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Microsoft is set to offer coupons or take other promotional steps before its formal launch of Vista and Office 2007 to keep PC sales moving during the critical end-of-year selling season.
Neither Vista nor Office 2007 will be generally available via retail outlets or hardware OEMs until early next year. Volume licensees are slated to get their code by year's end, a fact that irked hardware manufacturers and retailers, which worry that the delivery delay to them will stall sales in the all-important holiday buying season.
Mike Sievert, Microsoft's corporate vice president of Windows client marketing, told CRN last week that the Redmond, Wash.-based company will take steps to prevent a market slowdown during those critical months.
"Most likely, we will have some sort of promotion at the consumer level," Sievert said. "It's important that people see value right up until the launch of Vista."
In addition, according to Sievert, the software giant is working with hardware partners to put such a program in place. Sievert, however, stopped short of spelling out the exact details of how the company and vendors would provide incentives to buy Windows XP-based systems now and upgrade later.
Chris Capossella, corporate vice president for the Information Worker Product Management Group at Microsoft, said that the company would likely do something analogous to its typical technology guarantee although all of the details have not been formalized.
At the Bear Stearns Technology Conference earlier this month in New York, Dell CEO Kevin Rollins downplayed to investors the impact of Microsoft's delayed Vista launch by saying that Microsoft and Dell had options to goose sales ahead of Vista's launch, including coupons for upgrades (see Dell story, p. 66).
And such an action would not be without precedent.
Lance Stevens, Hewlett-Packard's software product marketing manager for business PCs, declined to say if any specific plans were in the works between Palo Alto, Calif.-based HP and Microsoft. However, Stevens said past actions by the software giant provide reason to believe they will be repeated.
"What I can say is that with every previous operating system Microsoft has launched, they have provided essentially an upgrade program, and it has typically applied to PCs purchased in the final few days prior to the launch of the new operating system," Stevens said. Such programs, he added, have typically provided for upgrades at only the cost of shipping and handling of CDs. "We have no reason to believe that will not be available with Vista," he said.
Microsoft has been under pressure since delays to the Vista launch were revealed earlier this year. At the time those delays were announced, system builders, solution providers and OEMs said they believed Microsoft should take steps to offer coupons or other promotions to blunt any sales slowdown during the crucial end-of-year season.
Since then, while no programs or coupons have been officially announced, some vendors including Dell, Toshiba and others have begun laying the groundwork to sell systems now that can be upgraded later.
Irvine, Calif.-based Toshiba, for example, has already been selling some notebooks with a logo that says they have been "Designed for Windows XP—Windows Vista Capable."
For its part, Dell, Round Rock, Texas, now has systems with similar logos.
One channel source, who spoke on condition of anonymity, said word has been communicated to partners that within months of the launch, Microsoft would provide an end-user upgrade option on systems sold prelaunch that would allow end users to later upgrade to Vista for just the cost of the CD.
But that channel source also said it is understood that system builders and solution providers might begin stocking initial Vista-based systems at Christmastime.
The tandem Office 2007/Vista drop represents a huge opportunity for partners to migrate customers and customize their computing experience, Microsoft executives said last week.
In fact, solution providers can extend and customize the Office 2007 ribbon interface to reflect the end user's needs or even emblazon it with the partner's own identity, they added.
In essence, a partner can private-label Office for a customer, said Microsoft's Capossella.
Office 2007 itself will run on and take advantage of Windows Vista, but it will also run on Windows XP.
Going back to last fall's SQL Server 2005 and Visual Studio 2005 launches and the BizTalk 2006 introduction a few months ago, those products—plus the new Office and Windows—represent $20 billion worth of Microsoft's research and development, Simon Witts, corporate vice president of Microsoft's Enterprise & Partner group, told CRN last week.