Microsoft looks good in spite of poor Vista

For most companies, launching a significant new product to a widespread lack of interest - and, in some cases, hostility - would count as a business disaster of considerable magnitude.

But most companies are not Microsoft and most products are not Windows Vista.

Some of the customer reactions to the sixth version of the Windows desktop operating system, which was first released to business customers a year ago next week, have been enough to make a product manager blush.

"I'm just astounded as I try to live with it," says Roger Kay, a technology analyst who claims to have spent 30 hours recently grappling with incompatible software formats, the mysterious deletion of files from one of his drives and other glitches caused by his new Vista-powered machine.

Yet, as Microsoft's recent strong quarterly earnings showed, complaints like these have done nothing to dent the software industry's most reliable money machine. "It's a problem other businesses would love to have," says Michael Cherry at Directions on Microsoft, an independent research firm.

A number of issues have combined to frustrate many of Vista's early users.

For instance, compared with the previous generation of Windows, called XP, the new software will run slower on many existing machines, says Mike Nash, a product manager for Vista - though he adds that rapid improvements in PC hardware have quickly made up for this.

Also, the sheer complexity of the code has caused inevitable teething problems. "Windows Vista is probably not yet as reliable as XP," says Michael Silver, an analyst at Gartner.

Most frustrating of all has been a lack of compatibility with some of the 2m different devices that users plug into their PCs and with applications written by other software companies to run on PCs.

Even Mr Nash admits to issues with his personal Vista machine - an old scanner at home that is no longer supported on Windows, a new wireless networking card that would not work. He adds, though, that "by and large, the mainstream things are working" after steady improvements in recent months.

While most retail customers simply buy a PC with the latest version of Windows installed regardless, the early problems with Vista have delayed its broader adoption. In one sign, PC-maker Dell reversed course and continued to ship the older XP system alongside Vista.

Many big organisations, which had been expecting to switch to Vista late this year or in the first half of 2008, have set the timetable back by nine to 12 months, says Mr Silver, and are now waiting to assess the first overhaul of Vista, dubbed "Service Pack 1" and due early next year.

None of this, however, has had any discernible impact on Microsoft's financial fortunes. Many companies buy their software from Microsoft under an arrangement called Software Assurance, which lets them upgrade to new software whenever they like in return for a fixed annual payment.

Other companies have a strong incentive to pay for Vista on every new PC they buy, even if they have no plans to use it for some time.

That is because they can use Windows XP free of charge until they are ready to switch to Vista, so it makes sense to pay once now rather than make a separate purchase of Vista in the future.

"In the short term, they'll get the money whether people upgrade or not," says Mr Silver.

In the longer term, however, the disenchantment over Vista could take a toll. With sales of Apple's Macs surging, particularly in some parts of the retail market, customers may prove less tolerant of the teething problems that accompany all new releases of Windows.

"I don't think Microsoft can say they're the leader in operating systems anymore," says Mr Cherry.

"There is a belief that [buying a new version of Windows] is inevitable, like death and taxes," adds Mr Kay.

"But if Microsoft doesn't fix it, and fix it good, they're leaving the field wide open to Apple."

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