NPD: One Windows 7 Isn't Enough
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News Analysis. Most PCs sold at retail come with either Windows Vista Home Premium or XP. So why does the market need six Windows 7 versions? |
That's the question I asked Stephen Baker, NPD's vice president of industry analysis, earlier today. On Tuesday, Microsoft announced six Windows 7 versions: Starter, Home Basic, Home Premium, Professional, Ultimate and Enterprise. My contention: Six Sevens is at least five too many. Shouldn't one be enough? Stephen doesn't agree.
NPD's December U.S. retail data (for online and brick-and-mortar operations) shows the Windows PC market largely consolidated around one Windows version: Vista Home Premium. My immediate reaction is, "See, the market has chosen one version." Stephen sees something different, and he is the expert: The complexities of the Windows market demand multiple versions.
Maybe, but Apple sells one Mac OS X (OK, two, if you count the server version).
"It's not fair to compare what Microsoft has to do with what Apple does," Stephen said. "You can't compare the constituencies." He joked, perhaps poked, about Communism and there being one market. "When you own the market," Stephen said, referring to Apple, "it's easy to go with one SKU."
For Macs, there is one OEM, Apple, and a much simpler retail channel, particularly because of the small number of business customers. Apple also supports a smaller hardware channel and can make major operating system changes that would cause Microsoft problems. Microsoft can't, say, release a new version of Windows that is incompatible with applications or hardware a few years old, Stephen said.
I quipped that was in a way one of the problems with Windows Vista, at least before Service Pack 1. Stephen said that I made his point. Microsoft has to worry about backward compatibility with older applications and hardware. Business customers also demand different features. They don't want the added overhead and complexity unused consumer features bring to Windows.
"You don't have a market where one size fits well," Stephen emphasized. "Microsoft doesn't have a choice like Apple does. They have to serve all these constituencies."
Stephen is mostly satisfied with the Windows 7 version strategy, particularly because of Microsoft's marketing messaging. "I think each SKU has a focus on a constituency." Also: "What they've done very well is to step back. The messaging to consumers and OEMs is going to be clearer."
Microsoft is changing for the better, with respect to marketing, version strategies and partner relationships, if for no other reason than out of necessity. "I think they're scared of the fact there are competitors out there, and consumers and businesses are making those choices," Stephen asserted. He called out Mac market share gains and Linux's early but receding success on mininotebooks (e.g., netbooks).
Stephen is one of the best, if not the best, U.S. retail analysts. He very well understands the nuances of retail sales. But as we spoke, I kept looking at the numbers—Home Premium on more than 83 percent of desktops and laptops sold through retail—and wondering why Microsoft needs to ship six Windows versions.
I'll concede to Stephen that one version isn't enough and perhaps Microsoft should offer two or three Windows 7 versions. In praising Microsoft's marketing approach, of offering two primary Windows 7 versions, Home Premium and Professional, he tacitly acknowledged that for most customers a consumer or business operating system choice would be enough.
What about Home Basic and Ultimate? Microsoft plans to only distribute Windows 7 Home Basic in select countries, and the United States isn't one of them. Microsoft says that Windows Vista Ultimate will be available for enthusiasts or to people who essentially need a Windows 7 Home Premium + Professional.
"Microsoft needs a cheaper product [Home Basic] to sell in emerging markets against Linux," Stephen said. OK, I can concede that.
"But Ultimate kind of gave me pause," Stephen said. "I'm not sure the incremental thing Ultimate offers is worth the market confusion. In a perfect world, that product wouldn't be there." As the charts show, Vista Ultimate ships on less than half a percent of PCs sold at retail.
By the way, so no one is confused, the NPD numbers are only for Windows operating systems on PCs, not retail boxes. Also, NPD tracks sell-through, not ship-to. Microsoft tracks Windows licenses shipped into the channel. NPD's numbers track Windows PCs sold to customers. Sell-through more accurately reveals market trends.
Something else about the NPD data: The high number of Windows PC systems is almost entirely from mininotebooks. I will offer analysis and explanation in the next post.
