Customer upgrades to Vista no sure thing

Now that Microsoft Corp. has finalized Windows Vista's six editions, the challenge at hand for the company is to encourage customers to upgrade once the new OS is available.

And that challenge is nothing to sneeze at, customers and analysts said. According to them, Microsoft faces a variety of hurdles that could deter upgrades to the new OS, which is expected to ship toward the end of this year.

One major roadblock might be the sheer number of editions of Vista expected to be available at launch, said Joe Wilcox, analyst with JupiterResearch. Microsoft's last major Windows upgrade, Windows XP, launched with only two editions -- Windows XP Home and Windows XP Professional, he said. XP is now available in five editions, but the others -- Media Center Edition, Tablet PC Edition and Professional x64 Edition -- were added after launch.

Microsoft already has identified what it calls a "good enough" problem among customers that purchase Windows' client version, Wilcox said. That is, customers think the version of Windows they currently have is good enough for what they want to achieve with their computer, so they see little or no reason to upgrade to the latest and greatest OS. Complicating matters with several editions is not the ideal way to inspire customers to upgrade, he said.

"Microsoft’s best marketing for Vista will come from simplicity -- making the value of Vista as easy to understand as possible, so people can look and say Vista is a lot better than the version they have now," Wilcox said. With six versions of Vista expected to be available at launch, he wondered, "Are there too many of them to communicate the value of Vista?"

Some of the editions also pose their own unique upgrade issues for the vendor. A change in Microsoft's enterprise licensing strategy that will come with the new OS already has inspired ire among customers. When Vista is released, only customers with Microsoft volume licensing agreements -- either an Enterprise Agreement or a Software Assurance (SA) contract -- can purchase Windows Vista Enterprise.

Andrew Hintz, information technology director for the California Democratic Party, said that his organization probably will only purchase Vista in its Business edition if they acquire new hardware, but not upgrade to the OS for machines currently in use at the organization. Still, he said Microsoft might win over more small and medium-sized businesses (SMBs) to its Enterprise edition if the OS was available without license restrictions.

"Many small and medium businesses will probably acquire Vista like we will: with new hardware purchases without a Software Assurance or Enterprise Agreement with Microsoft," Hintz said. "If the Enterprise edition was available as a low-cost add-on to PCs from Dell or HP, then we might be tempted to purchase it."

Robert Bagamery, a system support engineer for Canadian utility company Manitoba Hydro, said Vista's revised enterprise licensing, along with hardware upgrades that are required to get the full benefits of some of Vista's new features, are hardly incentive to upgrade. Furthermore, there are now a host of lower-cost alternatives, such as OpenOffice and Mozilla Thunderbird, to the application for which most businesses purchase Windows -- Microsoft Office, he said.