Windows 7 Will Throw Down, But Not Just Yet

The Windows 7 trumpets are blasting with gusto, with Steve Felice, president of the small and medium-sized business (SMB) division of Dell, claiming that Microsoft’s new operating system is fueling a surge in demand for PCs, according to Computerworld.  “As soon as Oct. 22 hit, both our consumer business and our SMB business had a very healthy increase in demand,” Felice is quoted as saying. Meanwhile, David Coursey reports that with Vista on the sidelines and a well-reviewed new OS, Microsoft CEO Steve Ballmer “has a new ‘f’ word” to describe Windows: ‘Fantastic.'”

These comments fall in line with recent lofty predictions from Dell founder Michael Dell about Windows 7 driving the PC market forward. But is that, in fact, true? Moreover, is it not still too early to measure the operating system’s success?

At a Churchill Club event that I attended in Silicon Valley in October, Michael Dell said that many businesses were running Windows XP, which is eight years old, and that Windows 7 would usher in a major upgrade cycle. The fact that Dell just missed profit estimates amidst declining market share has nothing to do with Windows 7, of course, but there are some signs that a truly major upgrade cycle toward the OS hasn’t yet happened.

While research shows that Vista users are upgrading to Windows 7, keep in mind that Vista has only 30 percent market share after several years in the wild. Windows 7 is not replacing the huge installed base of Windows XP at anywhere near the rate that it’s replacing Vista.

The Wall Street Journal estimates that some 30-40 million copies of Windows 7 have sold since its October release, and most estimates put the operating system’s market share at about 4 percent. These numbers are nothing to shake a stick at (GigaOm Pro, subscription req’d), and I agree with Michael Dell that Windows 7 will spark a major upgrade cycle — eventually.

In the meantime, however, we are in a period of relative limbo in the PC buying cycle. Holiday shopping hasn’t taken off yet, and, for safety reasons, businesses tend to wait and watch whenever a brand-new version of Windows is released before implementing widespread adoption.  Hardware incompatibilities, driver issues and many more things get resolved in an operating system’s first months, prompting many businesses to sit on the sidelines.

Historically, January has a much higher PC-buying profile than October and November do, and by that point holiday shopping numbers for Windows 7 will have started to roll in. Indeed, it will take a few months before we have truly accurate numbers for Windows 7 adoption, but I don’t doubt that it will eventually spark an upgrade cycle that — love or hate Microsoft — will benefit the tech industry.

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