I asked Stephen if he thought Microsoft could release Windows 7 in time for the back-to-school buying season. My expectation: Windows 7 will release to manufacturing by June 30. "I can deal with them missing back to school," he said.
The whole channel would hugely benefit from Windows 7 shipping for holiday 2009. Given the dire retail economy, "it's really needed," Stephen said. "It would be awesome if they make the holidays."
[Please send your tips or rumors to watchtips at live.com].
Related Posts:
- Six Sevens Is Five Too Many, Microsoft Watch, Feb. 3, 2009
- Next Windows 7 Milestone: Release Candidate, Microsoft Watch, Jan. 30, 2009
- Windows 7: Model for Microsoft Reinvention, Microsoft Watch, Jan 28, 2009
- Can Microsoft Blame Netbooks?, Microsoft Watch, Jan. 26, 2009
- Six Sevens Is a Bad Idea, Microsoft Watch, Jan. 26, 2009
- Don't Try This with Windows XP, Microsoft Watch, Jan. 26, 2009
- Why Work When Windows 7 Is All Play?, Microsoft Watch, Jan. 13, 2009
- Did You Get Windows 7?, Microsoft Watch, Jan. 11, 2009
- Are Telco Subsidies Coming Back?, Microsoft Watch, Dec. 9, 2008
- Does Windows Have a Future on Netbooks?, Microsoft Watch, Dec. 7, 2008
- Origami: Flattened by Netbooks?, Microsoft Watch, Sept. 29, 2008
- XP Pro Execution Set, Home Gets Reprieve, Microsoft Watch, April 3, 2008
- Microsoft's Big Problem in a Small Box, Microsoft Watch, Dec. 7, 2007
Comments (13)
How about just one Version that is secure?
How Conflicker Virus Felled the Military
www.intelligenceonline.com/Identification/p_identification.asp?rub=login&lang=ANG&service=EVE&context=CAN&doc_i_id=55783856
"For the past two weeks, the French defence ministry’s networks have been infected by a computer virus that has brought down certain arms systems, like that of the French Navy’s Rafale fighter aircraft - The origin and exact characteristics of the virus aren’t known as yet, but the scope of the crisis, revealed by Intelligence Online, raises serious questions about the security of French military networks and their capacity to fight off computer attacks."
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First the British, and now the French. Yep its Windows.
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ANZ warns of malicious virus
business.smh.com.au/business/anz-warns-of-malicious-virus-20090205-7ylr.html
"A computer virus has affected the banking marketplace and affected some ANZ customers who have logged onto ANZ internet banking,'' a spokesperson from the bank said in a statement."
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Computer Virus Hits City Computers
www.kspr.com/news/local/39119862.html
"Internet access has been turned off to most city of Springfield computers. The information systems department is dealing with a computer virus that uses the Internet to spread itself. The city says it's affecting a "significant amount" of computer work stations."
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Try Linux free today download an iso from www.distrowatch.com and get the malware off you machine
Posted by Chips B Malroy | February 5, 2009 4:42 PM
I think Microsoft should only release 4 versions. Home premium which would offer all the media capabilities of the OS. Professional which would offer business productivity software as well as all the media capabilities. Enterprise which would only offer business productivity aspect. Lastly starter for emerging market. Stop there.
Posted by HD4870 | February 5, 2009 5:11 PM
I was under the impression that Windows 7 was going to have a small footprint (or certainly it was taken into consideration) and whilst the issue of bloat for me, mainly refers to whats actively floating about in system during runtime, I believe it also responds to how much of your HD is taken up with the OS itself.
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The following then comes as a little surprise:
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Quote "So…for Windows 7, we are using a single image for all SKUs. This means the bits for all the editions are already on your computer if you are running Windows 7. With Windows Anytime Upgrade, users can unlock and upgrade to a different SKU much easier than before."
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Read the whole article here:
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http://windowsteamblog.com/blogs/windows7/archive/2009/02/04/a-closer-look-at-the-windows-7-skus.aspx
Posted by Goblin | February 5, 2009 5:27 PM
“Business customers also demand different features. They don't want the added overhead and complexity unused consumer features bring to Windows.”
In that case, why is it, with Windows 7, that the business versions (Professional, Enterprise) are strict supersets of the main consumer version—Home Premium?
