How New a Day?

"Its an exciting thing to finally be here, and that's probably all I'll say about the past," Ballmer told a group of reporters and analysts this morning at NASDAQ. Ballmer raised his voice to emphasize "finally."

Microsoft released Exchange Server 2007, Office 2007, SharePoint Server 2007 and Windows Vista under the slogan, "ready for a new day." That new day comes with a past filled with Windows Vista product delays and abandoned features. The day also opens to uncertainty when businesses will realistically start deploying the new products. Even Ballmer expressed caution about adoption.

Analysts agreed. Simon Yates, a Forrester research director estimates there are 95 million business PCs in the US. In 2007, about 20 million would be retired and as many as a quarter would have Windows Vista. "We expect about 3 to 5 million business PCs with Windows Vista by the end of [2007]," he said.

About 40 percent of US businesses would begin Windows Vista deployments by the end of 2007, Yates explained. Timing works against Microsoft and its partners. "We're at the tail end of the PC refresh cycle," Yates said. Forrester doesn't expect another buying cycle until 2008. "For 2007, new PCs are not top of IT [budget] priorities," he emphasized. Based on Microsoft financial statement, most businesses buy Windows on new PCs.

Still, starting tomorrow select businesses can order computers from Dell. Today's launch made the new Microsoft software products available to customers purchasing through volume licensing. For businesses providing their volume-license custom images, Austin-based Dell would configure and "load Windows Vista on Dell Optiplex desktops, Latitude notebooks and Precision workstations," said Brad Anderson, general manager of the Product Group. "That's a huge advantage that Dell brings that some channel-based models cannot," he emphasized.

Target: The End User
A somewhat subdued Ballmer--at least compared to some other events--explained that Microsoft had changed its focus for this release cycle. He said that everything starts with the "basic end-user experience." The approach could be essential to driving business adoption.

When Microsoft last launched its flagship products together--Office 95 and Windows 95--they benefited from a growth market, where many businesses were buying new PCs and accompanying software. Office 2007 and Windows Vista launch at a time where, at least in the US, most businesses have deployed older versions of the products and are satisfied to keep using the versions that they have.

"What Ballmer was saying is that they want to go back to the end-user pull kind of thing," said Gartner analyst Michael Silver. New Office and Windows features, particularly user interfaces could start employees asking IT organizations for upgrades. Without those demands, many businesses might otherwise take a slower upgrade path.

"End-user productivity is something difficult for IT to justify in their budgets," Silver explained.

If there is a new day for business, then, it will start with people using the products at home and demanding them at work.

Ballmer said that Microsoft would spend "hundreds of millions of dollars," on marketing the new products. The amount will be "more than we spent on Windows 95 and Office 95 [marketing]."