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This Week, Microsoft Makes Its Case For Windows 7 and Office 2010

Posted by: Peter Burrows on July 13, 2009

It’s going to be a big week for Microsoft. Thousands of distributors, systems integrators and software developers, among others, have convened in New Orleans for the company’s annual Worldwide Partners Conference. They’ll have plenty of news to ponder. As we noted in our cover story a few weeks back, the company will unveil Office 2010, which may be the most radical release since the original Office suite in 1989 (not a particularly high-bar, some say). Rather than provide tools to enhance personal productivity, the new Office will offer features so that co-workers and others can simultaneously collaborate with each other—say, to write a sales proposal or nail down a sales forecast. This will require hundreds of millions of users to re-learn the product—always a risky proposition—but it makes up for it with a variety of other enhancements. Most notable: free, if less useful, Web-based versions of Office apps such as Word, Excel and PowerPoint. See TechCrunch’s product review here.

But the biggest near-term news at the show will be around Windows 7, which is slated to ship on Oct. 22. In an interview last week, Windows marketing chief Bill Veghte listed some of reasons why investor bullishness about the release may be justified (FYI, I agreed to an embargo, that prevented me from posting the details until now, when he’s about to deliver a keynote at the partners conference.). For starters, Windows 7 is the first major Windows release that doesn’t require a more powerful PC than the preceding release, in this case Windows Vista. That means some 350 million PCs already owned by someone can be upgraded to run it, according to the company. And Microsoft plans to offer aggressive promotions to spark demand. For example, for the first six months the Professional version of Windows 7 will sell at a discount of at least 15% compared to the current business-class version of Vista.

Veghte says Microsoft has cleaned up its pricing strategy, while expanding its product portfolio to reflect the changing PC market. Now, it will offer clear “good, better, best” offerings, from $299 “netbooks” running the aged Windows XP or the “Starter” edition of Windows 7, to $1500-plus screamers. “Value has become even more paramount in the economic environment were in right now,” says Veghte. “We’ve never had this range of PCs before.” It’s also never had a pricing strategy so heavily based on getting people to upgrade. As we reported in April, all Windows 7 PCs will ship with multiple versions of the OS pre-loaded, so they could be turned on in minutes with a credit card rather than having to go out and buy and manually install it. In many cases, the same is true with Office. In the past, consumers that didn’t buy the productivity suite with their PC had to go out and buy it, but the company says it has been striking deals with PC makers to load the bits onto their PCs—again, available to be turned on with a credit card.

Certainly, Microsoft is farther ahead in terms of the number of partners and compatible software it has ready to go at launch, compared with the Vista launch. Back then, millions of consumers found that their printer, digital camera and other types of peripherals didn’t work, becuase the software drivers hadn’t been created. But Veghte claims that more than 10,000 software developers are already creating products for Windows 7, versus less than 4,000 for Vista at this stage of its development. Of course, part of the reason is that Windows 7 is in many ways “Vista done right”—notable less for breakthrough new capabilities than for reliability and speed. The company’s focus on blocking and tackling has clearly extended to its work in coordinating the efforts of its hundreds of thousands of distributors, resellers and software developers.

By the way, Veghte will soon go on leave from Microsoft, news that broke on July 8 when it was announced that Windows engineering chief Steven Sinofsky—not Veghte—would be promoted to run the huge Windows client division. The official word is that Veghte will be back, but I wouldn’t be surprised to see him jump ship to try his hand at being a CEO at a smaller tech firm.

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Reader Comments


July 13, 2009 11:37 AM

Post-launch furloughs are SOP for the big boys at Microsoft. I suppose it's possible that he would leave, but clearly his star is on the rise at MS. I'd think that someone with the kind of personality needed to drive Win7 to market would also be the kind of person who would want to continue the climb at Microsoft, unless something really big beckoned elsewhere.


July 13, 2009 11:59 AM

This is going to interesting, following, as it does, the Vista debacle.
But scheduling a launch date of October 22, 2009, will more likely mean April, 2010, since Microsoft isn't exactly punctual on new releases.
Many users are beginning to get the impression that Microsoft as an innovative tech enterprise has pretty much run their course.
In the minds of many, Vista was unforgivable.

David Gerard

July 13, 2009 04:14 PM

60% of businesses won't upgrade to Windows 7:

Don Dembinski

July 13, 2009 08:49 PM

Think about all the Microsoft releases and how every next OS version is going to fix things. I believe that Microsoft has delivered maybe 1 version of OS that anyone should have had to pay for (Win2K or XP most likely by vote).

Now we have Vista (much like a Windows ME release scenario) and MS is asking us to move to windows 7.

Good news, we can fix this MS OS issue, just stop buying their crappy OS releases...they are never going to release an OS that is truly stable.

No more paying to be Microsoft's beta tester.


George Peterson

July 15, 2009 08:42 AM

I never pay for software when free alternative are available for free!

You should try SSuite Office for a free office suite. They have a whole range of office suites that are free for download.

Their software also don't need to run on Java or .NET, so it makes the software very small and efficient.

You can try these links:

July 20, 2009 12:52 PM

Two reasons why MS Office online is important for consumers: 1) applications as a service online makes sense given that most internet users are already leveraging online applications for email, social networking, and even (gasp) office applications (see Google Documents); and 2) MS Office hasn't had a decent competitor in years but now that companies like Google and other open source operators are bringing similar office suites to market (and online) Microsoft will be forced to innovate. Both of these two reasons equal one thing - better and cheaper solutions for the consumer. Competition will save the world!


July 23, 2009 12:56 PM

David, "60% of businesses won't upgrade to Windows 7"

Do your homework. That misreporting has already been debunked on numerous blogs/sites. That 60% is a FIRST year figure which actuall means that 40% of businesses WILL be upgrading within the first year, which has already been widely reported to be a GOOD thing. Past OS adoption curves show 10-15% in the first year. In other words, Win7 is going to be a HUGE hit relative to past OS releases. Just so much pent up demand and frustration.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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