Vista's Consumer Rocket Ride to the Enterprise

[Editor's Note: This is the second of two posts looking at Vista adoption, one year after release to manufacturing.]

Microsoft may have had the right strategy for driving Vista enterprise sales, but bad timing. During the Vista business launch event on Nov. 30, 2006, Microsoft CEO Steve Ballmer spoke about the consumer-to-enterprise sales pull the company hoped to achieve with Vista:

"People will say, 'Come on,' to their companies, 'Let's go, let's move.' The companies will simultaneously be evaluating the value that we bring in communication and business intelligence, and security, and content management, and we think that's what creates the demand. Businesses have to pull and users and consumers have to pull, and it all starts with the basic end-user experience with Microsoft Windows."

At the time, Michael Silver, vice president of Gartner client computing, interpreted for me. "What Ballmer was saying is that they want to go back to the end-user pull kind of thing." Microsoft bet that productivity gains people would see at home would spur Vista adoption in the workplace. "End-user productivity is something difficult for IT to justify in their budgets," he explained. End-user demand could help make the justification.

The end-user pull strategy couldn't work a year ago, because consumers couldn't:

• Buy Vista for holiday 2006.
• Were first offered Vista during a relatively slow PC sales period.
• Rely on there being adequate hardware drivers or compatible applications.

In August, I described the Windows experience as "broken," because of problems in the supporting Vista ecosystem. In my testing, most Vista problems are a result of insufficient computing power or incompatible software applications or drivers. The most egregious problem: Vista computers shipped with puny, integrated graphics accelerators.

Increasing Consumer Adoption
But things are changing. Vista is looking quite ready for holiday 2008. Already, consumer adoption is picking up.

About two weeks ago, NPD surveyed 586 consumers about their PC usage. Based on the survey, the U.S. consumer Vista install base is 11.4 percent. The business install base—where consumers also use Vista at work—is 4.2 percent.

"Vista is touching more people than the install percentage numbers suggest," said Chris Swenson, NPD's director of Software Industry Analysis. By factoring in what he called the "experience index," Vista's footprint is larger. "As of October, approximately one in five of all U.S. respondents have access to at least one computer with Vista installed, either at home or work," he added. The percentage could be higher still when factoring schools, Internet cafes, libraries and other locations outside the home or office.

Swenson expects holiday sales to hugely increase the consumer Vista install base, approaching an estimated 15 percent in the United States. "I would estimate total worldwide Vista penetration [to be] at 8 to 9 percent today, jumping to the 12 to 13 percent range in January after holiday shopping."

Increased consumer adoption is the lever "that could help enterprise penetration, because if you use Vista at home you go and ask for it at work," Swenson said. "Users pull corporations that are dragging their feet somehow."

Signs of consumer-to-business influence has already started.

"Adoption to Vista has been slow with our customers," said Mytech Partners solution provider Lyf Wildenber. "However, over the past month we have seen a significant change in our customer base. I feel that this is attributed to users getting exposed to Vista outside of the business environment—new machines a home, etc."

The question: Will enough consumers ask for Vista at the office to really affect IT decision makers? The answer isn't simple, because of the aforementioned channel problems hurting the broader Vista experience. That said, Swenson's 20 percent number is pretty big for an operating system that has yet to be sold during the holidays. Vista's experiential reach could easily approach 30 percent, maybe more, following the 2007 holiday sales period.

But experience doesn't necessarily mean "good," which is where Vista has come up short throughout most of 2007. Part of the Vista experience problem is what Microsoft planned for versus where the retail and OEM channels ended up.

"This is an operating system for new hardware," said Michael Cherry, Directions on Microsoft's lead analyst for desktop and mobile. Cherry said that Microsoft gambled on what component prices would be and they really didn't come down enough in price.

"Vista is a thousand-dollar plus operating system for new machines, but people don't want to spend that much," Cherry asserted.

Based on testing, I would recommend 2GB of RAM as the sweet spot for memory and, ideally, at least 2GHz AMD or Intel dual-core processor for any system with something better than Windows Basic (aka, Vista Home Basic). But too many computers are underpowered. For example, Best Buy offers one $600 Toshiba laptop with 1.73GHz Celeron processor, 512MB of RAM and Windows Basic. Best Buy's Web site lists 47 notebooks with 1GB of RAM and 33 with 2GB or memory.

