SOFTWARE—Operating systems

Microsoft executive: Business adoption of Windows 7 to start in 2010

Microsoft executive Bill Koefoed was upbeat when answering questions about the software giant's business prospects at a technology conference on June 10.

Koefoed, who is Microsoft's general manager of investor relations, spoke at RBC Capital Markets’ 2009 Technology, Communications and Media Conference in San Francisco. He was generally positive about Microsoft's business outlook — especially with Windows 7 scheduled to ship on Oct. 22.

However, Koefoed dampened expectations about Windows 7 immediately boosting Microsoft's bottom line, saying, "Macroeconomics trumps all." The current economic climate is tough, with PC sales down 15 percent to 17 percent in the last quarter. Moreover, analysts have been predicting a depressed server market in the next couple of quarters, he added.

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Windows 7 arriving in October

Even though Windows 7 will appear in time for the holidays, information technology budgets for 2009 are fixed, Koefoed said.

"As a result, I don't think you should expect to see a lot of business adoption of Windows 7 probably until calendar year 2010," he said. Koefoed declined to describe Windows 7 pricing, which hasn't been announced yet.

The one bright spot for Windows sales this year has been netbooks, which are small, low-cost laptop-like devices. Initially, netbooks were viewed as Windows killers because all of them initially were sold running Linux. Now, Windows XP has a more than 90 percent attach rate globally on netbooks, Koefoed said. He added that Microsoft sees netbooks as incremental to its markets rather than cannibalistic — meaning that people buy netbooks in addition to PCs. All versions of Windows 7 will run well on netbooks, he added.

Independent software vendors, systems integrators and developers are currently trying out Windows Azure, Microsoft's cloud-based operating system. Koefoed said that meeting their needs is extremely important to Microsoft. He expected that Microsoft will share more information about Windows Azure at Microsoft's Professional Developers Conference in November.

Koefoed said Microsoft was pleased with its new search engine, Bing, and that the feedback from users has been good. He acknowledged the contributions of Qi Lu, president of Microsoft's Online Services Division, who was formerly vice president of engineering at Yahoo's Search and Advertising Technology Group. Lu brought additional technical support to the Bing team.

The battle with Google for market share is difficult and going to take many years, Koefoed said. He cited the cashback program, a discount feature of Microsoft's search engine, as one attempt to gain ground. Google holds the No. 1 position in search use, with 64 percent of the market, according to comScore's April findings.

On the virtualization front, Koefoed noted that Windows Server 2008 R2 includes a live-migration feature with Hyper-V. It lets IT pros move virtual machines across nodes with little to no downtime for end users. Live migration will make Microsoft's virtualization solutions comparable with those of VMware at a third of the cost, he said.

Microsoft is scheduled to release Windows Mobile 6.5 this fall, Koefoed said. He acknowledged Apple's gains with the iPhone, but said Apple had mostly taken market share away from Nokia. Microsoft expects to be competitive in the mobile market based on price, he added.

The last questions at the event were about Microsoft's financials. Koefoed said the company’s stock rose 10 percent after the company announced various cost-saving measures, including staff cuts. He said Microsoft was continuing to focus on efficiency, with plans for vendor rationalization and offshoring.

Microsoft has rationalized its capital expenditures, reducing them from $4.0 billion to $3.1 billion, Koefoed said. Other efficiencies include Microsoft's data-center modularization approach. The company has built some server farm capacity in advance of its needs but is moving more toward just-in-time deployments, he added.

About the Author

Kurt Mackie is senior news producer for the 1105 Enterprise Computing Group.

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