All Things Digital

You wouldn’t know it from the protests over Microsoft’s decision to retire Windows XP at the end of June or the PC users exercising their Windows Vista downgrade rights, but Vista is actually selling quite well. Microsoft (MSFT) Chairman Bill Gates said today that sales of Windows Vista have reached 140 million copies worldwide. “That’s a very rapid sales rate,” Gates explained.

Sure is. Especially for an operating system that’s met with such a middling reception. That said, you’ve got to wonder if the 140 million copies to which Gates refers are deployed copies or licenses sold. Because if it’s the latter, the number would be decidedly less impressive. It wouldn’t really account for volume licenses sold to corporate customers, copies pre-installed on OEM computers, and copies downgraded to Windows XP. And Gates has made exactly this type of oblique statement before, the last time Microsoft announced Vista sales figures.

XP will hit an end-of-life. We have announced one. If customer feedback varies, we can always wake up smarter, but right now we have a plan for end-of-life for new XP shipments.”

–Microsoft CEO Steve Ballmer, April 24, 2008

Well if this doesn’t count as the sort of feedback that would cause Microsoft (MSFT) CEO Steve Ballmer to wake up smarter, I’m not sure what does. Heeding the cries of their Vista-averse customers, Hewlett-Packard (HPQ), Lenovo (0992.HK) and Dell (DELL) are now offering customers who purchase machines running the Business and Ultimate flavors of Microsoft’s new state-of-the-art OS the chance to replace it with Windows XP Professional. And they’re doing it in a way that will keep Windows XP around well beyond the June 10 deadline Microsoft has set as the end of its retail sales.

How? Well, remember that “downgrade” to XP option Microsoft quietly offered PC makers last summer? The one that Mike Nash, corporate vice president of Windows Product Management, said was designed for “customers who need a little more time to make the switch to Windows Vista”? Well, HP, Lenovo and Dell are exploiting it to their full advantage. HP and Lenovo are shipping XP Pro recovery disks with qualifying Vista machines. Dell has gone one step further and volunteered to exercise those downgrade-to-XP rights on their customers’ behalf, installing Vista on their new machines and then purging it and replacing it with XP.

All of which, seems a bit ludicrous, really. Why bother with such a charade? Perhaps because every downgrade to XP counts as another copy of Vista sold.

Yeesh. Microsoft (MSFT) has extended the availability of Windows XP nearly as many times as it extended the ship dates of Windows Vista and Office 2007. The company had planned to cut off XP sales through the retail and original equipment manufacturer channels on Jan. 30, 2008, one year after the Vista’s debut. But the poor reception given the new OS and “feedback” from XP advocates, gave it pause to reconsider. So Microsoft adjusted the deadline to June 30, 2008. Now it’s planning to to adjust it again. Sources close to the company tell Infoworld that Microsoft plans to extend the availability of Windows XP for low-cost laptops beyond June 30. No word on how long. Perhaps until more folks upgrade to Vista …

So how many times do you think Intel CEO Paul Otellini is going mention Moore’s Law during his keynote at CES (which I’m live-blogging from the ballroom of the Venetian Hotel in Las Vegas)?

I’m betting once every seven minutes for its duration. Any takers?

Here’s what Otellini said and did, in reverse chronological order:

5:34 p.m.: Otellini closes with a quote from Bob Noyce: “Don’t be encumbered by history. Go off and do something wonderful.”
And that’s it. (Parting shot: All the demos were run on Windows XP, not Vista.)
5:33 p.m.: “As the Internet becomes more powerful, more context-aware, more and more industries will be transformed. Why? Because consumers will demand a seamless experience.” Increasingly, the consumer will be the creator of content, Otellini concludes, with the Internet acting as a distribution outlet. (And Intel providing the silicon, of course.)
5:32 p.m.: Otellini says what we just saw was the leading edge of personal Internet development, but just a glimpse of what reality will be. Otellini notes that there are other applications for this tech as well: medical, disaster and rescue, etc.
5:30 p.m.: Otellini announces the first-ever virtual Smash Mouth: Steve Harwell performing live in motion-capture booth, band performing live over Internet. All members on screen represented as avatars. Very cool. Audience is clearly impressed.
5:29 p.m.: Organic rep notes that the company relies heavily on Intel quad-core processors.
5:27 p.m.: Otellini brings out a rep from Organic Motion, a motion-capture outfit. The company has developed a motion-capture system that requires no specialized suits, just an array of cameras. Steve Harwell strolls over to a motion-capture booth.
5:25 p.m.: Bigstage.com will launch in Q2 of this year. “Put the ‘digital you’ in all your entertainment experiences.” Otellini calls up a video representation of Steve Harwell’s neighborhood. Navigates to Harwell’s old house. Opens the garage, and there’s his band represented by avatars. Avatars are live representations of the band mates, they’re speaking and gesturing in real-time in response to questions.
5:23 p.m.: Now imagine what happens when you take these avatars and extend them with video. Immersive video. (Ha. Video of avatar Otellini performing in Smash Mouth’s first video. Audio’s out, but the video is pretty funny.)
5:20 p.m.: Presenter uses software to give Steve Harwell a mohawk, sunglasses and a bull-ring. That’s great, but what can you do with an avatar like this? Why, put it on a digital motorcycle, of course. Presenter gives digital Steve Hawell a new haircut and a new facial expression.
5:18 p.m.: The presenter from Bigstage takes a few photos of Steve Harwell and begins building a “digital Steve.” Digital Steve will apparently be fully animated and can be shared across various social networks. Ah. Digital Steve is bald. He does look like his real-life counterpart, though.
5:17 p.m.: Turns out that while Steve Harwell was quite impressed with eJamming, he would have been more impressed if it had offered him an avatar.
5:15 p.m.: Steve Harwell from Smash Mouth is very impressed, notes that the other members of the band were all playing from different locations. Harwell adds that the service heralds an era in which new bands arise from online collaborations like the one we just witnessed.
5:13 p.m.: Otellini brings up some live music currently on the service, then calls up Steve Harwell from Smash Mouth to demo the service. Turns out Harwell’s band mates are at this very moment jamming on eJamming. (What an incredible coincidence.) Wow. If this is truly live–as they say it is–it’s pretty damn impressive. (The service, not the performance …)
5:11 p.m.: Otellini brings out Alan Glickman from eJamming, a social-networking portal for musicians. The service allows musicians to meet one another and also play music together–live–in near real time.
5:10 p.m.: Now, Otellini’s talking about the evolution of social networks: “In the future, environments like Second Life will be much more immersive.”
5:09 p.m.: To interact with the Internet’s vast resources, we need new natural interfaces. Otellini cites Nintendo’s Wii wand as an example of an evolved human interface.
5:07 p.m.: Moving on to WiMax, which Otellini claims will enable the personal Internet. It’s the best solution for wireless media delivery. And it will create the ubiquitous, proactive Internet Intel envisions.
5:05 p.m.: On to Menlow and mobile devices. He pulls out an unreleased Toshiba device running the ultra low-power Menlow chip. Device is running Vista and Adobe Air. Robust applications, nice graphics.
5:04 p.m.: Describing a chip called Canmore–system on a chip optimized for hi-def video and Internet.
5 p.m.: Moving on to Intel’s new 45 nanometer chips. … News flash: a nanometer is really, really, really small. … Uh-oh, he’s talking chip-fab processes … Reminds me of that old Steve Martin routine: “Those of you who aren’t plumbers probably won’t get this and won’t think it’s funny, but I think those of you who are plumbers will really enjoy this. … This lawn supervisor was out on a sprinkler maintenance job and he started working on a Findlay sprinkler head with a Langstrom 7-inch gangly wrench. Just then, this little apprentice leaned over and said, ‘You can’t work on a Findlay sprinkler head with a Langstrom 7-inch wrench.’ Well, this infuriated the supervisor, so he went and got Volume 14 of the Kinsley Manual, and he reads to him and says, ‘The Langstrom 7-inch wrench can be used with the Findlay socket.’ Just then, the little apprentice leaned over and says, ‘It says sprocket not socket!’ ”
4:59 p.m.: If Intel had built that chip back when it first started it would be about 9 feet wide and consume enough energy to power two households.
4:58 p.m.: Ahhh… here comes the first Moore’s Law reference. … And up pops Gordon Moore on the video screen. Intel’s first chip contained 2,250 transistors, Otellini informs the audience, and its latest quad-core chip has 820 million transistors.
4:57 p.m.: But, Otellini says, there are obstacles to achieving the sort of context-aware computing we just saw, among them silicon and wireless infrastructure.
4:55 p.m.: Otellini notes that processing-power heavy applications like the context-aware computing we just saw demonstrated will require more heavy-duty processors. And that’s of course where Intel comes in.
4:54 p.m.: Now demoing a Web-based program called EveryScape. It looks like a video navigation service. Presenter uses it to take us to Intel’s China office and then to the Great Wall of China. Well, look at that: The device also discovers nearby restrooms.
4:51 p.m.: Woman bikes onstage. Co-presenter asks her for directions and she responds in Chinese. He speaks into the device, asking the woman for directions. The device translates his question into Chinese and speaks it to her. She responds in Chinese and it translates her answer into English–does it pretty quickly, too.
4:50 p.m.: He aims it at a restaurant awning. The device translates its name into English, calls up a menu (also translated into English) and some video reviews as well.
4:49 p.m.: Another presenter joins Otellini onstage. He’s got some sort of mobile Internet device. He aims it at a photo of downtown Beijing behind him, focuses it on a sign written in Mandarin, and the device translates it to English. Very slick.
4:48 p.m.: Push media? No, a more personal Internet. One that’s predictive and context aware.
4:47 p.m.: “Just as MTV evolved beyond music videos, the Internet will continue to drive the evolution of the media industry. In the next evolution of the Internet, the Internet will come to us.”
4:45 p.m.: “Our updated song lyrics highlight a disruptive force that’s going to change the content industry: the Internet.” (Really going out on a limb there, eh, Paul?)
4:44 p.m.: And here comes Paul Otellini … Clearly, he found the video funny. He takes the stage with a giggle.
4:43 p.m.: It’s a music video. “Internet Killed the Compact Disc Star/ Internet Made The Video Star”–sung to the tune of “Video Killed the Radio Star.”
Not a single laugh. Audience looks like the emotionless pod people in “Invasion of the Body Snatchers.”
4:42 p.m.: Oh dear. Keynote opens with a video presentation of “Intel’s Vision of the Future.”
4:39 p.m.: And here comes Gary Shapiro again. Lousy opening act, if you ask me. He even stumbles on the “nanometer.”
4:37 p.m.: Lights dim … and here comes that silly CES advertisement they ran prior to the Gates keynote last night. It’s almost as if the CES producers are purposely trying to put the audience to sleep before the keynote even starts.
4:30 p.m.: Interesting little sidenote before Otellini begins: Intel has distributed questionnaires throughout the packed hall asking attendees to review Otellini’s keynote. A $500 random drawing is the incentive for completing it. Question No. 6: Rate your agreement with this statement on a scale of 1 to 5: Paul Otellini has a clear vision for the future when consumer electronics meets the Internet, he knows what he is talking about and I believe what he said is going happen. (Sadly there’s no “Intel has won its de facto monopoly over the chip market fair and square” question. I’m sure the folks from AMD here would have a field day with that one.)

