In a New York minute, Vista, Office 2007 debut
Seattle Times technology reporter
NEW YORK — It was a day of superlatives for the world's largest software company.
Microsoft Chief Executive Steve Ballmer clapped, pumped his fists and cheered as he opened trading Thursday morning at the Nasdaq Stock Market.
At long last, Windows Vista and Office 2007, which Ballmer described as the "most significant releases we've ever done of these two flagship products," are in the hands of business customers.
The products will become broadly available Jan. 30, an occasion that promises an even bigger marketing rush.
But for now, the company's focus is on businesses. The big question is how quickly they will start using Vista and Office, with some indication that many will take a wait-and-see position.
That's where the sales effort begins in force.
"This will be the most widely marketed launch of any set of products Microsoft has ever done," Ballmer said.
He would not put a specific dollar figure on the total marketing budget, saying only it would be in the "hundreds of millions of dollars" and exceed what was spent on the 1995 launches of Windows 95 and Office.
Consumers will see much of this in advertising come late January.
At Thursday's event, Ballmer spoke to industry analysts, customers and partners, and reporters from around the world at the Nasdaq MarketSite, a three-story glass cylinder packed with TV screens and broadcast equipment in Times Square, which serves as a backdrop for corporate announcements.
"I probably should say it's an exciting thing to finally be here," Ballmer said, referring to the five years that have passed since Microsoft last launched a version of the operating system that runs more than 90 percent of computers. "And that's probably all I'll say about the past."
Across the square from the MarketSite, video screens covering several stories of a building showed Microsoft's advertising for the launch: the words "ready for a new day" over an orange rising-sun background.
Microsoft formalized a third big release with Exchange Server 2007, its corporate e-mail platform. Ballmer also rattled off a list of more than 30 associated programs to complement the big three.
The software launched Thursday is suited mostly to large businesses, which typically buy Microsoft products through volume-license agreements.
The last time Microsoft released new versions of Windows and Office simultaneously was in 1995. But never before has it divided the release of these major products for businesses and consumers, as it's doing now.
"It is somewhat of an experiment for us, and I think it will be a good thing," said Chris Capossela, corporate vice president of product management in the Microsoft Business Division.
Compounding that marketing challenge is the inability of consumers to get their hands on Vista-installed computers until after the holidays, thanks to the last in a series of delays Microsoft encountered in developing the software. That could result in billions of dollars in delayed computer sales.
Microsoft and its partners in the computer industry, many of which were on hand Thursday, are walking a tightrope with the business launch.
By making too big a marketing splash with Vista and Office for businesses now, they could douse holiday PC sales to consumers.
Despite the later start, analysts expect consumers to take up Vista faster than businesses, in part because they'll have little choice after Jan. 30, when most PCs will be sold with the new operating system on board.
Analyst firm IDC expects to see 90 million copies of Vista on computers in 2007.
"After a long wait, the adoption of Windows Vista will take place almost immediately among consumers, while businesses will follow a decidedly more conservative adoption curve," Al Gillen, a research vice president at IDC, said in a statement.
Forrester Research suggests 34 percent of companies in Europe and North America plan to deploy Windows Vista within a year of its availability.
"There's no doubt that Microsoft has made a lot of fundamental changes to improve performance, reliability and security, but upgrade apathy will take time to overcome," wrote Forrester analysts Simon Yates and Benjamin Gray.
Microsoft plans more than 300 seminars to market the products directly to businesses in the coming months. As it did Thursday, it will likely tout the benefits of using Vista and Office in concert.
Consumers might help overcome some of that "upgrade apathy" as they start using Vista and Office at home and push for adoption of the technology at work. Among the biggest changes are improved graphics capabilities, user interfaces and the ability to search for all kinds of data from anywhere in the system.
At the same time, Microsoft is pitching IT decision makers on the back-end features of these new products, such as new communication tools, business intelligence, content management and security.
Despite Microsoft's concerted efforts to improve the security and quality of Vista, its track record with earlier versions weighs on the minds of some IT professionals.
"I think people may take a little bit more time to make sure they understand all of the potential benefits and some of the risks in implementation," said Harry Harczak, executive vice president at CDW, a large seller of technology and services.
CDW polled 761 information-technology decision makers familiar with Vista in late October. "Fifty-two percent of our respondents indicated that bugs in the first release are their biggest concern," Harczak said.
Microsoft can help allay that concern by quickly releasing an update, or service pack, for Vista, Harczak said.
Asked whether Microsoft has a service pack planned, Ballmer said it would be premature until the company gets feedback on the initial release. He expressed optimism feedback will be positive.
"We built the highest quality, most secure, most reliable Windows operating system ever," Ballmer said. "Of that I am sure."
Benjamin J. Romano: firstname.lastname@example.org
Copyright © 2006 The Seattle Times Company