Microsoft cautiously optimistic on Windows 7 business uptake

The real start to the upgrade cycle will be 2010

Despite Thursday's Windows 7 launch and hoopla, Microsoft remains cautious about corporate uptake of the operating system and believes 2010 will be the real start to the upgrade cycle that could run into 2012.

Chris Liddell, Microsoft's CFO, said on the company's earnings call that Microsoft is getting positive feedback from companies on Windows 7.

That information would seem to align with numerous analyst surveys, such as a recent report from Forrester Research that shows 66 per cent of corporations plan to upgrade to Windows 7. In that report, however, nearly 50 per cent said they did not have definite plans as to when that upgrade would happen.

Liddell, however, said Microsoft is building its own model.

"We are staying reasonably cautious about the [business PC] upgrade cycle; certainly we expect it to begin next year, but we talk about it spreading maybe over a couple of years so I would like to think that we would start to see much better business PC numbers year-over-year next calendar year," he said.

Liddell was optimistic especially in the light of the company's 2010 fiscal first quarter, which showed only a 4 per cent decline in revenue year-over-year when adjusted for $US1.47 billion in deferred revenue mostly due to advance sales of Windows 7.

Liddell was congratulated repeatedly on a fine quarter by financial analysts asking questions on the earnings call. Windows license sales were the strongest in Microsoft's history for a single quarter, according to Bill Koefoed, general manager of investor relations at Microsoft.

But Liddell said the big variable for PC growth is tagged to businesses upgrading their machines.

"[Business PCs] have been a significant negative in my mind," he said. "That has decreased double digits over most of the last few quarter and dragged down the numbers, but that can't last forever. Eventually those PCs wear out and have to be replaced."

Overall, IDC says PC shipments dropped year-over-year by 6.8 per cent in the first quarter and $US2.4 percent in the second quarter. The third-quarter numbers reported last week showed shipments were up 2.3 per cent.

Microsoft is banking on that trend to continue and for corporate users to be in the driver's seat. "We feel pretty good about what PC demand is going to look like in the next calendar year," Liddell said

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags MicrosoftWindows 7

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Fontana

Network World
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?