Feeds

Vista: Gates backs Ballmer against confused analysts

Only Disconnect

Boost IT visibility and business value

Bill Gates has defended sales of Windows Vista after Microsoft CEO Steve Ballmer chided analysts for being "overly aggressive" on the company's effect on the PC market.

According to Ballmer there's a "disconnect between what people think is the growth of the PC market and what they think is Vista growth. People have to understand our revenue models because I think some of the revenue forecasts I've seen out there for Windows Vista in fiscal year 08 are overly aggressive."

Expressing confusion when asked if Ballmer's comments indicated Microsoft was now being cautious, Gates said Windows Vista reviews had been "fantastic" and that retailers experienced a "very nice lift" in PC sales.

Microsoft's shares dropped almost three per cent last week after chief executive Ballmer said analysts are confusing growth of the PC market with Vista growth.

To be fair to Microsoft, some had jumped on early Current Analysis data showing a 67 per cent year-on-year spike in shipments of PC sales in the first-week of Windows Vista availability. The conclusion was that Windows Vista drove retail sales.

Microsoft derives more Windows client revenue from sales of PCs than from boxed copies of the operating system. So Windows Vista uptake depends heavily on PC shipments - especially in the consumer market.

NPD Group attributed January's surge in demand to some canny stock management by retailers who choked off inventory rather than stock redundant Windows XP PCs in the pre-launch days of January. The week before Windows Vista's launch saw a 59 per cent slump in desktop sales and a 20 per cent decline in notebooks - the first such drop in two years.

But who is to blame for overblown projections? As ever, Microsoft primed the pumps. Last year the company expected 400m PCs to be running Windows Vista 24 months after launch - compared to three years before Windows XP even half that on 210m.

Speaking at the January 30 launch, it was Ballmer who drew a connection between Windows Vista and PC sales. Windows Vista would perform "double " the business of Windows XP, he boasted "The opportunity we see to drive the technology industry, to drive PC sales, to drive new value from the consumer market to the business market is huge," he said.

Ballmer's words indicate a fundamental belief at Microsoft that Windows alone is sufficient to convince consumers and businesses to upgrade. Windows chief Jim Allchin in 2001 forecast - wrongly - Windows XP would lift flagging PC sales. In the case of Windows Vista, Microsoft is gambling on the six-year hiatus between Windows will persuade users into the streets.

Comparison between sales of Windows Vista and Windows XP are tricky, as they launched at different times of the year and Windows XP was available before official launch, unlike Windows Vista. On boxed copy, early indications are Windows Vista is behind Windows XP. Sales of Windows Vista were 59 per cent down on Windows XP in the first week, NPD said.®

Build a business case: developing custom apps

More from The Register

next story
Why has the web gone to hell? Market chaos and HUMAN NATURE
Tim Berners-Lee isn't happy, but we should be
Microsoft boots 1,500 dodgy apps from the Windows Store
DEVELOPERS! DEVELOPERS! DEVELOPERS! Naughty, misleading developers!
'Stop dissing Google or quit': OK, I quit, says Code Club co-founder
And now a message from our sponsors: 'STFU or else'
Apple promises to lift Curse of the Drained iPhone 5 Battery
Have you tried turning it off and...? Never mind, here's a replacement
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Linux turns 23 and Linus Torvalds celebrates as only he can
No, not with swearing, but by controlling the release cycle
Scratched PC-dispatch patch patched, hatched in batch rematch
Windows security update fixed after triggering blue screens (and screams) of death
prev story

Whitepapers

Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up distributed data
Eliminating the redundant use of bandwidth and storage capacity and application consolidation in the modern data center.
The essential guide to IT transformation
ServiceNow discusses three IT transformations that can help CIOs automate IT services to transform IT and the enterprise
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.