According to last year’s safely-looking-ahead-to-the-year-to-come lists, 2007 was to be “a year of hyperdisruption for the technology industry”; it was to be “a year of significant developments” and “a year of evolution”; it was to be “a year of invention and innovation,” “a year of experimentation” and “a year of slow, but significant, change”; it was to be “a year of carnage,” but it was also to be “a year of great happiness and multiple blessings.” Above all, 2007 was to be “a busy year for technology.”

Which, as you’ll see below (and in our companion video), is pretty much how it turned out. What follows is Digital Daily’s abridged guide to the year in tech news–a fond reminiscence of what was, and our First Annual Year-End List For Year-End List Haters.

1. Yahoo Shareholders Reject Plan to Tie Executive Compensation to Company’s Crappy Performance
   Well, what do you know: Yahoo’s annual shareholder meeting didn’t conclude with CEO Terry Semel’s head piked on the exclamation point of the Yahoo sign outside company headquarters.

2. I Know It Was You, Fredo. You Broke My Heart. You Broke My Heart!
   Apparently, Fred Anderson is the “Fredo” of the Apple options backdating family.

3. We’ve Asked John Williams to Do a Special Performance of the Theme From “The Poseidon Adventure” for Our Q4 Results
   Who’s programming Microsoft’s on-hold music, Apple’s Phil Schiller? Waiting for the company’s third-quarter earnings call to begin yesterday, those listening in were treated to an instrumental piano version of Celine Dion’s “My Heart Will Go On.” From “Titanic,” the disaster movie.

4. I’m Proud to Say Our New “Soylent Green” iPod Is Made of 100% Biodegradable Greenpeace Activists!
   If you’re going to try to smear Apple for reckless environmental practices, you best have some hard epidemiological and toxicological data on hand, because goofy Photoshop treatments of the company’s marketing materials just can’t stand up to a blow from the Apple PR machine.

