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OEMs to continue XP downgrades

by on29 April 2008


June 30th will not be the last day for XP

Microsoft has not appeared to have gone “batty” with the latest comments from Steve Ballmer saying that customers don’t want XP. While Ballmer did admit that corporate adoption of Vista was not moving as fast as he would like, he then suggested that this was due mostly in part to the fact that they were running older equipment.

The fact is that corporate customers have support costs to consider, and having multiple operating systems does increase support costs, not to mention the fact that in many cases applications that some companies have simply don’t run on Vista.

Of course, the suggestion that companies don’t have the latest hardware in many cases is true, as well. Most large companies are on a three-year or four-year purchase/replacement cycle for their computers; and computers that are three to four years old obviously do not have the horse power to run Vista, we can’t dispute that. In addition, many corporate customers were or have been buying computers that lack some of the performance features such as graphics and extra memory that are almost necessary to give Vista some zing.

Now, major OEMs are starting to tip their hand announcing that they will make Windows XP available to customers beyond the June 30th deadline. The way that they will do it is to take advantage of the Microsoft loophole in their licensing agreements that allow computers to be downgraded to Windows XP. In this scenario, the customer buys Vista, but then is downgraded to XP. This gives Microsoft the Vista sales that it wants, but it gives customers the flexibility to obtain Windows XP.

One of the major stumbling blocks to the “downgrade loophole” is the fact that it can only apply to Windows Vista Ultimate and Windows Vista Business. Standard consumer editions of Windows Vista will not be able to take advantage of the downgrade options, which does, of course, mean that Microsoft will get the higher dollars that it charges for the Ultimate and Business versions of Vista.

According to various reports, Dell, HP and Lenovo are three of the major OEMs that supply large numbers of computers to business customers that want to continue to use Windows XP. Some additional OEMs are also at least looking at the possibility of finding a way to continue to offer Windows XP to customers that want it.

In the case of Dell, they will stop taking orders for Windows XP on June 18th. After a transition period, they will begin offering configurations of its business class machines with a Windows Vista downgrade to XP option.

HP has now stated that they will continue to offer business class desktops, notebooks, and workstations that are “pre-downgraded” to Windows XP at least until July 30th of 2009. While HP has not yet spelled out all of the specifics of their downgrade program, it is obvious that they have had it in the planning stage for some time.

Of course, the reality of this situation does mean that it will be a logistical headache for retailers at the brick and mortar level to be able to offer Windows XP. Their ability to offer it to business customers will offer come by ordering the machines direct from the manufacturer or by using a VAR partner, meaning that the machines will come directly from the manufacturer. So, while business customers are taken care of, the average consumer options (short of ordering a business class machine direct from a manufacturer that offers it for direct sale to the public) are going to be limited, and it is obvious why you are not likely to see Vista downgrades at the retail level.

As we have suggested before, many smaller retailers have been stocking up on Windows XP Pro licenses for some time now, and a black market trade in Windows XP Pro licenses will continue to exist whether Microsoft likes it or not. While it is a hassle and many consumers will be forced to pay a premium for it, options to get Windows XP beyond the June 30th deadline will still exist.

It would just be easier in the end of Microsoft would bite the bullet and continue to offer XP as an option for those that want it. While that would not improve their sales numbers for Vista in the way that the downgrades will, it would help with some much needed good will toward business and consumers who have no real interest in Vista, but want to see and learn more about Windows 7 before making a decision on which direction they will go.

Some IT professional are already saying that because of the quick release of Windows 7, if at all possible they might skip Vista altogether and just move to Windows 7 if it happens to ship on time.

Last modified on 29 April 2008
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