Microsoft responds to user demands

Microsoft turnabout on XP follows user demands

Gregg Keizer from ComputerWorld U.S. filed this report:

Microsoft’s decision Tuesday to allow low-cost desktop makers toinstall Windows XP Home on their hardware until June 2010 reverses amove it rejected just two months ago.

At the Computex trade show that opened Tuesday in Taipei, Taiwan,the company said it would allow computer manufacturers to pre-installWindows XP Home on what it called “nettops,” which it defined only as“low-cost desktops,” through June 30, 2010.

Tuesday’s decision follows an early April change in XP Homeavailability, when Microsoft postponed the retirement of theseven-year-old operating system by telling OEMs they could slap it onsmall and lightweight notebooks, dubbed ULCPCs, for ultra low-cost PCs,until the end of June 2010.

At the time of that announcement, however, Microsoft was adamantthat it wouldn’t consider making the same deal on low-cost desktops. Inan interview with Computerworld, Kevin Kutz, Windows client director,said that low-cost desktops would not be eligible for the extension.
Tuesday, a Microsoft spokeswoman explained the 180-degree turn as originating with customers and hardware partners.

“One thing Microsoft has heard loud and clear, from both customersand partners, is the desire for Windows on this new class of devices,”the spokeswoman said in an e-mail. “It is important to Microsoft thatthey meet the needs of their partners and customers and this is why theWindows XP Home offering is being extended to include net top devices.”

That explanation seems to fit the requirements spelled out byMicrosoft’s CEO in late April when he was asked if the company wouldpush back the general retirement of XP from its current date of June30, 2008. Speaking to reporters in Belgium, Steve Ballmer said, “Ifcustomer feedback varies, we can always wake up smarter.” Later,however, Microsoft said that Ballmer’s comments did not indicate ashift in strategy.

One analyst Tuesday said that Microsoft’s explanation made sense.“Customers and OEMS told them they needed to do this,” said MichaelGartenberg of JupiterResearch.

But Gartenberg also said that it was more than just feedback thatforced Microsoft to make the move. “For certain classes of hardware,Windows XP is actually the best fit,” he said. The lower-costcomponents required by low-cost notebooks and low-cost desktops —primarily their underpowered processors — preclude using Microsoft’snewer OS, Windows Vista. “These lower-powered processors are notsuitable for Vista, not now, not ever,” Gartenberg argued.
Microsoft has not defined either category — low-cost notebooks ordesktops — in more than general terms. Tuesday, for instance, when thecompany was asked what would prevent OEMs from installing XP Home intomore capable machines, the spokeswoman’s response was only: “Microsoftis working closely with our OEM partners to ensure they understand thespecifics of this Windows XP Home offering for netbook and nettopdevices.”

“This kind of underscores that for many people Windows XP is goodenough,” added Gartenberg, “and shows that for now, XP, for certainclasses of hardware, will be around for a while. Windows Vista has donewell, but it’s not perceived to have done well in the marketplace.Microsoft has had a hard time getting consumers on board Vista.”

Another analyst, however, didn’t see the addition of low-costdesktops to the XP extension as much of a change. “I don’t find thisnew exception to be inconsistent with the prior exceptions, but it isevidence that any time Microsoft sees a technology that is not readyfor Vista, they could use XP,” said Michael Silver, an analyst withGartner, in an e-mail.

Exactly, said Gartenberg. “Microsoft’s been forced to extend XP witha lease on life,” he said, referring to past changes in the company’sXP wind-down schedule. “And if customers demand it again, Microsoftwill have to capitulate again.”

Even the next version of Microsoft’s flagship OS, labeled Windows 7at the moment, may not be able to kill XP, said the analysts. “I’m notsure there will be anything magic in Windows 7 that will make it workbetter on a 512MB or 1GB PC,” said Silver. “The extension ofavailability until Windows 7 may more likely reflect Microsoft’s hopethat by 2010 or so, the economics of the hardware will improve to thepoint where Windows 7 is viable on that class of PC.”

Windows 7, which Microsoft briefly touted last week, is expected outin late 2009 or early 2010, months before the end-of-availability forXP on the low-end notebooks and desktops.
“While Microsoft needs to continue to streamline Windows to quell itsappetite for more resources, how skinny they can get Windows 7 is stillquestionable,” Silver said.

Gartenberg had other advice for Microsoft. He urged the company totake XP, overlay a Windows 7-esque user interface on the OS, then callit “something like Windows 7 Mobile or Windows 7 Nettop or whatever.”

And the developer should rethink its marketing strategy, Gartenbergadded. “Microsoft needs to think about ways to drive people to Vista,not force them away from XP.”

In related news, Taiwanese OEM Asustek Computer Inc. used the sameComputex trade show to announce it would launch the Eee Box, amini-desktop PC that apparently fits Microsoft’s definition of nettop.The Eee Box will come with either Windows XP or Linux and be pricedbetween US$200 and $300 in the U.S. And later this year, said thecompany’s CEO, Jerry Shen, Asustek will unveil an iMac-like all-in-onecalled the Eee Monitor.

Asustek is one of the major players in the low-cost notebook market, and is noted for the low-priced Eee PC .

There are now less than four weeks left before Microsoft shuts offmost OEMs from selling new PCs with XP and stops shipping the old OS toretailers.

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