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Toughest Test for Microsoft in 2006 is Windows Vista

December 17, 2005

The biggest challenge for Microsoft in the coming year would be to convince the corporations to upgrade to Windows Vista which is being launched by Microsoft late in the year 2006.

Although demos of the still-in-the-works operating system boast cool graphics effects and consumer features, it's enterprises that Microsoft must persuade. "Windows is Microsoft's biggest business unit, and Vista is it's biggest challenge," said Rob Helm, director of research at Directions. "Frankly, I think it's going to be very difficult for Microsoft to make its case to corporations."

Rob Helm, the director of research at Directions.is not optimistic because of the years-long trend of shrinking deferred revenues received from long-term licensing programs, such as Software Assurance, which gives customers the right to all upgrades during a two- or three-year span. Lower revenues there means that fewer companies are buying into Software Assurance, perhaps because they're balking at upgrading operating systems. The Windows Client division has to tell corporate customers why they want Windows Vista, and why they shouldn't wait until they buy new hardware," said

"Microsoft's in a bit of disarray," said Helm when talking about the company's online strategy. "They're trying to focus on Google, and come up with things to take away from Google. I don't think we'll see any huge concrete results here in 2006."