CIOs: Vista Will Need Heftier Hardware

Memory is the component CIOs say will most likely need upgrading (72 percent), according to the Merrill Lynch report. Average PC DRAM would increase from 703MB to 1.2GB for Windows Vista. Based on my testing Windows Vista, CIO expectations for memory and graphics (199MB) would be reasonably adequate for Windows Vista Business and marginally insufficient for Enterprise or Ultimate, depending on PC use. Better: 2GB memory and 256MB graphics.

Merrill Lynch's report resonates with a Softchoice Research study that concludes that half the average business PCs in North America do not meet minimum Windows Vista system requirements. By contrast, more than 70 percent of business PCs met requirements for Windows Vista, when it released.

Microsoft's minimum requirements are based on Windows Vista Home Basic (what I call Windows Basic): 800MHz "modern" processor, 512MB memory and DirectX 9 capable graphics processor. Part of the problem may be aging hardware. According to Merrill Lynch's survey, 48 percent of CIOs said their business did not deploy new hardware with "their previous Windows XP rollout."

Forty-four percent of CIOs told Merrill Lynch they would upgrade hardware concurrent with Windows Vista adoption.

Upgrades and heftier configurations are potentially good news for PC manufacturers and suppliers. Merrill Lynch concluded that "increased configurations will be a stable force on ASPs [average selling prices], which implies less than the typical rate of ASP decline." Merrill Lynch expects worldwide ASP declines to be least among consumers and SMBs (small and midsize businesses).

Merrill Lynch forecast PC ASPs of $767 in 2007 compared with $775 in 2006. Notebook ASP expectations: $1,083 in 2007, down from $1,160 this year.

Merrill Lynch surveyed 100 CIOs, 75 of them from the United States and 25 from Europe. Richard Farmer is the report's lead analyst.

With respect to sales, Merrill Lynch expects consumers and SMBs will upgrade at a faster clip than enterprises. Forecast for 2007: Worldwide year-over-year unit sales increase of 17.1 percent for consumers, 11 percent for SMBs and 3.3 percent for enterprises. The enterprise worldwide PC revenue forecast is a 1.5 percent decline. Matters change in 2008, when Merrill Lynch expects enterprise worldwide PC shipments to grow 11 percent year over year.

Again, more good news for PC manufacturers and suppliers: 19 percent of CIOs said that to support Vista they would accelerate PC purchases. In a surprisingly optimistic deployment response compared with some other analyst reports, 89 percent of CIOs said they expect to adopt Vista within 12 to 24 months after introduction. Based on other responses from CIOs, "adopt" must mean "start to adopt."

Twenty-two percent of CIOs believe the transition to Vista will be faster than than their previous rollout of Windows XP; 59 percent of respondents said "the same."

Assuming the latter proves true, the switch to Windows Vista would take about four years. For Windows XP, 55 percent of CIOs said their business switched to XP from an older Windows version within 24 months; 79 percent within 36 months and 93 percent within 48 months. Based on the responses, the best gauge for Windows Vista deployments is Windows XP adoption.