Vista may cost MS 395m

Windows Vista's poor reception will cost Microsoft an estimated $395 million dollars over the next 12 months, says a new investment note by Bernstein senior analyst Charles Di Bona. The researcher predicts the sharp drop in revenue for Microsoft's fiscal 2009, starting in July, after a survey found mounting complaints about the new operating systems from companies concerned about problems with future upgrades.

Expectations that Vista will be used at the firms by 2011 has dropped from 68 percent in May 2007 to just 26 percent a year later; concerns about steep performance requirements has only 10 percent of those customers now planning to install Vista on existing systems versus 27 percent a year before.

Much of the resistance is believed to originate from a mixture of both actual and perceived flaws in Vista, including the higher system demands, compatibility with earlier third-party software, and an intrusive security policy. Few are also said to find the beneficial changes worth a significant upgrade and are instead placing some or all of their upgrades on hold until Windows 7, the next major release due in 2010.

"There aren't any features in there they find compelling -- even ones that haven't had bad PR," Di Bona says.

A recent investigation into Microsoft's results for the first quarter of calendar 2008 suggested that slow growth in the Windows division was behind PC sales benchmarks, hinting that more users at the time were buying computers preloaded with Windows XP or non-Microsoft platforms. A June 30th cut-off date will require most PC builders to drop Windows XP as a standard option on their systems and is anticipated to help Vista's adoption rates.

By Electronista Staff