From the June 2009 issue of Treasury & Risk magazine

Hasta la Vista?

Sticking with the Windows XP system is becoming more complicated as the launch of Microsoft's newest operating system draws near.

While most businesses have soundly rejected Vista and are tenaciously hanging on to Windows XP until Microsoft comes out with a better operating system, the day of reckoning is approaching. The reason: Microsoft drove another stake in XP in April, when it officially ended "mainstream support" for the operating system. This means your warranty on XP is void. It also means that if you want support on XP other than basic patches or basic security upgrades, you'll have to pay Microsoft under a separate, "extended support" agreement.

Having an unusual problem with XP that you need resolved? That'll cost you. Need to add a new device to your system that isn't currently supported by XP? You'll have to pony up for that, too. Even worse, Microsoft may return the bad news that XP will never support a new device or new software application you've recently added.

It's a nasty jolt that has many companies reevaluating their commitment to XP and wondering whether they really can skip Vista altogether and simply wait for Microsoft's next upgrade, Windows 7--due out in the first quarter of 2010.

Not surprisingly, the case for hanging tough with XP is still very strong. Despite Microsoft's numerous attempts to convince businesses otherwise, Vista is still viewed as a flop. The initial assessments have stuck--that the operating system is slower than XP, features Draconian, productivity-sapping security provisions, and will not work with a raft of hardware and software.

Even today, fewer than 10% of all businesses in North America and Europe use Vista, while 71% of those businesses still swear by XP, according a January report from Benjamin Gray, an IT analyst with market research firm Forrester.

Indeed, business support for sticking with XP has been so strong that it has forced Microsoft to grant some major computer makers the right to continue to sell new XP PCs right alongside machines sporting Vista. Those same computer makers have also snagged the right to allow buyers leery of Vista to "downgrade" to XP on any Vista machine they buy.

Talk about a public relations nightmare.

The hold-out mentality has been buttressed by the numerous positive comments surfacing about the first beta version of Windows 7, released earlier this year.

The evaluation by Matt Hartley, a reviewer for Lockergnome, a highly respected industry insider publication, is typical. "After spending a few days with the Windows 7 beta, I will admit that overall, it proved to be vastly better than I expected on a few important fronts," Hartley says. "The biggest front proved to be the speed front. From installation to the first boot, the OS release did really well."

Businesses holding firm for Windows 7 also have the reassurance that the new operating system is actually an incremental upgrade of Vista. Microsoft has had a number of years to work out the flaws in Vista, and apparently the first iteration of Windows 7 should be the payoff, according to Michael A. Silver, an IT analyst with market research firm Gartner.

"More than five times as many users will run the beta version for Windows 7 as ran the beta for Windows 95," Silver says. "This enables Microsoft not only to receive more data, but also to characterize and classify the problems and work with vendors responsible for a large number of the problems to fix them before the product ships."

Another plus for playing coy: Microsoft plans to offer XP stalwarts an upgrade discount once Windows 7 hits the streets. Under that plan, XP users will still need to do a clean, complete install of Windows 7, rather than popping a disk in their PCs and letting XP auto-migrate to Windows 7.

But even so, XP users know they can save real money if they stay with what they have and upgrade only when Windows 7 becomes available.

Of course, there is some real risk involved for companies that stick with XP until the bitter end. One that's particularly nettlesome: While basic security patches for XP will still be available, other, less widespread security threats may be overlooked or simply ignored by Microsoft. Put another way, IT managers who opt for good old XP won't look like wunderkinds if a security breach brings down the entire company computer system--and no one can come up with a solution.

Another risk involves waiting too long to embrace the inevitable. Like it or not, businesses planning to stay with Microsoft are going to be running on a Vista-like system during the next couple of years, one way or another. Implementing Vista now, even as a pilot project, could make the migration to Windows 7 that much smoother and easier.

Vista champions also insist that migrating to Vista in preparation for Windows 7 may enable many companies to hold off on installing Microsoft's first crack at Windows 7 and instead wait for the first service pack for the operating system to be released.

Companies using this approach will be able to operate with a seasoned copy of Vista, allow pioneers to go through the inevitable growing pains anticipated with Windows 7's initial release, and then presumably easily migrate to a much more stable and refined version of Windows 7.

There's also that uncomfortable law of the jungle to consider. The fact is, Microsoft wanted XP dead years ago. All that time, users have been able to thumb their noses at a Vista upgrade only because reviews for the operating system have been so uniformly negative.

But the initial takes on Windows 7 are heavily in Microsoft's favor. That said, it may become increasingly harder to defy progress--defined by Microsoft as moving to Vista, and then on to Windows 7--if the reviews for the Windows 7 beta continue to be beaming. Bottom line: Business users that are happy with XP, do not plan on doing a major computer hardware upgrade during the next few years, and are willing to assume a prudent risk when it comes to a security vulnerability that may or may not materialize, will probably be staying with XP until Windows 7 delivers on its promise.

But those companies that plan major computer hardware upgrades in the near term, and would rather prepare for the inevitable move to Windows 7 than be last to the party, will want to think long and hard about whether to make an initial migration to Vista, or whether to be among the pioneering firms that adopt Windows 7 the moment the new software drops.


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