish on the cost savings potential of Windows 7. "The integrated search really works, and end customers can save purely on the deployment front because the load time is so much quicker," he said.

NEXT: Where Are The Windows 7 Services?

For a company that relies as much on channel partners as Microsoft does, highlighting the services opportunities associated with Windows is a smart tactic. But Microsoft overdid this with Vista, and the results were disastrous.

In late 2006 during the run-up to Windows Vista's launch, Microsoft commissioned a study from IDC that estimated that for every dollar Microsoft earned from Vista, partners would earn $18 in associated revenue. But when market resistance to Vista calcified, services revenue dried up, and partner anger began to mount.

"Vista never even came close to Microsoft's projections for partner revenue, and that was surprising since Microsoft software has traditionally been a solid revenue generating engine," said one solution provider, who asked not to be named.

Microsoft has commissioned another IDC study that claims partners will reap $18.51 in related products and services revenue from U.S. sales of Windows 7 through the end of 2010, and this time, there's reason to believe that this could indeed come to pass, says Sobel.

"Customers are actively interested in pursuing Windows 7 deployments, and there is clearly going to be services revenue around that," said Sobel. "Windows 7 finally allows you to have discussions with customers about IT infrastructure upgrades on the back end to leverage Windows 7's capabilities, particularly in terms of virtualization."

Microsoft is launching Windows 7 in conjunction with Windows Server R2, which includes expanded virtualization features and an upgraded version of Hyper-V. Vista didn't launch with an accompanying version of Windows Server, so there wasn't as much synergy there as there is now with Windows 7 and Windows Server 2008 R2. Bringing in the server side adds a raft of associated services opportunities for the channel, according to Matt Scherocman, vice president of consulting services at PCMS IT Advisor Group, a Cincinnati-based solution provider.

For many Microsoft partners, Windows 7 is everything they wish Vista had been. In fact, that has become something of a mantra within the Microsoft channel. But regardless of how good Windows 7 performs, VARs will also face the task of moving their XP-based customers to an entirely new user interface. In the end, that could be the most time-consuming challenge the channel faces in helping Microsoft finally put XP out to pasture.

"The big part will be convincing people to change. That's the hardest part of what we deal with," said Cor Knijnenburg, CEO of Core Consulting, a Plano, Texas-based solution provider. "It's not loading Windows 7 or configuring all the policies, it's getting people to change and accept a new user interface."