Vista Adoption: Who's Taking The Plunge?

first new operating system

But the real picture is a complicated one, according to the Vista Adoption Study recently conducted by CRN and research firm Cowen and Co., in which CRN surveyed 170 solution providers about the SMB market and Cowen surveyed 238 enterprise IT buyers.

For instance, there's a striking similarity among the Vista adoption drivers in the SMB and enterprise markets, but even though enterprise adoption rates are expected to lag those in the SMB, more than one-third of solution providers surveyed don't expect Vista adoption among their small-businesses customers to begin until at least next year. Another 15 percent don't know when their customers will begin installing Vista.

Like enterprises, SMB customers are most interested in Vista's security, mobility/networking and manageability improvements, survey respondents said. But what will jump-start use of the software upgrade in the SMB sector later this year won't be the new OS's features, partners said. It'll be normally scheduled hardware replacements, availability of Microsoft's first Vista Service Pack and more third-party Vista drivers.

"Most customers indicate they are planning to wait awhile before upgrading to Vista," said Larry Allen, business development manager at NetCom Systems, a Roswell, Ga., Microsoft Gold Certified Partner. "New hardware purchases and application compatibility or improvements will drive the move."

<< Slide Show: Vista Rollout: Not So Fast

Yet, Vista adoption will certainly take off faster in the SMB market than the enterprise, according to the study. Only 16 percent of enterprise IT buyers expect to adopt Vista in the second half of the year, compared with 33 percent in the SMB, survey respondents said. And in the first half of 2008, only 18 percent of enterprise IT buyers said they would be adopting Vista vs. 29 percent in the SMB.

"Enterprises will wait a year. My first deployments will be in April and May," said David Sobel, president and CEO of Evolve Technologies, a Fairfax, Va., Microsoft Gold Certified Partner who expects half of his enterprise customers will have Vista on their PCs next year. "It will be a bell curve through mid-2008."

It's typical for smaller companies to start migrating to new operating systems faster than large corporations because they have fewer applications to test. In this particular upgrade cycle, there are also additional issues to factor in: Hardware costs could stall some adoption, but pent-up demand for PCs (due to Vista's five-year development process), healthier IT budgets and easier desktop migration features for Vista are expected to accelerate the pace of upgrades for all SMBs.

Michael Cocanower, president of IT Synergy, a Microsoft solution provider in Phoenix, said he expects business will take off once ISVs release their Vista drivers. "I think most of these issues will be worked out by the second half," he said. "In general, what we are seeing is not a large upgrade or migration trend but, rather, I think small businesses will start purchasing new PCs with Vista in the second half &#91;of 2007&#93;," he said. "That trend will certainly continue into next year."

NEXT: Hurdles to adoption HURDLES TO ADOPTION
There are stiff challenges partners know they must overcome to convince their customers to move over to Vista.

For enterprises, platform stability was the No. 1 reason IT buyers gave for delaying Vista adoption, cited by more than half of respondents as a "highly influential" factor in delaying adoption. Application compatibility and migration cost and impact followed as No. 2 and No. 3, respectively.

In the SMB, the top three concerns leading to adoption delays were migration cost and impact, cost of associated hardware and application compatibility, in that order.

Although some vendors have earned Microsoft's "Works with Vista" or "Certified for Vista" stamp of approval on new products, the vast majority of application developers&#8212;especially those serving corporate customers&#8212;won't make their updates available until the second half of 2007. Once many of these issues are resolved, the migration will begin, partners say.

"Because we deal with mostly small businesses, we are on hold waiting for antivirus, backup, and other vendors to get their products fully ready for Vista," said Jason Harrison, president of Harrison Technology Consulting, Nashville, N.C. "We will be holding off on anything new, OS upgrade or new systems for Vista, until all third-party support is there."

Kerry Mann, president of Mantralogix, a 12-person Microsoft solution provider in Ontario, said the bulk of his midmarket customers will begin moving as soon as leading midmarket applications are updated for Vista.

"None of the clients that use desktops to run mission-critical applications like ERP or CRM can go to Vista right now because most software publishers aren't ready," said Mann. "We're going to see adoption start happening and the ability to push people in that direction in the last quarter of 2007 and first quarter of 2008, when the maintenance releases and patches are ready."

As in other Microsoft product upgrade cycles, the release of the first Service Pack is more influential for Vista adoption in the SMB market. It was cited by 61 percent of solution provider respondents as being partly or highly influential in determining when their customers would upgrade to Vista. Evolve's Sobel said he expects his Vista business to accelerate once the Vista Service Pack and all the third-party drivers are released.

Analysts said these releases are pivotal.

