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Could Windows 7 Bail Out the Tech Industry?

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As the economy sinks further and further into recession, the tech industry continues to feel the bite. With Circuit City closing, giants like Google and Microsoft laying off employees, and losses being reported across the board, the situation looks bleak. The likes of Merryl Lynch and GMC have received bail-outs from the government, but no such luck has reached Silicon Valley. Could the release of Windows 7, then, bail out IT?

According to everyone's best guess, Windows 7 is slated for release this fall. Though not groundbreaking, it will be faster, more secure, and more user-friendly than its big brother. Microsoft has been less than pleased with the rate of Vista adoption and is eager to get users away from XP.

According to the latest figures, 72% of Americans are running XP, compared to 18% for Vista. Home users make up the bulk of the latter, while the former is mostly comprised of business users unwilling to make the switch. Coincidentally, the majority of computer and software sales are made to businesses, but it is this group that is most stubborn in upgrading. Corporate America wants stability and security in its computers. After all, if things don't work then money is lost. They generally wait until a product has matured before upgrading.

The problem is, by the time the CPA down the street is ready to upgrade to Vista, Windows 7 will be available en masse. The fact of the matter is XP has been around since 2001, a time when computers shipped with Pentium 3 processors and 256 MB of RAM. The too-stubborn-for-Vista crowd will have to upgrade to something more modern eventually, and Windows 7 will be the time for them to do so. Though a new operating system, it is just an improved version of Vista with more stability and ease of use. Business users will realize that it combines the new features of Vista with the best of XP and flock to upgrade in droves. The same thing happened in 2001 — during a recesssion, also — when Windows 98 users skipped over Windows ME and upgraded to XP.

New versions of Windows always provide a boost to the tech industry. When Windows 7 comes out, many of those still running XP will want to either upgrade their hardware or invest in new systems. Microsoft will not only get a huge boost, but HP and Dell as well. This will also benefit retailers. The likes of Best Buy and Office Depot will catch the fruit as it falls from the trees, as will online merchants like CDW and Newegg.

Joe the Plumber will contribute his share, too. Many home users are still running XP, and those who so hastily upgraded to Vista will want Windows 7 simply to have the latest and greatest. There will be great demand for the new operating system at home.

Move further down the chain to software and hardware developers. Video cards, peripherals, and the like will all need new drivers to work with Windows 7. That just saved thousands of jobs. Meanwhile, programmers will be needed to ensure existing applications are compatible with the new operating system. Score two for geeks.

Next, consumers and businesses will need help transitioning to the new Windows. Home users will buy books and seek out technicians to help them make the switch. Computer companies will need to take on extra support staff and create hotlines for the switch. Businesses will need their IT departments more than ever, stopping or delaying thousands of lay-offs. Hundreds of millions will be invested in training seminars.

Perhaps too much of a utopia is being envisioned here. While it is undeniable that Windows 7 will provide some boost to the industry, what if it is a total flop? No one will know its viability until it has been installed and run on millions of computers. What if post-Vista consumer confidence is so low that few want to take the plunge? These questions will only be answered upon the product's release.

Finally, what if businesses and home consumers don't upgrade because of tough econonic times? The solution to the problem could be stopped in its tracks by the problem itself. Home users will be the most apprehensive about upgrading. So long as businesses remain profitable and Windows 7 proves viable, however, Corporate America will upgrade. Companies that have been holding out with XP will hit the end of the road and be forced to upgrade. Vista was not deployed for the sake of stability and compatibility, but XP's security vulnerabilities haven't vanished, either.

Everyone in technology — from the guy down the street fixing computers to Dell to Microsoft — is set to benefit from Windows 7. While the magnitude of this boost is yet to be determined, Redmond is without contention the industry leader, like it or not. Their success has a major impact on the entire sector, and the success of a new operating system for them would be a one-up for just about everyone else. Windows 7 very well could be the bail out the tech industry needs.

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About Daniel Foster

  • Since when does a for-profit company not release a product to make money? Sure, Microsoft wants to restore its reputation, but its sole goal is to make money. If money isn’t their motive, then what is?

    Vista was supposed to be “easy” to use, as was Me. Yet people had problems switching to both.

    Applications may be compatible out of the box, but there will be bugs to be fixed and tweaks to be made. XP was built off of NT’s core, but does everything that works on Windows NT necessarily work XP?

    You pretty much missed the whole point of my article. There will be a large chunk of XP users moving to Windows 7 if it turns out to be a success, and this is where the training will come in. There will be more demand for legacy hardware drivers and applications that weren’t updated for Vista will be for Windows 7 if enough people adopt it.

    I agree my article is speculative, and I admit to that fact in my writing and even show how I could be wrong. I even explains why I believe Windows 7 will sell well. You should have looked over my piece more carefully.

  • Austin Davis

    But Microsoft isn’t the sadistic company that is only releasing a product to make more money like you’re envisioning. Hardware will not need new drivers, as Windows 7 is designed off the same core as Vista. Most of the hardware that works with Vista will work with 7. This goes for applications as well. The system is designed for users to have an easier time using it, thus reliving the need for all the “training” you think people are going to need.

    You should do more research into how technology companies work before making baseless predictions that, as you even claim, are totally based upon the fact that Windows 7 sells well. You should have analyzed how viable THAT prediction is first.

  • i would substitute the word ‘smart’ for ‘stubborn’. a lot of business didn’t upgrade because of the extra expense, and that expense is not just the cost of the upgrade.

    if you’re in the software development business and your target market is other businesses, then you’re writing for xp.

    surely it’s a chicken & egg sort of thing but companies did not upgrade for that reason.

  • Brian aka Guppusmaximus

    *Oops* I forgot to mention the militant-like licensing policy as well…

  • Brian aka Guppusmaximus

    Nice Article…

    I sure hope Microsoft has done some decent compiling on Windows 7 or their not going to be able to help themselves as a company never mind the economy. Only 18% consumers use Vista due to the horrible compatibility issues in the beginning and the ridiculous amount of resources it takes to run the OS properly which was underestimated by Microsoft’s minimum requirement stats. Oh and of course the exorbitant price for each new release.

    Personally, imho, with such viable software solutions that are also free for browsing(Firefox),offline e-mail application(Thunderbird),word processing(Open Office) & the plethora of cool software that Google releases,I think MS will be in a lot of trouble if another company releases an inexpensive OS. It may not be next year or even possibly 5 years(though 5 years is a long freakin time in the tech world) but I think Google could bounce back with an OS that could set a precedence.