It Takes More Than New Windows

XP may have been the biggest product launch this year. That’s not saying
much, in a year of muted marketing and great caution.

Still, a big launch takes courage these days. Despite the ‘quantum leap’
hype, it would be tough to expect XP to match the last big launch, Win 98.
Surveys peg initial global sales at about three-fourths of the 98 level. That’s
good going in troubled times. India sales are weaker. Our estimates show Delhi
at a tenth of the several thousand level it had notched up with 98 in retail
sales in two weeks. Vendors are hoping that sales will pick up–and will help
boost PC sales.

Will it? An operating system boosting PC sales in India in these times is
tough. Still, XP will have its impact on India’s software market.

Enterprises aren’t rushing out to upgrade. Don’t blame them: funds are
tight as can be, and CIOs are worrying a lot about terms like RoI. The XP
upgrade could set a 100-PC office back by over Rs 11 lakh, including hardware
changes. Of five CIOs I asked, four said they’d rather spend this on 20 new
PCs–with XP.

Home users are not rushing out to buy XP Home, either. The caution that
spilled over to the consumer this year, persists. Even though they could indeed
use some of the stunning usability and feature additions.

Mobile executives would like XP’s laptop-friendly features, power
management, et al. I missed it when spending hours in transit at an airport: XP
would have let me simply plug in a 802.11 card for wireless Internet access
across the airport. It took much fiddling before I could go wireless for the
remaining hours.

OEM shipments will remain over 90% of XP sales for Microsoft.

Partly, that’s because over half the PCs sold (all MNCs and most major
Indian brands) are shipping legal Windows licenses. And partly because Microsoft
is probably the DQ Top 20 company most out of touch with the channel community.
So retails sales have simply not happened. Nor has it cracked the vast community
of assemblers for OEM sales. Unlike Intel.

A nice impact of XP–and its live activation process–could be to push down
piracy levels a bit. Even small users might actively consider buying a great
product they can’t easily copy.

But the market’s not going to turn around on a single product. The upturn
could come this fiscal from government spending in the Jan-Mar quarter, and big
enterprise spending in the year ahead. In our cover survey, CIOs admit to a 23%
drop in IT spend–but expect an over 50% rise next year. It looks like that
light at the end of the tunnel could be coming back on, slowly.

Prasanto Kumar Roy