Some of these laptops are surprisingly good values, and weeks away from Black Friday and the big deals. Best Buy sells for $599 an Acer Extensa notebook with 1.5GHz Centro Duo processor, 15.4-inch display, 1GB of RAM, 200GB hard drive, double-layer DVD burner, a/b/g wireless and Windows Vista Home Premium. Memory is expandable to 4GB; I would double the RAM in that Extensa notebook to 2GB. But the integrated Intel graphics are woefully underpowered, and it's an endemic problem.

The Experiential Flaw?
The year 2007 could be called the year of the notebook, when portables finally overtook demand for desktops. OEM sourcing for notebooks favored integrated graphics as way of cutting component costs and better managing heat dissipation for lower cost. But the trend moved to desktops, which long had packed more graphics power than portables. Many OEMs also cut desktop component costs by shifting to integrated graphics from dedicated cards. The result: Most desktops and PCs under $1,000 don't get the most out of Vista's visual enhancements, nor are they really ready for forthcoming applications that tap into Windows Presentation Foundation.

The problem is bigger. Marketing materials or system specifications often don't clearly explain that graphics memory is shared with system memory. That Acer system lists graphics as being "up to 358MB." To the consumer or small business buyer, the 358MB could seem like enough. Typically, a system with this kind of graphics would score a Windows Experience rating anywhere from a 2.4 to a 3.4 (the scale goes up to 5.9)

"If the hardware's there, Vista is extremely great," said Steve Rubin, president of WorkITsafe. "If you get a nice new machine and it's configured correctly and Aero is there, it's pretty cool. We recommend to clients that there is at least 256MB of [graphics]."

For its part, Microsoft has used Windows Update as a mechanism for refining and improving the Windows Vista experience. In my testing, Vista performance, application compatibility and driver support is significantly better on an updated PC versus one setup with the operating system gold code. The experience is very different than Windows XP Service Pack 2. XP updates squash performance and security bugs without necessarily improving how the operating system runs. In my real world use—using no benchmarking software—currently updated Vista performs well on the right hardware.

As I write this, I am using a Gateway 295C Tablet PC with 2.2GHz dual-core processor 128MB dedicated graphics and additional 767MB shared memory (ATI Mobility Radeon HD 2300) and 2GB of RAM. Windows Experience Index is an acceptable 3.8. Running Windows Vista Ultimate, the Gateway Tablet PC gives a surprisingly good experience, even with 128MB of graphics. However, the user experience noticeably diminishes when set up with Vista gold code and no updates.

If I didn't have access to a Vista PC, I would ask my IT department for one. They might not listen to me. But when that consumer doing the asking is a corporate executive or CEO, IT departments tend to jump first and ask how high later. If consumers really can get that Vista "WOW" experience this holiday season, their influence could easily spur Vista business adoption. Service Pack 1 is close enough to set off a surge of business Vista upgrades in second or third quarter. I think the analysts now pushing their mainstream deployment predictions into 2009 are wrong—if Vista delivers a good holiday PC experience. If.

Related Posts:

• Linux Is No Vista Killer, Microsoft Watch, Nov. 8, 2007
• Vista: One Year Later, Microsoft Watch, Nov. 8, 2007
• Vista: None for All?, Microsoft Watch, Oct. 4, 2007
• Windows Vista Ultimate: Plus or Minus, Microsoft Watch, Sept. 26, 2007
• What Windows Vista Does for Me, Microsoft Watch, Sept. 14, 2007
• Yes, Virginia, There is a Vista SP1, Microsoft Watch, Aug. 29, 2007
• Don't Have a WOW, Man, Microsoft Watch, Aug. 28, 2007
• Broken Windows, Microsoft Watch, Aug. 9, 2007
• Were Vista Capable Stickers Incapable?, Microsoft Watch, Aug. 8, 2007
• Vista Pushes Volume Licensing, Microsoft Watch, July 26, 2007
• Microsoft: No Rush to Vista SP1, Microsoft Watch, July 19, 2007
• The Vista Contradiction, Microsoft Watch, June 4, 2007
• How Does Windows Vista Rate?, Microsoft Watch, May 20, 2007
• Is Vista One Step Ahead?, Microsoft Watch, May 16, 2007
• I Shacked Up With Windows Vista, Microsoft Watch, May 10, 2007
• Uh-Oh, Vista! PC Sales Are Normal, Microsoft Watch, April 11, 2007
• Stacking Vista Licenses Too High, Microsoft Watch, March 26, 2007
• Vista Launch Sales Falter at Retail, Microsoft Watch, Feb. 15, 2007
• Vista Security: A Petulant Child?, Microsoft Watch, Jan. 16, 2007
• The Wow Is When?, Microsoft Watch, Jan. 7, 2007