- Microsoft is in a revenue slump. It's December quarter was awful, in part because worldwide PC sales fell of a cliff, and in part because Windows Vista revenues are a smaller portion of OS revenues than expected. Microsoft rather desperately needs the PC OS engine to be throwing off its traditional profit pools.
- The market for Vista is poisoned. When Vista came out a little over two years ago it was skewered by the press and analysts. First, it was rushed to market, and the bugs were easy to identify. Second, the new driver model in Vista broke numerous installed devices like printers that had worked happily under Vista's predecessor, Windows XP. Third, the forced driver certification process that Microsoft instituted with Vista forced end-of-life business decisions on numerous vendors. It was just too expensive in engineering resources to go back and fix a driver to Microsoft's stringent certification qualifications, not to mention the Microsoft fees. So working but no-longer-marketed PC products didn't ever work or work well enough with Vista. Importantly, the public picked up on the tech influencers' rejection of Vista, demanding Windows XP instead. So, for the first time in Microsoft history, you can to this day buy a PC preloaded with Windows XP, which launched in 2001. The Vista brand was poisoned and that opinion continues in the market today.
- There's competition to overcome. Apple's OS X was still in the labs when Windows XP was delivered. Today, Apple is pushing 10% of the U.S. consumer market with Mac's running OS X, and making inroads into small business-home business markets. OS X is universally favorably compared to Windows Vista for usability and, to a lesser degree, performance. Linux continues to bite the ankles of Vista, picking up some momentum in the (highly profitable) government market. So, Microsoft needs a more adept competitor to Apple and Linux without the brand liabilities of Vista.
- Therefore, Windows 7 is a rebranding of Windows without the baggage of Vista's reputation. Sort of a witness protection "new start" for an operating system.
- The recent "beta" launch of Windows 7 to 2,500,000 lucky downloaders and Microsoft's hundreds of thousands of developer/parter community members was not just some alpha code thrown over the transom as happened with Vista. Windows 7 beta is the relaunch of Vista; Windows 7 is Vista the way it should have been with a market reputation the way Microsoft assumed they would achieve with Vista.
- So far, i have to grade Microsoft's technology efforts and marketing relaunch with an "A". The beta code is very high quality for a beta. There is an omnipresent way to send feedback to Microsoft about your beta experience. Reviewers such as the Wall Street Journal's Walt Mossberg are pleased. Second, analysts are waking up to the relaunch marketing aspects of the Vista cum Windows 7 transformation. Here too, the signs are promising, such as here and here.
So, barring a hiccup I don't foresee, Windows 7 will roll out after the back-to-school season this fall as a new, fresh looking, highly competitive product to kudos from the press, analysts, and Wall Street. That the Windows 7 product has Vista DNA through and through will be irrelevant. It's all about marketing. Windows 7 is being successfully positioned right now as the winner that Vista never could achieve.