5. And Online Display Impressions Soared as More Americans Checked Their AOL Accounts for Old Times’ Sake
   To hear tell from Time Warner executives, the company’s better-than-expected earnings for the first quarter owed quite a bit to gains in online-advertising market share by its AOL Internet division.

6. Web 2.0 Audience in Mirror May Be Smaller Than It Appears
   How ironic is it that Web 2.0–the “participatory Web”–has far fewer participants than its architects would have us believe?

7. And for My Next Trick, I’ll Turn Myself Into a Complete Jackass
   If you’re going to demand that YouTube remove a video to which you object under the Digital Millennium Copyright Act, it’s probably wise to make sure that you actually understand the DMCA.

8. War Is Peace. Freedom Is Slavery. Ignorance Is Strength. DRM Is DCE.
   You can’t put frosting on manure, but HBO’s Chief Technology Officer Bob Zitter isn’t above trying.

9. We’re Naming It the Motorola STNKR, After Our Q1 Earnings …
   Carl Icahn was right. Motorola really is desperate for a new product. How else to explain a patent the company was awarded last month for a “communication device having a scent-release feature and method thereof.”

10. The Frienemy of My Frienemy Is My Enemiend
    If Microsoft is planning an acquisition in the online marketing and advertising space, it better act fast, because if it waits much longer there won’t be anything left to acquire.

11. How Would Monsieur Ellison Like His BEA Served? Mixed in a Bucket With Oracle’s Other Acquisitions?
    Looks like we may be in for another PeopleSoft-esque takeover drama …

12. I’m Just Biding My Time Here Until I Can Quit and Study Whale Feces Full Time
    Given the chance, how would you alter the course of your career? Well, if you worked at Microsoft’s Security Response Center, you might consider taking a job as an Olympic drug tester, a gravity research subject, or a “whale-feces researcher.”

13. Much Like Energy, BS Cannot Be Created or Destroyed, It Can Only Be Changed From One Form to Another
    If Steorn’s perpetual motion effort is anything like its e-commerce venture (and by all accounts things do seem to be going that way), the only thing in its future is insolvency.

14. From Now On, We’ll Be Known as Nlsn/NtRtings
    Looks like vowels won’t be the only accoutrements to be tossed aside in the rise of Web 2.0. The venerable page view is to be abandoned as well.

15. The Defendant Stands Accused of Copyright Infringement, Breach of Contract and Misappropriation of Dumb Luck
    According to popular legend Facebook founder Mark Zuckerberg once kept two versions of his business card in his wallet–one with the title CEO, the other with “I’M CEO . . . BITCH.”

16. Well, Here Come YouTube’s Video ID Tools. Guess That Means Godot Will Be Here Any Minute Now
    Google’s apparently finished “educating users about copyright law” and has moved on to the far more important business of making sure not to run afoul of it.

17. Look at It This Way: Now That Yahoo’s an ‘Ecosystem,’ the EPA Can Finally Declare It a Superfund Site
    “Our financial performance is not what we would like to see long-term.” This, from Blake Jorgensen, Yahoo’s chief financial officer who, just six weeks into the job, is already well versed in the company’s fiscal truisms.

18. Gates to Google: My Lyrical Technique Will Leave Your Body Weak
    Much as Microsoft Chairman Bill Gates fancies himself untroubled by Google’s incursions into his software empire, they clearly do chafe him a bit.

19. Newest Yahoo Mail Feature: BCC Beijing
    Sure, Yahoo signed China’s “Public Pledge on Self-Discipline for the Chinese Internet Industry,” a voluntary agreement to monitor and restrict information deemed “harmful” by Beijing, but did it have to take it quite so seriously?

20. Apple: Wham, Bam, Thank You Fanboi
    “I feel like a $200 whore.” That was one iPhone early adopter’s crass assessment of his feelings of self-worth, after Apple unexpectedly cut the price of the device by a third–just two months after it arrived at market.

21. In the Unlikely Event of a Water Landing, Sergey’s California King May Be Used as a Flotation Device
    With its onboard hammocks, full-size sofas and California King beds, it’s a wonder Google’s “party plane” has room for scientific instrumentation befitting the National Aeronautics and Space Administration, but apparently it does.

22. Act Now and Get a Downgrade to the OS You Really Want, ABSOLUTELY FREE!
    It’s looking more and more like the pent-up demand for Windows Vista we’ve heard so much about this past year is really just pent-up demand for Windows XP.

