In a sense, January 2009 is a month in which key-events starring Windows XP, Windows Vista and Windows 7 have converged. A month which marks yet another nail in the Windows XP coffin, the celebration of the two-year anniversary on the market for Windows Vista and the availability of the first public Beta of Windows 7. And the debut of a year signaling more questions than answers for the Windows client division. Questions that Microsoft is not ready to answer publicly.

 

At the end of January 2009, XP died again

 

January 31, 2009 is the official cut-off date for System Builder license availability, after Microsoft discontinued sales of Vista's successor through the direct OEM and retail licenses as of June 30, 2008. Yet, reacting to pressure from partners and consumers, Microsoft is simply pseudo-killing Windows XP, managing to find channels, modalities and excuses to keep an operating system that was launched in 2001 around, almost eight years later, at the same time, acknowledging Windows Vista's failure to respond to the complex array of needs of not only PC makers and the hardware market, but also to the evolving taste and preferences of consumers.

 

The January 31, 2009 availability cut-off date is still up, as far as Microsoft is concerned, but fact is that the Redmond company announced in early December 2008 that system builders would be able to take advantage of a flexible inventory program. In a move which confirmed the ongoing resistance to Windows Vista, even after the availability of Service Pack 1, Microsoft indicated that it was ready to continue offering XP licenses even after January 31, 2009.

 

The software giant worked with distributors and system builders in order to asses the demand forecasts of XP licenses for 2009, and permitted orders of new copies of XP to be submitted until January 31. However, the company is not forcing partners to buy all XP licenses ordered at once, and is ready to distribute them until no later than May 30, 2009.

 

But at the same time, XP licenses will continue to be available, well after the second half of 2009, and even into 2010. “As of April 2008, Microsoft is extending availability of Windows XP Home Edition for OEMs to install on Ultra Low-Cost PCs. The new OEM end date will be the later of either June 30, 2010, or one year after the general availability of the next version of Windows,” Microsoft reveals via its Windows Lifecycle policy website.

 

Still no. 1

 

At the start of 2009, Windows XP was still the indisputable leader of the operating system market. According to statistics delivered by Net Applications, XP owned a market share three times the size of Vista's. With a 65.22% usage share, XP dwarfs the installed bases of rival operating system, almost two years after Windows Vista's general availability. Yet the operating system was undoubtedly hurt by its successor. Back in January 2007, Windows XP accounted for a share of 85.02% of the market. And in this regard, Vista only managed to catalyze a 20% drop in share for XP, a scenario that contributed further to labeling Vista's performance in terms of adoption mediocre at best, but far from any notion of success.

 

Windows XP will continue to live well into the next decade, and only a perfectly “calibrated” Windows 7 will be able to erode its market share to the point where the operating system would no longer own the lion's share of the market. However, XP's evolution has already come to an end. Microsoft delivered SP3 in the first half of 2008, the last service pack for 32-bit Windows XP, and is being quiet about an eventual SP3 for Windows Server 2003, which would also apply to 64-bit XP. But this does not change the fact that XP has offered all it had, and that it's time for consumers to move forward.

 

At the end of January 2009, Vista officially turned two years old

 

On January 30, 2007, Windows Vista hit store shelves worldwide. Yet, a couple of years later, Vista is somewhat misplaced in the context of the computer market. There is a dissonance between the operating system, hungry for many GB of RAM, ready to feast on consistent many-core CPU power, and consumers who are focusing spending primarily on resource limited netbooks. With ultra-low-cost machines disrupting the PC market, Vista simply cannot fit, unless you try to fit an ogre into a tutu. Microsoft released SP1 in the first half of 2008 and is currently working on Service Pack 2, whose Beta is available for download.

