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Microsoft hoping updates
keep business world happy
Saturday, November 25,
2006
Associated Press
Redmond, Wash. - Bill Hartnett got
accustomed to the screaming. As Microsoft Corp.'s manager of software sales to
financial services companies, Hartnett used to get pelted with complaints about
the security and reliability of Microsoft's products.
Hartnett speaks openly about those dark days because he's sure they're well
past. He and his colleagues contend the company is about to give businesses
compelling reasons to not just tolerate Microsoft, but to be thrilled with it.
The occasion is the launch of crucial upgrades to Microsoft's most widely used
and most profitable products. All at once, Microsoft is releasing a new Windows
operating system, known as Vista; an update of the Office "productivity"
package, which includes Word, Excel, Outlook and PowerPoint; and server software
that handles behind-the- scenes functions.
The products will begin to be
available for business users Nov. 30, with a consumer release of Windows and
Office on Jan. 30.
Even in a less competitive world, the immensity of the launch would make this a
crucial time for Microsoft. Vista has been delayed so long that it has been five
years since the last overhaul of the operating system, which runs 90 percent of
the world's personal computers. Office last was refreshed in 2003.
But the stakes are particularly high now. Savvy competitors using the Internet
are challenging Microsoft's status as computing's vital plumbing provider.
Meanwhile, Microsoft is spending some of the vast fortune it has amassed in
desktop software to branch out with expensive splashes in video games and music
players.
In other words, this is no time for Microsoft to deliver a dud in the core of
its franchise. Next Thursday's corporate launch of Vista, Office and server
software is being called "A New Day For Business," meaning Microsoft's
customers, but the phrase applies in Redmond just as well.
Microsoft executives claim that computer users who upgrade to Vista or Office,
but especially both together, will be dazzled by how much more productive they
can become. The company spent years studying how people use its most popular
programs and retooled the user interface accordingly.
It also worked to make its software sturdier - less prone to crashes and less
vulnerable to hackers. Because of that and new tools aimed at pleasing corporate
technology staffs, Microsoft estimates the labor costs of supporting a machine
running Vista will be $507 per PC a year, down from $542 with Windows XP.
Despite the improvements, many analysts don't expect corporate technology buyers
to rush to buy 2007 upgrades. Surveys have found that fewer than half plan to
adopt Vista in its first year of release.
That's largely because switching can be a complicated, costly process. Many
organizations only recently upgraded to Office 2003. And while Vista and Office
may look better, a lot of the features are likely to be seen as nice-to-haves
rather than must- haves.
Forrester Research analyst Kyle McNabb, who tracks business computing, believes
the most powerful new item from Microsoft won't be something PC users can see.
It's Microsoft's server software - particularly the Sharepoint
document-management service - that McNabb believes has been best reshaped.
This is no small matter. Together, Sharepoint, the Exchange e-mail offering and
Office software rang up $14.5 billion of Redmond's $44.3 billion in revenue in
the last fiscal year, which ended June 30. That exceeded Windows sales of $13.2
billion.
These segments are so profitable - that combined $27.7 billion from business
software and Windows sales produced $19.9 billion in operating income - that
they all but float the company, letting Microsoft's entertainment and online
divisions lose money.
Still, competitors have made important inroads, one reason that Microsoft stock
remains cheaper today than when Windows XP launched in 2001.
Open-source offerings such as Zimbra, an e-mail service that competes with
Microsoft Exchange, have grabbed customers with lower prices and a more flexible
delivery.
Other rivals, including Google Inc., are increasingly hosting Office-like
applications over the Web for free, supported by advertisements.
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For more
information about
Microsoft Updates Contact:
AcceleCash
Business Services
Contact:
Andy Sparano
Eikons
Consulting, Inc.
Contact:
Allan Wrona
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