23. Dude, I Work for Friggin Forbes Magazine. Have You Heard of It?
    The year-long guessing game is over. New York Times reporter Brad Stone has outed Daniel Lyons, a senior editor at Forbes magazine, as the author of the Secret Diary of Steve Jobs, the satirical blog lampooning Apple’s iconic CEO (See? Told you it wasn’t me).

24. If Facebook’s Worth $15 Billion, Then My Stupid Idea’s Got to Be Good for $10 Mil
    Apparently the vainglory from which Facebook CEO Mark Zuckerberg appears to suffer is communicable and spreading rapidly throughout the social network’s developer community.

25. A Billion Here, a Billion There, and Pretty Soon You’re Talking Real Bollocks
    MySpace is worth $65 billion in the same way that Facebook is worth $15 billion–hypothetically.

26. “Apple Has Destroyed the Music Business”–Not That We Didn’t Try Our Best
    Many, many years ago, when the digital-music business consisted of little else besides Napster and the Recording Industry Association of America’s lawsuits against it, Apple proved that there was indeed a decent business to be had in selling music online for $1 per song.

27. It’s Not an Unpaid Endorsement, It’s a “Social Ad”
    Facebook’s Social Ads aren’t endorsements, they’re a “representation” of user activity.

28. Obama Announces “No Tech Policy Left Behind” Plan
    If Google’s mission is to organize the world’s information and make it universally accessible and useful, then Democratic presidential candidate Barack Obama’s is to do the same to its tech-policy issues.

29. Sounds More Like the “Zune of Reading” to Me
    If Jeff Bezos truly hopes to create “the iPod of reading,” observers say he’s going to have to do a hell of a lot better than Amazon’s new Kindle e-book reader.

30. Fiascobook
    What Facebook CEO Mark Zuckerberg lacks in foresight, he certainly makes up for in disingenuous hair-shirt remorse.

Apparently unable to stomach the idea of thousands of school children in developing countries running the Linux operating system on their new laptops, Microsoft is working on a version of Windows XP for the One Laptop Per Child project’s XO machine.

The company has assigned some 40 developers to the project and plans to begin limited field trials in January. If all goes well, XP for the XO could be available as early as the second half of 2008. “We want Windows to run on the XO and we are investing significant energy and talent,” James Utzschneider, general manager of Microsoft’s Unlimited Potential Group, told The Wall Street Journal. “We really want to make sure we have a quality experience before we make commitment to governments.”

Quite an interesting turnabout. After all, Microsoft has been slagging the One Laptop Per Child project’s XO machine since its conception. Just a year ago, Bill Gates publicly derided it while presenting Redmond’s ultra-mobile Origami machine at the Government Leaders Forum. “The last thing you want for a shared-use computer is for it to be something without a disk, and with a tiny little screen,” he said. “If you are going to go have people share the computer, get a broadband connection and have somebody there who can help support the user. Geez, get a decent computer where you can actually read the text and you’re not sitting there cranking the thing while you’re trying to type.”

Good thing Microsoft’s bottom line is largely unaffected by the poor reception given its new Windows Vista operating system. Because according to two new surveys, Vista uptake isn’t likely to improve much in 2008.

In a Forrester poll of nearly 600 European and U.S. companies that have more than 1,000 employees, 84% of all their PCs now run Windows XP, up from 67% the year before. And though nearly a third of respondents said they would begin deploying Vista by the end of 2008, 17% said they wouldn’t do so until 2009 or 2010. “The big story isn’t that 32% of the companies we surveyed said that they would start Vista deployments by the end of next year,” said Forrester analyst Benjamin Gray. “It’s that companies have been hugely successful in standardizing on Windows XP.”

A study by King Research arrived at a similar conclusion. Ninety percent of the 961 IT professionals surveyed said they’re leery of migrating to Vista and more than half said they aren’t planning to deploy Vista at all. Why? Stability, compatibility and cost, says security vendor McAfee. “In 2007 there has been less than 10% market penetration for Vista,” David Marcus, security research manager for McAfee Avert Labs, told ZDNet.co.uk. “There hasn’t been a huge adoption. Most people haven’t upgraded because of the hardware upgrade needed. XP is still robust, and is sound with SP2. Most businesses are looking at it from the point of view of, ‘Why change out for some nice graphics when XP does what we need?’ ”

Previously:
Act Now and Get a Downgrade to the OS You Really Want, ABSOLUTELY FREE!

