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.