Vista launch sparks competition between PC vendors

As Microsoft prepares to sell the business version of its Windows Vista operating system, Dell is beefing up its IT service offerings to compete for customers with Hewlett-Packard.

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As Microsoft prepares to sell the business version of its Windows Vista operating system, Dell is beefing up its IT service offerings to compete for customers with Hewlett-Packard.

Consumer versions of Vista http://technet.microsoft.com/en-us/windowsvista/default.aspx will not go on sale until 30 January, but PC vendors have started selling Vista-powered computers to businesses, including the Vista operating system, Office 2007 and Exchange Server 2007. The prospect of users rushing to upgrade their hardware to handle the long-delayed operating system has pushed many PC vendors to expand their IT services.

On 30 November Lenovo announced that its ThinkVantage suite of PC productivity tools – used to help automate system recovery, wireless connectivity and network security – would cover Windows Vista Enterprise.

Dell has made a bid for some of the same users, offering an online application, the Dell Readiness Advisor, to indicate any necessary hardware updates, and using "custom factory integration" to load Vista on new PCs before they leave the warehouse. Dell also announced a "Vista ROI Tool" that lets users track their return on investment for the new operating system over a three-year period. These services are available for customers who license Vista for five or more seats on server and storage products, desktops and notebooks.

Hardware vendors expect their sales to jump with Vista's release, because customers will need more powerful PCs to handle the improved security, unified messaging and translucent Aero windows.

"To realise a lot of the functionality of what Vista has to offer, we're recommending dual-core processors, 2GB of memory, bigger hard drives and wide-screen displays," said Kevin Libert, senior manager of the Microsoft Alliance for Dell.

That promise of increased sales is one reason Dell has committed itself to recommending products such as Microsoft's Exchange 2007 instead of competing products such as IBM's Lotus Notes and Domino or Novell’s GroupWise.

Despite such alliances, Microsoft has seen its relationship with PC vendors become strained as it missed several deadlines for shipping the new operating system. Many PC vendors now fear their holiday sales will slump as customers hold out for the consumer release. In return, Microsoft has tried to assuage the problem by offering coupons to customers, assuring them free upgrades to Vista in 2007 for PCs they buy before the new year.

Microsoft may have already waited too long, however, since users typically adopt new technology slowly. In the business world, Vista adoptions are likely to begin with a trickle of early adopters on 30 November and swell to include nearly two-thirds of users within three years, Dell said.

That scenario is drawn from Dell's experience in selling computers and services to 5 million customers as they have migrated to successive versions of Microsoft's Exchange email server over the past five years. Today, 60% of those customers were using the most recent version - Exchange 2003 - while 30 per cent still used Exchange 2000 and less than 10% used the original Exchange version 5.5, Libert said.