Hard as it might be to believe, people are actually buying Windows Vista. After market close yesterday, Microsoft reported a 27% surge in revenue, to $13.76 billion for the first quarter of 2007, its best quarterly revenue growth in eight years, on robust demand for its new operating system.

Vista appears to be selling far better than anyone anticipated. Perhaps even Microsoft itself. Asked during an earnings call for an update on Vista adoption thus far, Microsoft CFO Chris Liddell had this to say:

Clearly we are very happy with the client division overall. As you’ve seen since we launched Vista, the revenue growth has been in excess of 20% three quarters in a row, so the overall [headline] number, very good.

“In terms of the premium mix, also very happy about that. Now, in this case, premium mix brings in both Vista and XP premium sales as well, and that’s tracking in the mid-70s, so 75% for the quarter, and that compares to I believe 59% in the equivalent quarter last year, so up 16 points year over year. So we’re very happy with the adoption of Vista Premium and also happy with the old XP Media sales as well.

“The other thing I’ll point to is on the client annuity agreements, which is probably the best leading indicator we can think of of people’s intention to adopt, that’s still very early in the adoption cycle for businesses, but the volume licensing portion of our business was up 27% in the client area, so that’s a very good leading indicator from our point of view.

“And sort of finally, as a wrapper, year-to-date sales are now 85 million units for Vista. That compares to about 45 million for XP over the same period, so almost twice as much.

“So it’s still early days but progress, we’re very happy with so far.”

Eighty-five million copies of Vista sold. Interesting, considering Vista didn’t exactly arrive at market with rave reviews. Guess “the wow” has got to start sometime, right?

It’s looking more and more like the pent-up demand for Windows Vista we’ve heard so much about this past year is really just pent-up demand for Windows XP.

With Vista failing to win over the consumer and enterprise markets in the way it had imagined, Microsoft over the summer quietly began allowing PC makers to offer a “downgrade” option to customers who prefer XP to the pre-installed Vista software. Now the company has gone a step further and extended by five months the deadline to buy Windows XP at retail or with a new PC. Microsoft had planned to cut off XP sales on Jan. 30, 2008, one year after the launch of Vista. Now, it will cut them off on June 30, 2008.

“While we’ve been pleased with the positive response we’ve seen and heard from customers using Windows Vista, there are some customers who need a little more time to make the switch to Windows Vista,” Mike Nash, corporate vice president of Windows Product Management, explained in one of Redmond’s staged interviews. “As it turns out, our official policy as of 2002 is that versions of Windows are available through our retail and direct OEM partners for four years after they ship. Obviously this policy didn’t work with Windows XP, given Windows Vista’s delivery date. As a practical matter, most of our previous operating-system releases were available for about two years after the new version shipped, so maybe we were a little ambitious to think that we would need to make Windows XP available for only a year after the release of Windows Vista.”

Just a little. As Gartner analyst George Shiffler said in late June, Vista’s performance at market so far has been anemic, at best. “The release of Microsoft Windows Vista operating system at the end of January has, so far, failed to stimulate the market in the way many hoped,” Shiffler said. “Our market data suggest Vista has had very limited impact on PC demand or replacement activity.”

Good thing for Microsoft XP is making up for it.

According to International Data Corporation’s 2006 white paper, “The Economic Impact of Microsoft Windows Vista in the United States,” Windows Vista was supposed to generate 100,000 new jobs and $70 billion in revenue for U.S. companies in 2007, revitalizing and advancing the long mutualism between the tech industry and Microsoft’s near-monopoly on desktop operating systems. For every dollar of Vista-related revenue pocketed by Microsoft, $18 was to be generated for the technology industry as a whole. “If you add up all of the spending on hardware and software that run on Microsoft operating systems as well as all of the services around installing and maintaining Microsoft applications and solutions, you quickly come up with a number much bigger than Microsoft’s revenues,” the report claimed. “It grows even larger and more significant when compared to the subset of Microsoft revenues for operating systems.”

Quite a claim and one that should, perhaps, be revisited in light of news that fewer businesses plan to adopt Windows Vista than did seven months ago. According to a client survey by patch-management outfit PatchLink, only 2% using Windows have upgraded to Vista. Nine percent plan to roll it out in the next few months. And 87% have no plans to roll it out at all–at least not yet. Windows XP pretty much works and, unlike Vista, it plays well with the hardware and peripherals you already have.

So much for pent-up demand. Looks like Microsoft may have really blown it when it failed to ship Vista in time for the last big enterprise hardware upgrade cycle in 2004.