Windows XP may be one of the most reliable products Microsoft has ever produced, but it is not all things to all people, according to a variety of users and analysts polled Oct. 25, the day of the operating system’s official rollout.

Whether or not users will buy it now largely depends on whether they are in large corporations, medium-size companies or the home, and where they are in the lifecycle of the OS they currently use, according to users and industry insiders. For remote users, XP offers some compelling reasons to upgrade, they said. For larger installations, the business case for upgrading is harder to make.

For users of all stripes, stability is the main attraction of the software, according to the majority of those questioned at various launch venues in London and New York.

“It simply does not crash the way older versions used to,” said Gary Dimenstein, an XP beta tester who manages Gary’s Place, a family-run diamond and jewelry wholesale business in New York. Dimenstein, who attended the launch event in New York, uses Microsoft Office to help him run his business. “For performance and reliability alone, it’s worth the upgrade.”

Network-oriented diagnostics, combined with better device-driver support, make a compelling case for remote users to upgrade to XP, according to Lawrence Taylor, director of New York-based Cybersmith Inc., a network installation and PC troubleshooting company.

A network manager can control remote PCs and authorize user activity over a network connection, Taylor pointed out. “The system also automatically recognizes more devices; with earlier versions of Windows, you had to add on drivers for a lot of different devices,” he said. “For someone in my business, it’s worth the upgrade,” he added.

However, for larger installations of users, making the case for XP might be difficult, some industry insiders said.

“It looks more stable, yes – but there is a difference between one user upgrading and a big group of users,” said Herbert Deleon, a manager at Alpha Sum Business Machines in New York. Alpha Sum specializes in installing turnkey PC systems. “To tell you the truth, for an installation of 100 users, for instance, you have to give them a very good reason to spend money to upgrade, and I’m not sure saying ‘more stability’ would be enough.”

It will take more testing before Deleon can decide what to tell large groups of users, he said. “There are lots of bells and whistles I want to go home and play around with…no doubt the Internet communications features look good,” he said.

For some corporate users, the fact that XP has better backward compatibility with older Windows applications than does Windows 2000 may make a good case for upgrading, according to Al Gillen, research manager for system software at International Data Corp., a market research company based in Framingham, Mass. (IDC is a unit of International Data Group Inc., the parent company of the IDG News Service.)

“A lot of companies have applications they wrote in-house on older version of Windows, and these may not run well on Windows 2000,” he said.

For large groups of users whose network managers have stabilized their systems, however, XP might be a tough sell if they are in the middle of the lifecycle of their current Windows OS – whether it be Windows 98, NT, or even in some cases Windows 95, according to Gillen and other analysts. “Windows XP is probably the best consumer product Microsoft has ever put out, but aside from back compatibility it’s hard to name a really compelling second feature that has widespread appeal for most corporations,” said Gillen.

In terms of remote control features, companies need to have XP on both client and server machines to run diagnostics tools, and there are already products such as Symantec Corp.’s PCAnywhere on the market that do the job well, Gillen said.

While the consumer arena will see quick uptake of XP Home, Windows 2000 will continue to be the leading OS for the business market in 2002, according to a forecast published Thursday by Dataquest Inc., a unit of Gartner Inc. Although 87 per cent of Windows-based PCs purchased in 2002 will have XP Home, XP Professional will only account for 16 per cent of new Windows PCs in companies next year, the company said.

Even some Microsoft business partners have doubts about wholesale corporate upgrades.

“We are in the process of installing Windows XP on all of the computers in our call centre, about 800 in total,” said Dana Cuffe, chief information officer for Egg PLC, a U.K. online financial services company and one of the partners speaking at the London launch of Windows XP. Cuffe added, however: “We will also be upgrading all of our PCs to XP, throughout Egg, but there is no timeline for doing that just yet.”

Speaking with IDG News Service in a telephone interview after the launch, Cuffe said: “Egg wasn’t just looking at XP as an operating system. Features like Messenger and Alert and all of that added stuff was what really piqued our interest. To be honest, if we were looking at it purely as an operating system, we probably would have waited (with any sort of upgrade.)”

In the end, for some users, a compelling reason to upgrade to XP – either the Home or the Professional version – may be that they will not have much of a choice, for one reason or another.

“Consumers won’t have much of a choice anyway,” said IDC’s Gillen. “Try buying anything but XP Home (for the consumer market) in stores in a few months.”

As for corporate users, Microsoft is in a sense forcing the issue with its new licensing regimen, which requires many corporate users to upgrade to Windows XP if they want to benefit from discounts in its new licensing scheme.

For example, if customers join the Microsoft Upgrade Advantage program before Feb. 28, 2002, they pay a retail price of US$292 per user, per year, and receive the rights to an Office XP Professional upgrade and up to two years of Software Assurance benefits. After February, however, companies will need to buy new Office XP licences for US$454, and spend even more money for the Software Assurance program.

“The most compelling reason to upgrade may be the licensing issue,” Gillen said.

(Additional reporting by Laura Rohde in London.)

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