Yesterday, Microsoft Corporation announced the "business launch" of several of its most prominent software offerings. Most notable were the releases of Windows Vista, its next-generation PC operating system; 2007 Microsoft Office, the update to its office productivity suite; and Exchange Server 2007, the next generation of its messaging server. In all, the vendor announced over 30 products for clients and servers.

How important are these releases? The company's press release states that the announcement "marks the beginning of the most significant product launch in company history" and quotes CEO Steve Ballmer as saying, "These are game-changing products." Given that 31-year old Microsoft continues to reap multi-billion dollar quarterly profits (revenue was $10.8 billion and net income was $3.5 billion for its first fiscal quarter reported in late October), Ballmer's claim is noteworthy.

Microsoft lists the top benefits of its upgraded software

What are the specific benefits of Vista and the new Office? Looking at the launch site collateral, Microsoft is focusing on four key areas:

• "Simplify How People Work Together" Microsoft highlights its new unified mailbox (email, instant messaging, and voice mail), optimally powered by the new Exchange server and delivered on the Vista operating system. The vendor is emphasizing access to communication, whether at the office or on the go using a Windows-powered mobile device. Key technology enhancements include improved synchronization and collaboration tools.
  
  
• "Help Protect & Manage Content" The vendor is highlighting information control, specifically in regards to increasing compliance obligations. The idea is to both monitor and manage the access, use, movement, and retention of data. Using enhanced document security, work flow rules, and electronic forms, the vendor claims organizations will be able to create more efficient, secure, and automated business processes.
  
  
• "Find Information & Improve Business Insight" The key technology for Microsoft in this area is improved search technology. In addition, the vendor says that integrated client and server technologies will enable customers to seamlessly flow critical, customized information to the appropriate users in the form of dashboards, spreadsheets, and reports.
  
  
• "Reduce IT Costs & Increase Security" While listed fourth, for many Microsoft customers the concept of a more secure client operating system is one of the most compelling aspects of this business launch. Critical changes in Windows include default settings on the desktop designed to inhibit the installation and spread of malware and social engineering attacks delivered via email. Other improvements include tools designed to make management and deployment of Microsoft products easier and less expensive.
  

As noted above, these releases are only for Microsoft business customers with Open License, Select License, and Enterprise Agreement volume licensing agreements (for a comparison of the programs, click here).

For those who want to buy the products at retail, Vista, Office, and Exchange will be available "in January 2007." PCs loaded with Vista and the new Office are expected to be available in the same time period. The vendor is also offering a Technology Guarantee Program for those who buy Windows XP or Office 2003 at retail after October 26 (e.g., consumer "boxed" details are here).

The upgrade equation: Enhanced UIs and features versus user training and support

Both a benefit and a detraction from the two high-profile client software releases, Vista and Office, are the changes to the programs' user interfaces (UIs). Debates about UI, human-computer interaction (HCI), and human factors engineering issues will never be settled. While there are many agreed upon conventions and best practices, software UI design is a hotly debated issue. For example, is Apple's Mac OS X interface better than Microsoft Windows XP's interface? What about OS X versus Vista? What about Office 2003 versus OpenOffice.org?

For many organizations, the issue of who has a "better" UI is a waste of time. Most IT departments are more worried about changing or introducing new UIs, whether because existing software has been upgraded or a new application is rolled out. Any significant change or introduction of a new way of using software means the organization will need to devote resources to training and supporting its users -- an expensive proposition that can mean thousands of dollars in time and training for a relatively small business and millions of dollars for a large enterprise.

There is no doubt that critical new features of these launches will require training for most end-users. For example, Vista both enhances features and elements offered in XP as well as adds new capabilities, such as the Sidebar, Windows Flip 3D, and Instant Search. 2007 Office adds a major new interface features to all its component apps, such as Word and Excel, called the Ribbon, designed to make it easier to use basic and more advanced features of the programs. And the unified inbox mailbox powered by Exchange Server 2007 and available in Outlook 2007 will also require teaching users how to use and become efficient with its new UI.

A matter of comparing cost against return 

While Microsoft can certainly make a strong argument that each of these UI improvements will make workers more productive over the long haul, the reality for IT and the help desk is that with or without training, users of the new products will be calling and submitting trouble tickets.

For CIOs, any decision to deploy these releases will involve a multitude of issues that will have a significant financial impact on the organization, such as:

• Testing the tens, hundreds, or thousands of existing apps for compatibility
  
  
• Training users on new client software features and UI enhancements
  
  
• Training support and help desk personnel to resolve the inevitable problems of even the trained users
  

So while Microsoft has certainly created enticing new offerings, the individual organizational jury is still out on whether the new features and capabilities outweigh the cost of adoption, deployment, and support. Eventually, many organizations will invest in some of these new solutions, although the vendor is hoping the uptake will be relatively fast.

The good news for the Microsoft is that it will receive a boost when the consumer version of Vista becomes available in January of next year. New PC buyers and upgrading enthusiasts exposed to the enhanced functionality of the vendor's client products at home will slowly self-train themselves on the new software and eventually put pressure on IT to adopt it. The bad news, of course, is that PCs are already entrenched with consumers, and home upgrades will be slower than during previous operating system upgrades, such as the move to 32-bit Windows 95 from previous Windows releases.

For Mac OS X, Linux, OpenOffice.org, and other alternative software fans, any share gains from Microsoft will be slow. While these offerings may chip away at the software giant's market share in various markets and regions, the vendor is unlikely to see mass defections. Most likely, the biggest hurdle for Microsoft to overcome will be trying to convince its existing customer base to upgrade.

By: Tom Rhinelander, NRG Analyst