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WinXP saves the planet. Or not

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There are two lines on XP sales expectations, but maybe they're not so far apart. In the one corner we have Microsoft's execs, tentatively (or in the case of Bill, not so tentatively) suggesting that XP will save the world, while in the other the hard-nosed analysts predict a slow rollout in businesses, and that XP Home Edition sales won't be enough to revive the PC industry.

In all probability they're both right as regards numbers, and Microsoft may even be a tiny bit right as far as XP boosting the economy is concerned. An easier to use consumer-focussed platform that makes it simpler for you to plug in electronics gear certainly ought to help sell more of that gear; it won't do it to any great extent while everybody's feeling poor, but in the longer run it (and indeed the generality of more usable software) should have some impact.

But we should skip the 'save the world' hype for now, and concentrate on how eminently achievable Microsoft's ostensibly bullish sales targets are. The company line is that XP will take off more than twice as fast as Windows 95 did. Those of you who remember Win95 taking off will probably also recall that Microsoft's grip on the OEM channel, although strong, wasn't anything like as strong as it is now, that in many cases early machines shipped as dual install (so at first boot you could choose either Win 3.x or 95) and that some OEMs had even been threatening to run with OS/2 instead. They were only kidding, we'll grant...

Now there's less (hardly any) resistance to switching to WinXP, not actually a lot of reason for not doing so, so Microsoft can expect most new PCs to be shipping with XP rather than WinME or Win2k. The numbers involved are also a lot bigger than they were in 95, so even in a stalled economy slow replacement of the Win9x installed base with WinXP machines should chalk up numbers that at least look better.

Microsoft's own numbers (it's certainly not raking in any less per CPU for XP) should look better too, and it might be worth kicking in the thought that the limitations Microsoft has imposed on XP Home could induce power home users to spring the extra for XP Pro. In which case the figures will look better still.

Microsoft will therefore be in a position, some months down the line, to issue self-congratulatory statements about how well XP is doing, and how much the world loves it.

The analysts, on the other hand (you can get Gartner's take on it here), are right because XP on its own clearly won't get people to resume a debt-based spending frenzy. Nor, no matter how truly wonderful it is, will it get business customers to rip and replace their installed Win2k machines, or disrupt any Win2k rollout that is currently in progress.

They might as well go for WinXP in new rollouts, and they're going to have to figure out strategies for switching their 9x machines to XP over the next couple of years, but if they're currently cautious about new investment (which they are) they won't be doing any large-scale deployments they don't have to.

This case, like the Microsoft one, is the bleeding obvious. Businesses pay analysts money for telling them this, so go figure about the economy.

Against this backdrop the 'save the world' noises coming from Microsoft are no more and no less than useful little soundbites that pitch the company and its execs as concerned, worthwhile and productive citizens. They don't cost anything to say, and even if the economy looks pretty much the same this time next year, Microsoft will probably (you never know, one day the wheels might fall off the Investor Relations machine) be able to point to its own numbers as evidence of what's possible, or how much worse it would have been without Microsoft.

Yesterday the various execs will all have sounded the right notes as they handled the various launches. We particularly liked the Bloomberg Radio header to a 1 minute 34 second slot that said: "Shaw, Allchin on XP: "The country needs this right now" (we didn't listen to the clip), but obviously Bill's the guy who tells it like it is.

On how come the initial XP rollout will be incredibly fast, with a big spike upfront: "From consumers we have the most pre-orders ever on this, 100,000, so those are huge numbers, actually more than twice what we had with Windows 95... If you go into a store to buy a PC today, you'll see that those PCs overwhelmingly have XP. In fact, there are over 5 million PCs worldwide sitting in stores ready to go with XP. It's very key to this selling season that's coming along."

On its amazing affect on the economy: "There's a lot of progress that starts with Windows XP. Over this holiday, if you take all the different systems and peripherals, the total size, the total selling worldwide will be over $100 billion. The product fits in to the need to reenergize sales. It fits into the need to have this overall ecosystem tackle the new scenarios, whether it's cameras or DVD, all the different things you've seen. And it's an opportunity to drive communication things up to a whole new level; so a lot of new beginnings here as the computer industry moves into a phase assuming the much richer platform." ®

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