Posted by Lawrence D'Oliveiro | February 5, 2009 6:54 PM
I want the shill version, you know... the one that comes with free laptops. The shill edition has great security, gives rich rewarding experiences, every device connected up to it works out of the box, even older printers from years ago. It never slows down, its faster than the speed of sound. Never crashes, never blue screens, looks better than any other OS ever made and is the greatest thing since sliced bread. So when is this "special edition" going to be available to all?
Posted by Leech | February 5, 2009 7:05 PM
@Leech
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Whilst I did chuckle at your comments, I would kindly ask you not to post like this.
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Those type of posts give ammunition to people who try to claim we use the same shill tactics that they do.
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Id prefer Linux/Opensource to speak for itself, we do not need to use anything other than personal experiences and then let others judge for themselves.
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I hope you keep that handle and become a regular poster here, but please, its hard enough to fight the years of myths such as "needing compilers to play music CDs" without having people act in the same way that some of our dubious pro-ms posters have.
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I now standby to have the allegation thrown at me that "leech" is me and I am talking to myself.
Posted by Goblin | February 5, 2009 7:12 PM
Actually, all the SKU's will be available everywhere Windows is sold. Its just that, Starter, Home Basic, Ultimate will be available only through OEMs, along with Enterprise remaining a Volume License solution. Home Premium and Professional will be what you see at retail and will be top choice in developed markets. It provides more clarity and choice for both OEMs, System Builders and Consumers.
Posted by Andre Da Costa | February 5, 2009 7:55 PM
Hi Andre
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Ridley is alleging that you have made comments suggesting that you need a compiler in order to play music CD's in Linux. Would you like to confirm or deny this?
Posted by Goblin | February 5, 2009 8:04 PM
I still don't see any compelling argument for more than two versions of Windows 7 - Home/Consumer and Pro/Business. Microsoft are just going to waste time, money, and yet more customer goodwill with the multiple-SKU approach that clearly failed with Vista...
Posted by King Stairs Software | February 5, 2009 8:30 PM
For a talking point, heres a vista/linux/win 7 performance comparison.
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http://tuxradar.com/node/33
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Might be a good discussion point.
Posted by Goblin | February 5, 2009 8:38 PM
if you look into it in detail than US will only see Home Premium, Professional and Ultimate (Now this is whaty you can buy from a retail store) but if you are a business you get an option to buy Professional.
Basic is not available to anyone in US/UK or major 1st world countries, so this time around MSFT isnt confusing anyone.
I think this time around MSFT is making sense.
Posted by Hassan Raza | February 6, 2009 8:41 AM
Who cares? Really.
They are offering a choice. Want the all-n-one? Get Ultimate. Not? Well there's a range of choice. A couple of those are special versions for special markets. Quit complaining and instead show a bit of appreciation for the things you get in your lives.
Posted by Clump | February 8, 2009 1:39 PM
Okay, if OEMs only instal Vista Home Premium on their machines because they can no longer instal XP then of course the figures for Vista Home Premium will look great - because customers aint being given a choice about what OS is installed on their new machines.
Where NPDs figures fall flat on their face is that they apparently didnt do a follow through with the consumers to see how many pulled out their XP disk and installed XP on their machines once they got them home.
As to how many versions of the OS should be available let me put it this way: There need be only one basic version - a simple OS that runs the computer which could, like Linux, be made available for free (not that it will ever happen).
Then you could have various modules that plug into the OS that consumers could purchase as they required or wanted ie if you want a Media Center you purchase the medis center plug-in module, if you want a server, you purchase the server module etc etc.
In this way the consumer could mix and match what ever he/she wanted and have the system that they need. (And before anybody jumps down my throat on this, let me suggest that Windows has always been compiled in modules that plug into the windows kernel and into each other)
The benefit for Microsoft in this would be that it would beat the EU and the US anti-trust laws because it would give the consumer a real choice.
But it will never happen because, like all corporations, Microsoft is basically driven by greed. So I guess we'll have to put up with as many flavours of Windows as Microsoft wants to release.
Posted by Golden Pirate | February 11, 2009 2:20 PM