Windows 7: Kick-start that IT services industry needs or another dud?

Jens Butler, Principal Analyst & Adam Jura, Senior Analyst, Ovum

UK: Apparently, there’s never been a better time to be a PC. There may also never be a better time to be a systems integrator. However, the inclusion of some core functionality may bring about pitfalls for some software and managed services vendors.

On the back of the obligatory marketing blitz, Microsoft upgraded its core Windows platform offering to Version 7 yesterday. Initially, there appears to be a collective sigh of relief and the early feedback is generally positive despite a few niggles.

With over 8 million beta downloads, 40,000 hours of customer experience work, months of working with partner ecosystems and over 500 million client feedback sessions, Microsoft has certainly attempted to reveal more during the development process and to use the customer as the guiding light.

Interestingly, Microsoft took an alternative approach by focusing on the customer concerns first: security, reliability, compatibility and speed, and needing the PC to “just work” and not hinder them. Then, and only then, did the obligatory ‘feature fest’ come into play, with offerings such as multi-touch, remote streaming, DirectAccess, Search Federation, BitLocker and group sharing.

Microsoft could be systems integration industry’s saviour
Beyond the impact of the global financial crisis on discretionary spend, there has been a distinct drop-off in organisational uptake of regular transitions to the ‘next’ Windows release.

There are many XP instances that are eight years old or more –- a consequence of the general rejection of the transition to Vista. With Extended Support for XP due to be phased out by Microsoft in 2014, the clock is ticking and pent-up demand for a new platform certainly exists. Enterprise customers signed up to Software Assurance also want to see something for their money, especially if they missed out Vista.

From an IT services providers’ perspective, particularly those offering systems integration services, this could well be the shot in the arm that initiates a wave of implementation work moving into 2010 and beyond, especially when aligned with the current hardware refresh cycle.

After substantial training from Microsoft, systems integrators are now able to provide a suite of services to help minimise the pain of what could be one of the first large IT projects after the global financial crisis.

Not all partners will be happy
For some partners, the inclusion of additional functionality within Windows 7 could negatively impact potential revenues. Windows 7’s DirectAccess technology enables remote workers access to corporate networks without a VPN, which could impact some of Microsoft’s partners.

Microsoft believes that this will not hurt partners too much, expecting them to provide more functional, value-driven VPN solutions. Expect the security area to be greatly analysed.

Of greatest concern is the impact that running Windows 7 will have on existing customer business applications, and especially ERP offerings, often developed for the XP platform. While Ovum expects some teething problems for those with a large portfolio of in-house developed applications, much functionality will be retained.

The XP mode, still somewhat an unknown quantity in enterprise environments, has the potential to facilitate XP-only applications. Rigorous testing procedures (be they internal or externally provisioned) will need to be carried out to ensure that critical application downtime and impact is minimised and the line of business offerings fully supported.

Microsoft still retains a consulting and services practice, which is designed to support systems integrators and other services partners in complex or challenging implementations, providing some degree of risk mitigation.

Positives should outweigh negatives
Overall we are positive about the release of Windows 7, particularly for the enterprise market, where adoption interest is expected to be strong in the next 12 months.

However, this is not a green light for upgrading without rigorous costing and planning initiatives. In addition, it provides a substantial opportunity to ‘clean up’ systems and rationalise the enterprise applications estate.

While there will no doubt be initial issues around both pricing clarity and integration, the overall increased functionality, reliability and efficiency provided should outweigh the negatives. In our eyes the timing couldn’t have been better, with the release aligning nicely with enterprise and hardware upgrade cycles, a slight easing of the pressure on IT budgets and increased focus on building foundations for 2010 and beyond.

Critically, Microsoft has involved a wider number of stakeholders and has worked closely with its mission-critical partner ecosystem to give the product more chance of getting to market quickly and in a cleaner state.