The Windows Observer--Microsoft Completes the 'Triple Launch'

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Volume 3, Number 42 -- December 6, 2006

Microsoft Completes the 'Triple Launch'

Published: December 6, 2006

by Alex Woodie

Microsoft last week celebrated the launch of Windows Vista, the 2007 Office system, and Microsoft Exchange Server 2007, the first so-called "triple launch" undertaken by the company. Despite some technical glitches during the event, Microsoft carried out its promise to ramp up the hype to a level befitting what it considers as the most important new products in its 30-year history. How well Microsoft has timed the delivery of the oft-delayed operating system with the PC upgrade cycle, however, is a different story.

Steve Ballmer, Microsoft's chief executive officer, kicked off the festivities at the NASDAQ MarketSite in Times Square, where he rang the opening bell alongside Microsoft CFO Christopher Liddell, NASDAQ president and CEO Robert Greifeld, and MTV Networks president and COO Michael Wolf. It was a significant moment for Microsoft, as the day coincides with the 20th anniversary of Microsoft's initial public offering on the NASDAQ. The NASDAQ's popularity among technology companies has paralleled Microsoft's vast success.

Ballmer then hosted a press conference that was Webcast around the world. While the Webcast was not available for viewing immediately after the event, as it was supposed to be, it can now be watched at www.microsoft.com/events/executives/webcasts.mspx. Interestingly, at one point the links to the Ballmer Webcast erroneously led viewers to a Webcast titled: "A Forum on Gender and TKA: Science or Marketing?" Apparently, technical glitches are still inevitable in this new Vista world.

To put the significance of the day in perspective, Ballmer reiterated that it's been more than a decade--not since Windows 95 and Office 95--that Microsoft had launched two major products simultaneously. The fact that Microsoft has conducted a triple launch--not to mention introducing about 30 other products, such as Office SharePoint Server 2007 and System Center Operations Manager Enterprise 2007 and many others--demonstrates the significance of this day in Microsoft's history, Ballmer says.

However, there would have been no triple launch if Microsoft had actually delivered Vista on time, which would have been two years ago. All told, the development of Windows "Longhorn"--as Windows Vista was previously code named, and the next version of Windows Server still is--took five years and cost $7 billion.

Despite the tardiness, Ballmer expects the new products to follow in the footsteps of other major Windows releases and transform the way people use computers, including the introduction of TCP/IP support in Windows 95 at the dawn of the World Wide Web, and support for mobility features in Windows XP that allows people flexibility in where they compute. With Windows Vista and Office 2007, it will be reliance on XML and Web services that will change what computers can do for people.

Just as Windows 95 ushered in an era of unprecedented technological transformation, the Windows Vista generation of products will change the world in new ways, according to Ballmer. "In many ways, it was the launch of Windows 95 and Office 95 11 years ago that signaled the start of this transformation," he wrote in an e-mail published on the Microsoft Web site. "But while we like to think that the digital revolution has already happened, we've barely scratched the surface. We still rely too much on paper documents to share ideas and paper forms to conduct business. That's about to change . . . New versions of Windows and Office will play a central role in this ongoing transformation."

Four Ways Business Will Benefit

Microsoft is touting four major ways the new products will help the way people work. First, Microsoft says the new products will simplify how people work together. A key new capability in this regard is "unified messaging" in Exchange Server 2007 and Outlook 2007, which will bring together e-mail, instant messaging, voice, video, and Web conferencing, along with support for RSS, blogs, "wikis," and an automated alert system.

Second, Microsoft says the new products will make it easier for people to find information, and to improve business insight. Vista boasts several new search features, including "live icons" for previewing files and the new "search folders," which organizes files based on their content and not their file name. The products will also boost business intelligence through new features like personalized "report centers," scorecards, dashboards, personalized portal sites, and server-based spreadsheets. Use of XML and Web services across the closely integrated product line is also expected to improve access to information, although it won't deliver the type of improvements in search that users initially expected in Vista as a result of the removal of the new XML-based Windows File System (WinFS) from "Longhorn" more than two years ago. (WinFS will still be delivered, according to Microsoft.)