 

For the “three months ended December 31, 2008 compared with three months ended December 31, 2007,” Microsoft revealed in the 10-Q filing on January 22 that “Client revenue decreased primarily as a result of PC market weakness and a continued shift to lower priced netbook PCs. OEM revenue decreased $465 million or 12% while OEM license units decreased 1%. The decline in OEM revenue reflects an 11 percentage point decrease in the OEM premium mix to 64%, primarily driven by growth of licenses related to sales of netbook PCs, as well as changes in the geographic and product mixes. Revenue from commercial and retail licensing of Windows operating systems increased $113 million or 19%. Based on our estimates, total worldwide PC shipments from all sources was approximately flat, driven by increased demand in emerging markets, offset by decreased demand in mature markets.”

 

At the same time, for the “six months ended December 31, 2008 compared with six months ended December 31, 2007,” Microsoft revealed that “client revenue decreased primarily as a result of PC market weakness and a continued shift to lower priced netbook PCs. OEM revenue decreased $510 million or 7% while OEM license units increased 3%. The decline in OEM revenue reflects a seven percentage point decrease in the OEM premium mix to 68%, primarily driven by growth of licenses related to sales of netbook PCs, as well as changes in the geographic and product mixes. Revenue from commercial and retail licensing of Windows operating systems increased $238 million or 20%. Based on our estimates, total worldwide PC shipments from all sources increased 4% to 7%, driven by increased demand in emerging markets, partially offset by decreased demand in mature markets.”

 

A failure? Don't be so quick to judge

 

Criticism has repeatedly deemed Windows Vista to be nothing more than a failure on Microsoft's part. Still, at the end of 2008, Vista owned a market share of 21.12%, according to Net Applications. If this percentage is correlated with a volume of licenses, it means that Microsoft has sold over 200 million copies of Windows Vista in the two years since the operating system hit the market. The end of 2008, when Windows client revenue slipped, the loss was in conjunction with a slowing down PC market, and the fact that Microsoft got 80% of its revenue for Windows copies through OEM partners. As the global economic crisis deepens, Microsoft is bound to post ever deteriorating results for its Windows client division throughout 2009, and at least until Windows 7's general availability.

 

At the end of January, Windows 7 Beta downloads continue to be live

 

Many users look to Windows 7 as the answer to all their Vista troubles. Millions of them now have the chance to download, install and test drive the first public Beta of the operating system. Microsoft won't say the exact number, but Steven Sinofsky, senior vice president, Windows and Windows Live Engineering Group, did make a reference pointing to a couple of million downloads, and the Redmond company did prolong the availability of Win 7 Beta downloads past the initial cut-off date, which was January 24, signaling that the limit of 2.5 million wasn't indeed reached.

 

Microsoft Evangelist Kevin A. Remde dared ask what he referred to as the billion dollar question “should I wait for Windows 7 instead of deploying Vista?” He also provided the answer earlier this month, “My opinion on that: Absolutely do not wait for Windows 7. Deploy Vista. (with Software Assurance) Sure, I’m loving Windows 7 and some of the new UI features, but the overwhelming step-up between XP and Vista is still such a huge advantage in productivity, reliability, performance, security, manageability, etc. If you really learn these benefits and how they save you time and frustration (and that means MONEY), you shouldn’t have much trouble cost-justifying the rollout. I sincerely believe** that.”

“So… sure Windows 7 has some nice new navigation and a few less times UAC pops up… but it’s just not the same big change. Windows Vista is the way to go, even if you only consider it the stepping stone to Windows 7. You are very unlikely to have any compatibility or hardware driver issues moving from Windows Vista to Windows 7,” Remde added.

 

Windows 7 will not have a second Beta. From Beta 1, Windows 7 will move directly into Release Candidate stage. As of the RC milestone, the operating system will be complete. Microsoft will simply soften the remaining rough edges of the operating system and will get it ready to be released to manufacturing. Windows 7's RTM will be followed by the GA (general availability), a deadline that Microsoft continues to keep to itself.


Windows 7 Beta is available for download here.

Product keys to activate Windows 7 Beta are available here.