Microsoft in Denial: And I Don't Mean Egypt

Is Microsoft in Denial? If you have their version of the story, Vista sales continue to be strong and life is good. Taken from the vantage point of a major OEM, HP, the story is more than a bit different.

According to a senior executive at HP, Windows XP is still outselling Vista despite Windows XP being withdrawn from sale in June 2008.

Jane Bradburn, market development manager of commercial notebooks for HP Australia, told APC Magazine that the company was still selling XP machines, but issuing a Vista licence for them. This casts serious doubts over claims from Microsoft that Vista is selling well.

"From the 30th of June, we have no longer been able to ship a PC with a XP licence," she said.

"However, what we have been able to do with Microsoft is ship PCs with a Vista Business licence but with XP pre-loaded. That is still the majority of business computers we are selling today."

This would mean that in Microsoft's books the sales would show up as a sale of Vista.

Rob Kingston, group manager of commercial product marketing for HP said: " Looking into a crystal ball, I don't think businesses will see much value in upgrading to Vista until late next year and, even so, Microsoft will probably have come out with something else by then."

Companies are not the only ones less than enamoured with the operating system. Developers are shunning it too.

The news backs up research by Forrester Research analyst Thomas Mendel, which estimates that only 8.8 per cent of enterprises have adopted Vista. This led to an angry response from Microsoft on its Vista blog, claiming that it had sold over 180 million copies of Vista.

"Given that there's a mountain of evidence to refute this report - including multiple reports from Forrester and other top-tier analysts - this appears to be more focused on making sensationalist statements rather than offering a thoughtful industry perspective based on conversations with IT operations professionals or deep knowledge of enterprise deployment cycles," it said.

"How is this useful guidance to customers? It's disappointing to see such a respected organisation like Forrester take this approach."

Couple this information to the recent Microsoft SEC form 10-K filing, which mentions (Apple cough) in passing:

"A competing vertically-integrated model, in which a single firm controls both the software and hardware elements of a product, has been successful with certain consumer products such as personal computers, mobile phones and digital music players."

and it appears we have a situation here. Why Microsoft chose not to mention Apple directly by name is subject to speculation but the threat assessment is clear. Vista is not doing well for many reasons, and competition is making inroads into Microsoft's traditional lines of business on many fronts.  Linux factors into the mix more than is suggested.

Your thoughts?