The third key area is helping users protect and manage content and documents. This is where the new Open XML file format, which will become the default for Word, Excel, and PowerPoint files, will come into play by making it easier for users to apply workflows and other types of rules, such as security, retention, and compliance policies, to e-mails and Office files managed with Office 2007 and Exchange Server 2007.

Lastly, Microsoft aims to reduce IT cost and improve security with the new products. Key new security features include User Account Control (UAC), which will reduce users and applications from running with administrator-level privileges, and Network Access Protection (NAP), which will prevent unpatched PCs from joining a network. Vista is also expected to make it easier to encrypt data than past releases, and won't require as many restarts as past releases, according to Microsoft.

Kirk Koenigsbauer, general manager of the Office Server team, highlighted the importance of Office SharePoint Server 2007 in a PressPass Q&A on the Microsoft Web site. "Office SharePoint Server 2007 . . . is really the glue that holds together Microsoft's overall investments in technology for content management, business intelligence, collaboration, and other key business areas. We have a number of partners creating specialized applications to help manage workflows, reporting, forms and search capabilities, among others," he says.

Rallying the Troops

With so many new products becoming available over the next 60 days, it was imperative that Microsoft rally its huge network of partners, which numbers 640,000 partners and more than 35 million developers, according to the company. More than 1,000 software vendors already support the Office 2007 system, with another 3,000 vendors in the final stages of development, according to Ballmer. What's more, 100,000 partners have completed training on the new products, a number that's expected to grow to more than 1 million by the middle of next year.

All told, Microsoft's new products are expected to generate more than $250 billion for its partners over the next 12 months, the company says. "No set of product releases in history has ever offered this level of opportunity for the industry as a whole," Ballmer said. Considering the entire IT ecosystem is generally expected to involve $1 trillion in spending per year, it's safe to say the impact of the new products will be felt far and wide.

Among the partners joining in the Vista parade was IBM, the company that invented the PC several decades ago. Last week, Big Blue also launched a new product called Tivoli Provisioning Manager for OS Deployment that is capable of completing an enterprise-scale deployment of Vista to 100 PCs in under an hour.

Sales Forecast

While businesses got their hands on Windows Vista starting November 30--two months before Vista becomes available to consumers, on January 30--the majority of the sales of Windows Vista over the next year will come from the consumer market, predicts IT analyst IDC. "After a long wait, the adoption of Windows Vista will take place almost immediately among consumers, while businesses will follow a decidedly more conservative adoption curve," says Al Gillen, a research vice president for system software at IDC.

IDC also provided a breakdown on how the individual Windows Vista products will sell. The Windows Vista Home Basic edition will account for two out of three Windows Vista purchases by consumers in 2007, while Windows Home Premium will capture 30 percent of the home market. On the business front, Windows Vista Business edition is expected to account for 82 percent of Vista sales to businesses next year, while the remaining 18 percent will be Windows Vista Enterprise.

While large enterprises can now get their hands on Vista, they likely won't start any large Vista deployments until they have completed testing the new operating system, which will take 18 months, according to some analysts. Application compatibility with Vista will be a major hurdle for large business users, as is typically the case with any large OS upgrade. In many cases, companies will wait until the inevitable bugs are worked out with Windows Vista Service Pack 2 (SP2)--likely to ship in 2008--before deploying Vista.

Another factor likely to affect the uptake of Vista is the PC upgrade cycle. Because new operating systems are usually purchased in conjunction with new hardware, Vista sales will be closely tied to new PCs. Unfortunately for Microsoft, we're currently at the tail end of a PC upgrade cycle, which typically last three to five years, and analysts don't expect the next one to begin until 2008.

Windows Vista will be available for download by organizations with volume license agreements with Microsoft starting tomorrow; it will be available for purchase on CDs starting in January. Initially, the new operating system will be available in English, German, French, Japanese, and Spanish, but by next April, it will be available in more than 40 languages, the most for any version of Windows. Availability of the Office 2007 closely mirrors Windows Vista.

Exchange Server 2007 will be available for download sometime in December, with media availability in February 2007. The new release of Exchange Server will support 10 languages.