 Windows 7 beat Windows Vista in early sales, however job cuts at Microsoft continued, with 800 more employees laid off last week. Microsoft is cautiously optimistic, but worries about whether the recession is truly over. (Source: news.com.au)
Microsoft is predicting slower adoption after the initial buzz, due to the state of the economy
Microsoft seems well positioned for the
future. Its new Windows
7 operating system has been largely well-received by the press
and public thanks to an unprecedented public testing program, which
saw millions taking Windows 7 for a free spin.
In its
latest
quarterly results, when factoring in the $1.47B USD in deferred
revenue from the Windows 7 Upgrade Option program and sales of
Windows 7 to OEMs and retailers before the October 22 launch date,
Microsoft posted an overall revenue of $14.39B USD. While down
4 percent from a year ago, this number represents a decrease in
losses from previous quarters.
Recent information from the NPD
Group, a leading market research firm indicates that Microsoft has
more to cheer about. The firms suggests that Windows 7 has
surpassed Windows Vista's opening sales in the same time frame by
approximately
234 percent -- an impressive and much-needed turn around for
Microsoft. According to the NPD Group, PC sales spiked 95
percent in the week following the launch.
Recent
reports from a separate research firm Net Applications indicate
Windows 7 to gaining marketshare at a faster pace than Vista.
Microsoft's outspoken CEO, Steve Ballmer celebrated the results,
calling them "fantastic".
Despite the good news,
Microsoft had some slightly less blithe news to report. The
company announced that it would be laying off 800
more employees, completing a planned layoff cycle of 5,000
employees. Despite the apparent sales success of Windows 7,
Microsoft felt that the cuts needed to proceed, as its wary of
reduced sales after an initial boost, as the economy is still
struggling to recover.
In order to deal with a slower pace of
tech adoption, Microsoft is now operating with a leaner workforce of
approximately 91,005 employees worldwide, with an estimated 54,923 of
them in the United States. Microsoft actually cut slightly over
5,000 jobs, with the latest 800 cuts. A company spokesperson
commented,
"Continuing to manage our business closely, as we always do, can
mean additional headcount adjustments."
Much of
Microsoft's fate rests on whether the economic recovery can continue
in 2010. While some, including U.S. President Barack Obama, say
the recession is over, others in the business community warn that we
aren't out of the woods yet.
Another key question for
Microsoft is whether the warmer reception of Windows 7 will help sway
businesses
that were on the fence to move up their upgrade plans. A
Deutsche Bank survey of 120 IT buyers suggests that Windows 7
upgrades will begin "within 12 to 18 months".
Likewise, a survey from ScriptLogic suggested that most companies
will wait till the end of 2010 to upgrade to Windows 7 (approximately
14 months).
"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke
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