HP, Channel Players: Vista Big Bang Will Be Deferred

"HP does not expect Vista to have a huge impact on its business, at least not initially," said HP Executive Vice President and CFO Bob Wayman on Wednesday.

"Commercial customers are not going to run to upgrade to Vista. They'll look at Vista the next time they're in an upgrade cycle," Wayman told an audience of analysts at the annual Raymond James & Associates IT Supply Chain conference in New York.

He also expects consumer response to be muted at first. "They're not jumping on it," he said.

The consumer versions of both Vista, the new Windows client operating system, and Office 2007 are due in late January. The volume business versions launched officially on November 30.

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"Once it's out there, assuming it gets good reviews, our forecast is Vista is not a big deal. It's important in the long scheme of things but in terms of buying patterns, it's not a big deal," he said.

HP has been shipping Vista-ready machines for several months, he said. Wayman does expect the advent of Vista to boost sales of memory. "Apparently, for Vista to operate the way Microsoft wants it to operate over time, we'll see more demand there. It's not a new trend there either but Vista may trigger a little more demand on the consumer side."

Even as Wayman managed down expectations for Vista, Microsoft and HP, already partners in enterprise accounts, are slated to announce a new enterprise services deal tonight on a call featuring Microsoft COO Kevin Turner along with HP Technology Solutions Group chief Ann Livermore, Peter Boit, vice president of Microsoft's Enterprise and Partner Group, and John McCain, HP's senior vice president and general manager, HP Services.

Other HP services executives have told CRN that the company is banking big on Vista, not only in terms of services and product sales but for internal usage.

Robb Rasmussen, vice president of consulting and integration for HP Services, told CRN prior to the Vista launch that the company plans to standardize on Vista and on mobile iPaq devices running Microsoft software.

Asked about his forecast for corporate adoption, Rasmussen said: "I can tell you what one $90 billion company has done. At HP we're a pretty loose environment, [there are] Palms, Blackberries, every kind of device you can imagine. But with our desire to try and lower cost of management and up security, we'll solidify around our iPaq device which will run Windows Vista. Period," he noted. "In a matter of time, all of those other devices will be shut off the network and will not get access."

Rasmussen said he did not know the time frame for the change, but said there will be a steady "ramp down. . . If you have other devices, the CIO of the organization is making a tough rule."

Wayman's take on the demand curve for Vista was echoed by channel players at the conference. Bob Dutkowsky, CEO of Tech Data, called Vista a "phenomenon at the enterprise level" in the second half of 2007 and he expects SMBs to follow enterprises. "There's no rush to upgrade," he noted. "If you're going to launch a green field opportunity, you might consider Vista, why not? But businesses converting to the value add Vista, I don't see it."

Tampa-based Tech Data doesn't have a significant consumer business so it doesn't expect to reap much reward from that segment, Dutkowsky said. But in general, "I don't know that you'll see the lines outside of Best Buy like you saw for Xbox. Anyway enterprise rollouts will take time."

Judging from an online survey on CDW's web site, CDW Chairman and CEO John Edwardson doesn't expect the bulk of his customers to be in any hurry either.

Microsoft CEO Steve Ballmer "publicly disagreed with our numbers, but we just don't know for sure other than what our customers are telling us," he noted.

CDW has trained all 2,300 account managers on Vista. "One of the big debates we had is should we have done this November or wait three to six months when it's out there. We decided to go out and lead the effort. We want to get a lot of visibility around Vista," he noted.