Reluctance to upgrade starts to hurt Microsoft
Published: 02 Feb 2004 14:30 GMT
A move by Microsoft to extend support for an older version of Windows underscores a new reality for the software giant: convincing customers to upgrade is becoming much more difficult.
Earlier this month, Microsoft backtracked from a decision to end support for Windows 98 and other older Windows versions, pledging to continue support until 2006.
While many customers applauded the move, some analysts said that the decision may be more than an act of goodwill. According to recent surveys, about one-quarter of all PCs run Windows 98 or older versions of Windows. "Better to have people stay on Windows 98 than to start investigating things like Linux," said Michael Gartenberg, an analyst at Jupiter Research.
Microsoft maintains that it was just looking out for customers -- mainly in developing markets -- when it extended support for Windows 98, Windows 98 Second Edition and Windows ME.
Of course, the call for Linux on the desktop has been strongest in emerging markets such as China, as some governments, both foreign and domestic, are actively investigating whether to switch from Windows to other operating systems.
Whatever the company's motives, the move highlights a growing area of concern for Microsoft: how can the software maker persuade existing customers -- especially consumers who see their current software as "good enough" -- to regularly upgrade? Excluding new hardware sales, the company derives 42 percent of its revenue from one-time software licenses and upgrades.
Microsoft has historically used two methods to move its customers to a new release of Windows or Office: convince customers of the merits of upgrading or cut off support, Gartenberg said. The looming threat of a support cut off for Windows 98 undoubtedly got some people to upgrade, but as the deadline neared, Microsoft saw that not everyone was going to make the switch.
"A lot of the marketplace said, 'we're not going to be pushed along," Gartenberg said.
Some consumers have machines that just can't be upgraded to run Windows XP. "We have older hardware and are unwilling to invest at the drop of a hat thousands of dollars to refit the hardware," said Mike Flynn, a software consultant based in the Seattle area.
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4 comments
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I use Win98se and purchased WinXP some 18 months a... Anonymous -
I have a more relaxed attitude towards Microsoft s... Paul van Dinther
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Here is wishing our Microsoft user friends the ver... Adebayo Omo-Dare
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I just knew they would have to review the support... Anne Landser
