Monday, April 12, 2004

Windows XP: Classic Overshoot?

It appears that Microsoft may be experiencing a classic problem of a product overshooting the demand of the market (ignoring that old pesky security attribute). A good article over at News.com details this, but let me take a shot at explaining what I think is happening:

Enterprise customers don't really see a difference between Windows 2000 and Windows XP on the desktop... both operating systems are relatively stable compared to previous versions of Windows and both are probably equally insecure. Both operating systems can run Office XP, the most prevalent productivity suite on the market, so if you are an IT manager and need to allocate your time and money, why would you waste it on upgrading desktops to XP from 2000? Even more scary for Microsoft is that it appears that customers who already own licenses for XP aren't upgrading to the OS. While Microsoft is betting that Service Pack 2 for Windows XP will spur new upgrades (SP2 is expected to fix many of the security problems facing the OS now), this looks like it might be a band aid on a gun shot wound.

The real question for Microsoft is will Longhorn really deliver a compelling value proposition over XP and other Operating Systems to really drive enterprises to upgrade. It certainly appears that the company is betting is OS business on it, because the OS won't arrive until 2006 giving Linux plenty of time to start creeping into the enterprise world... many have down played Linux on the desktop, but with every passing day the OS is becoming more stable, more applications are being written for it, and most importantly, big companies like Novell are entering with serious plans for Linux on the desktop.

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