Microsoft Corp.'s long-awaited Vista operating system software will be released to the general public in January, just missing the holiday shopping season.
Originally slated for release in the second half of this year, the OS, described by Microsoft as "breakthrough software" that will improve the user experience, collaboration, management and security, hit a number of development delays.
But Microsoft Vista Enterprise, the business version of Vista for large-volume customers, will be launched at a media event in New York Nov. 30. The event, called A New Day for Business, will be hosted by Microsoft CEO Steve Ballmer and marks the business availability of Vista, Office 2007 and Microsoft Exchange Server 2007.
Microsoft did not disclose the marketing budget for Vista. It is the first release of new operating software for Microsoft since the debut of Windows XP in October 2001. For that launch, Microsoft had a marketing budget of $200 million and introduced the new software with lavish events in New York and other cities, featuring Chairman Bill Gates and other top Microsoft executives.
It also rolled out a major integrated campaign 10 days prior to the XP launch, featuring TV, print, online and outdoor ads.
Analysts, marketing experts and even Microsoft executives agree that the company faces significant challenges with the Vista launch.
"Some of our brand challenges include a crowded market and the associated challenge of having our message clearly understood-and the fact that Windows XP was a great product-so we have a challenge in convincing our customers of why they should upgrade," said Mich Mathews, senior VP-central marketing group at Microsoft.
Analysts agree: "The biggest challenge that Microsoft faces in marketing Vista to businesses is convincing companies that there is more to this new operating system than just a fancy new 3-D interface," said Simon Yates, an analyst at Forrester Research. "So many of the features that are important to business buyers-such as tools to simplify large-scale deployments, better client management through group policy management and better application compatibility testing tools-lack the glamour of a good marketing campaign."
"We are taking a very deliberate, segmented approach and breaking out our focus and campaigns accordingly," Mathews said.
Specifically, Microsoft is targeting early adopters, working with hardware and software partners to support the release, engaging business partners and retailers and working to create "buzz activities" around the launch, Mathews said.
For example, Microsoft has created "Certified for Windows Vista" and "Works with Windows Vista" logos for original equipment manufacturers (OEMs) and software partners to use on packaging in preparation for the holiday season.
Beginning this month, Microsoft is releasing Vista to business users that have a software assurance plan, a maintenance agreement that provides free upgrades to new versions of software released within the contract period as well as to volume-license customers.
"In the end, Microsoft's success in the business market is dependent on getting Windows XP shops with software assurance to start introducing Vista into their environment," Yates said.
But for companies without the plan, it's going to be a tough sell, analysts said.
"The first thing they have to do with organizations that don't have software assurance is to convince them to buy it," said Michael Silver, research VP-client platforms group at Gartner Group. "They have Windows XP, which Microsoft will support through the end of 2013, so is there a real rush for them?"
Cost of testing, migration
Another issue is testing and implementing the software in the organization, Silver said. "Some users will really want to avoid the cost of testing all the applications and doing a migration. Some will want to skip Vista altogether." Silver added, "We think most organizations will need to bring in at least some new PCs running on Vista at some point."
Silver, who is now using Vista in a production environment at Gartner, said there are benefits to the software, including a new search engine, more sophisticated security features, improved manageability and collaboration tools.
Marketing to OEMs
Another big issue for Microsoft is marketing to OEMs.
"There are a lot of channel issues here," said Donovan Neale-May, managing partner of marketing communications agency Global Fluency and executive director of the CMO Council.
"The OEMs have to be comfortable that the operating system will not compromise their brand. There are issues about who will ultimately be responsible for all the help desk calls that will come in as a result of the upgrades."
On the plus side, "A new OS can help them drive hardware sales, help the channel drive revenue, and add product and application sales."
Neale-May said a challenge for Microsoft is to communicate to all of its audiences, including OEMs, business customers, end users and service providers, that applications will run together-and run better-once the new operating system is installed.
"There is a certain amount of fear associated with your operating system," Neale-May said. "They really have to be careful about managing expectations."