System Builders Can Buy Windows XP Until January '09

OEM Windows

The Redmond, Wash., software company is forcing all PC makers to make the required switch to Windows Vista from Windows XP faster in this upgrade cycle than in previous ones. Vista shipped this past January, and Microsoft will cease Windows XP access to brand-name OEMs in January 2008 and to the channel in January 2009.

In contrast, after Windows XP shipped in late 2001, Microsoft continued to make OEM licenses for Windows 2000 available to top-tier PC makers until the second quarter of 2004 and to system builders until the second quarter of 2005.

"The direct OEMs will have XP gone by next year, but system builders will be able to buy DSPs [OEM copies through distribution] for another year after that," said Joe Toste, vice president of operations at Equus Computer Systems, Minneapolis.

"As a direct OEM and system builder, I would argue that the transition has been a lot easier for system builders," Toste added. "Microsoft has made a lot more demands of their direct OEM customers."

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OEMs may gripe about the stepped-up timetable for transitioning its PC makers to Vista, but it may be a short-term opportunity for system builders, according to Forrester Research analyst Benjamin Gray.

"What does this mean for system builders? More business," Gray said. "Companies not ready or willing to migrate to Vista will turn to them to build Windows XP machines rather than the HPs, Dells and Lenovos of the OEM world."

Other system builders maintain it won't be a hardship for any OEM, large or small, because they expect most of the application and hardware incompatibilities that are stalling Vista adoption today to be resolved by the year's end.

"I actually don't think this is a big deal. This is what I would expect of an OS transition, and [it] seems very similar to what transpired with the move from 2000 to XP," said M.J. Shoer, president of Jenaly Technology Group, Portsmouth, N.H. "By the end of the year, any lingering compatibility issues should be behind us."

In addition, customers buying Vista Business have downgrade rights to install Windows XP Professional and still be legal, said Todd Swank, vice president of marketing at Nor-Tech, a system builder in Burnsville, Minn.

"XP will still be available through distribution for at least a couple more years and supported by Microsoft through at least 2012," Swank noted.

James Huang, director of marketing at AMAX Information Group, a Fremont, Calif.-based system builder and contract manufacturer, said there's ample time for clients to get ready for the move to Vista.

"Nine- to 12-month advance notification should be plenty of time for our customers to prepare themselves to plan and upgrade their infrastructure and OEM platforms to Windows Vista," Huang said.

Still, some partners are worried that Microsoft may be shooting itself in the foot by pushing OEM partners to switch in such a short time period.

"It seems faster than [the transition for] Windows 2000," said Steve Bohman, vice president of operations at Columbus Micro Systems, Columbus, Ohio. "Thank goodness for downgrade rights."

Joe Balsarotti, president of Software To Go, a St. Peters, Mo.-based solution provider, said that nudging customers to go to Vista before they're ready could backfire on Microsoft.

"If Microsoft cuts off XP early as is being reported, they simply give clients more and more reasons to look at alternatives. The same mistake Apple made some 20 years ago, when they had 80 percent-plus market share and gave no incentive for Apple II owners to scrap everything and move to the Mac," Balsarotti said. "What goes around, might just be coming around."

One small OEM said that with the faster timetable, Microsoft is rolling the dice because of ongoing problems getting Vista to work with the most basic peripherals, such as Hewlett-Packard printers.

"Microsoft should, for its own well-being, keep a dual OS approach,' said Jason Simonds, president of Computer Connections, a VAR in Dasmariscotta, Maine. "It seems illogical to pressure the market to move where it doesn't want to go. It isn't like they will lose revenue by keeping XP on the SKU list, yet they could certainly lose revenue by removing access to XP."