"SMB customers care more about the timing of the release of Vista SP1 because it's the 'all clear' sign from Microsoft," said Walter Pritchard, a senior analyst at Cowen and Co., San Francisco. "The second half of 2007 and first half of 2008 is when a lot of companies will get started, and that's when the application publishers will come out with Vista-compatible code."

The Cowen analyst agreed that SMB customers will adopt Vista faster than large corporations because they have fewer applications to test and generally use off-the-shelf applications from Microsoft, Intuit and Adobe and other ERP, CRM and vertical applications. Enterprise customers, in contrast, run many complex custom applications and must test them for months and sometimes years before safely deploying an OS upgrade, he said.

"I think most businesses will probably upgrade through the OEM channel when they replace hardware," said Tim Long, owner and technology consultant at TiGra Networks, Great Britain. "At this moment in time, Windows Vista is an awkward fit on an SBS network and requires careful management. But I am confident that the SBS team will rectify that soon. I currently have one customer with 10 PCs that is considering a complete hardware refresh that would incorporate Vista."

NEXT: Under the hood of Vista UNDER THE HOOD
The features solution provider respondents cited as key for the SMB were, first and foremost, security, followed by mobility and networking enhancements and then improvements in manageability. Enterprises named these same three features as adoption drivers in a different order: Security was also No. 1, followed by manageability improvements and then mobility and networking enhancements.

Matt Scherocman, a director at PCMS IT Advisor, Cincinnati, said it wasn't surprising that SMB customers and enterprises named the same top three features as deciding factors, since SMB customers' requirements have changed over the past five years. Now, security and mobility features have great appeal for SMB customers, he said.

"Security continues to be a paramount concern&#8212;BitLocker functionality is especially strong," Scherocman said. "More and more laptops are sold every year, making mobility functionality more important."

"Security is big for SMBs," said Tom Richer, North American Microsoft practice lead at Cognizant, which currently has 28 Vista and Office 2007 engagements in the works. Smaller companies don't often have robust security around the perimeter, which means that mobile workers&#8212;and the internal network&#8212;are exposed to viruses and malware.

Despite Vista's incorporation of security and management features pioneered by Microsoft's third-party ISV partners, the release of the operating system is not expected to hurt those partners, the survey also showed. Only 21 percent of solution providers surveyed said adoption of Vista will enable their SMB customers to spend less per PC on add-on security.

This is most evident in the small-business market, where 27 percent of solution providers expect Vista's new security features, such as user account protection, Windows Defender and enhanced Windows Firewall, to offer their customers real savings.

Yet an overwhelming majority&#8212;66 percent&#8212;expect its release won't impact customer spending for add-on security offerings from third-party vendors Symantec, McAfee and Trend Micro.

Solution providers said this is due in part to evolving threats, compliance requirements and customer loyalty. For example, NSPI, , a Microsoft Gold Certified Partner in Roswell, plans to continue supporting clients who use products from CA, McAfee, Safebrowse, Symantec and Trend Micro, said COO Stephen Moss.

The survey showed similar results for third-party desktop management software vendors. Although one-third of respondents expect Vista's built-in diagnostics, backup and restore and simplified management tools will reduce customer spending on add-on desktop management software, almost double&#8212;56 percent&#8212;claim that their spend on third-party add-on management software won't change after their migration to Vista.

SMB customers that use Vista's built-in diagnostic tools will rely on third-party add-on applications for this purpose less but will continue to invest in third-party software for emerging security threats and new management needs, such as virtualization, solution providers surveyed said.

In the case of the desktop, the big challenge is managing the platform, improving reliability and security while controlling or reducing costs and saving time, said Neil Rosenberg, president and CEO of Morris Plains, N.J.-based Quality Technology Solutions.

"Microsoft is making real strides to try to help customers in this space, since these issues are blocking deployment of their new technologies," he said. "But there are a ton of management tool choices and options for customers."

Overall, NSPI's Moss said he is optimistic about projected SMB adoption and already has migration planning activities in full swing.

"Based on our initial work, sales and service activities, we expect Vista to move pretty rapidly," said Moss. "Volumes will be into the hundreds of thousands for desktop conversion services in early 2007 and almost all new desktops on all of our rollout projects, ranging from 30 to 500 desktops in the first half of 2007, are spec'd for Vista."

As solution providers gear up for an uptick in Vista business during the second half of 2007, they should begin preparing customer deployments now, said one Microsoft Certified Partner.

"Vista and Office implementations are so far only for smaller firms, and I think it will take a few months before we see any substantial revenue," said Per Werngren, president of IDE, Stockholm, Sweden. "But it is important to help customers evaluate and test Vista and Office 2007 in their environment. The big partner opportunity is to help customers increase their &#91;infrastructure&#93; maturity by creating standardized desktops to lower costs for the customer. This will give good revenue to the partner, making everyone a winner."