Microsoft: Vista Is Just the Beginning

NEW YORK — Microsoft  CEO Steve Ballmer kicked off
sales of the consumer version of its new Vista operating system (OS) and
Office suite today, calling it “the biggest launch in Microsoft’s history.”

Sales of Vista and Office 2007 officially begin tomorrow in North America,
although it has already begun shipping new product in New Zealand and other
places on the other side of the international dateline. Vista and Office
2007 were made available for enterprise customers in November 2006.

Ballmer took pains to note that this launch is not an end in itself, but the
start of a vast opportunity for hardware vendors and software engineers
developing other forms of software running on the new Vista OS.

He noted that while many new features of future versions of the OS may be
delivered online, Microsoft will continue to deliver new standard versions
of Windows in order to keep up with changes in how consumers use PCs.

In addition to providing a platform for consumers, he said, Windows is an
important software development platform.

“With every new release of Windows, I suspect I’ll be able to tell you about
how much more innovation there is to come from all of us in the industry,”
he said during a press conference here today.

In order to emphasize the importance of the new product launches to the
vendor ecosystem, Ballmer was accompanied on the dais by executives from HP
, Dell , Intel , AMD
 and Toshiba.

Microsoft expects to sell more than five times more units of Vista than it
did Windows 95, and twice as much as Windows
, during the first three months of availability, Ballmer said.

According to the Microsoft chief, the bulk of these sales will come from
sales of new, more powerful equipment loaded with faster processing speeds
and ramped-up graphics cards.

But he said that sales will also be driven through word of mouth as
customers upgrade their “Vista-ready” PCs to the new OS.

“The fact that you can get upgrades helps create momentum,” he said.

Alluding to the fact that delays
in the launch of Vista created hardship for PC vendors and retailers,
particularly around the traditionally active holiday season, he said, “we
tried hard to avoid sales slowdowns through our technical guarantee program
and the Vista-ready program.”

Ballmer deflected the suggestion that offering three versions of Vista is
symptomatic of Microsoft’s growing size and bureaucracy.

“The truth is, there are a variety of needs in the home. Some people work
from home, some don’t, some people have a high-end consumptive use-style,
some people are looking for things that are much lower-end, and we were
trying to meet that range,” he said in response to a question from

Ballmer also predicted that sales momentum will build as customers follow an
from Vista Basic to Premium and Ultimate.

“The opportunity that we see to drive the technology industry, to drive PC
sales, to drive new value, is huge,” he said.

Executives from Dell and HP also chimed in that customer upgrades would
drive more sales of new PCs.

“Many consumers will [first buy Basic and] want to have a more senior
version, and that’s what I think we’re looking for,” noted Dell CEO Kevin

Ballmer also predicted that consumers will want to extend their Vista
experience to a wide variety of peripherals and home entertainment units
that are just beginning to come to market.

“Today the PC is the center of the way most people manage and control their
digital lifestyle,” he said. But while the central role of the PC continues,
he said, “the digital lifestyle now extends much more broadly.”

He cited the Internet, cell phones and smart phones and MP3 players as
examples of the way the world has changed since the release of Windows 95
twelve years ago.

Vista and Office 2007 “have been designed to bring the best of these
phenomena to market,” he said.

“Vista is the landing point for connected entertainment in the home,” he

Ballmer said that the design of Vista is focused on four principal areas:
ease of use and excitement, security, entertainment and helping people

“That’s a large batch of innovation for us,” said Ballmer.

Jupiterkagan analyst Michael Gartenberg agreed that Microsoft did well to
bring three versions of Vista to the consumer market.

“One size doesn’t fit all anymore,” he told

He also agreed that Vista is not the last OS that Microsoft will ship.

“The death of the operating system has been greatly exaggerated,” he said.

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