Windows 7 Might Be Coming Up Sevens

• Patrick Seitz
• On 6:13 pm EDT, Wednesday October 14, 2009

Microsoft's release next week of Windows 7, the new version of its flagship computer operating system, appears well-timed, as signs point 15 a refresh cycle starting in personal computers.

A poll of more than 500 consumers by tech support company iYogi found that 61% of respondents said they plan to upgrade to Windows 7 at some point, most before the end of 2010.

And comments late Tuesday from top executives at computer maker Dell (NasdaqGS:DELL - News) and chip leader Intel (NasdaqGS:INTC - News) bolstered the view that a tech spending recovery is at hand.

Microsoft (NasdaqGS:MSFT - News) hopes the Oct. 22 launch of Windows 7 will erase the memory of its poorly received predecessor, Windows Vista.

The debut of Windows Vista in November 2006 was marred by complaints of its slow performance, rich hardware requirements and lack of compatibility with many peripherals and software programs.

Dell Chief Executive Michael Dell said Tuesday the business climate is improving and that a "powerful" hardware refresh cycle will kick in early next year. At an event in Santa Clara, Calif., Dell said the server refresh cycle was already under way and is stronger than expected and that PCs will follow suit.

Back To Growth

Intel executives, on a conference call with analysts Tuesday to discuss the company's better-than-expected third-quarter results, said the personal computer business is rebounding from its deepest slump in nearly a decade. Intel forecast a return to year-over-year revenue growth in the fourth quarter after four straight quarters of declines. It gave a sales outlook range for the quarter that surpassed analyst views by at least $200 million.

The solid outlook and positive statements helped send Intel and Dell shares rising more than 1.6% on Wednesday.

Put it all together, and computer executives seem to be as optimistic as they've been in more than a year.

"There are a number of trends that will initiate a refresh cycle," said Todd Forsythe, vice president of Dell's commercial client product group. "First, there's aging infrastructure at our customer sites. What we're hearing from our customers is that increasingly they're growing concerned that the aging infrastructure is actually going to cost them more than refreshing with new desktops and notebooks."

Second, there's pent-up demand for the new Windows and the features it brings, including better security, Forsythe says.

IYogi, which serves consumers and small businesses, says 36% of consumers plan to upgrade to Windows 7 on their existing machines.

Most Using 8-Year-Old OS

Roughly 70% of iYogi's customers are still running Windows XP, the version of Windows that came before Vista, says Vishal Dhar, president of marketing and co-founder of iYogi. Windows XP debuted in October 2001, which means most PC users are running an operating system that's eight years old.

Computer usage has changed since then, Dhar says, noting that people use their PCs for more video and multimedia applications today.

Migrating from Windows XP to Windows 7 won't be an easy process for a lot of PC users; many likely will need tech support, Dhar says.

Corporations and other enterprises are a lot readier for Windows 7 than they were for Windows Vista, says Dean Williams, services development manager for Softchoice, a provider of tech services.

When Windows Vista came out, only 6% of corporate PCs had the recommended hardware specifications to run it. Today, 65% of existing corporate PCs have the recommended specs, he says.

Only half of corporate PCs met the minimum hardware requirements to run Windows Vista when it came out. Today, 88% of corporate PCs meet the minimum specs to run Windows 7, Williams says.

Perhaps that's why less than 5% of corporate PCs run Windows Vista today, according to a Softchoice study to be released Thursday; 92% of corporate PCs are running Windows XP.

"We were shocked to see what the actual numbers were," Williams said.

An overwhelming number of Softchoice customers say they plan to deploy Windows 7, he says.

Small and midsize businesses likely will install Windows 7 first, followed by large enterprises, Dell's Forsythe says.

Williams still says many companies might choose to upgrade the memory and storage in their existing PCs rather than buy new machines.

Upgrading the random-access memory in a PC costs $25 to $60 per machine, a lot less than a new PC, he says.

"Despite the early signs of economic recovery, organizations are still in the mode where they're attempting to wring as much value from their assets as possible," Williams said.

Buzz up!