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Gates on Vista: 100 Million Served

Sales of the Vista operating system have hit the 100 million-mark, Microsoft Chairman Bill Gates said Sunday night at the annual Consumer Electronics Show in Las Vegas, in what is expected to be his last keynote address.

Microsoft has not broken down what percentage of those sales were from enterprise customers but the company said that 96 percent of all Windows PCs sold through retail are now based on Vista, up from 77 percent last February, shortly after the official launch of Microsoft's latest client operating system.

Overall, enterprises have been slow to upgrade their Windows XP-based systems to Vista, according to industry analysts. Nonetheless, Gates crowed at last night's CES about hitting the 100 million-mark, up from 88 million licenses in late October.

"That's a very significant milestone for the kind of applications development, and special hardware work that we think is very important," Gates said.

Analysts expect enterprises to remain cautious with regard to Vista in 2008. The good news for Microsoft is that Windows Vista Service Pack 1 (SP1) is plugging holes in the Vista OS right now. Microsoft dropped the SP1 release candidate on Dec. 5 and expects to ship the final SP1 bits in the first quarter. By all accounts, the service pack has significantly improved matters.

Industry blogger Mary Jo Foley, author of the book Microsoft 2.0, describes SP1 as the operating system Vista "should have been when Microsoft shipped it over a year ago." She cites as key gains significant improvements to networking performance, hibernate/shutdown functionality and device driver support in the service pack.

SP1 will address reliability and performance issues, supporting new types of hardware, and will simplify deployment and administrators, said David Zipkin, senior product manager for the Windows Client, in an e-mail.

Most notable for developers, he said, will be the release of the Kernel Patch Protection APIs, which will allow third-party security and malicious software detection applications to work in concert with Kernel Patch Protection on 64-bit versions of Vista. "These APIs have been designed to help security and non-security ISVs develop software that extends the functionality of the Windows kernel on 64-bit systems, in a documented and supported manner, and without disabling or weakening the protection offered by Kernel Patch Protection," Zipkin said.

Despite the welcome update, Foley expects corporate uptake of Vista in 2008 to remain tepid, in part because volume license holders won't be aggressively deploying the new release. In 2007, volume licenses made up less than half of the total retail copies of Vista sold.

For its part, Microsoft says uptake of Vista is on plan. "We're still in the ‘early adoption' phase, although we're starting to see more of the mainstream businesses begin their planning and deployment," Zipkin said.

Michael Cherry, senior analyst at Directions on Microsoft, believes SP1 should help boost sales into IT organizations. "In some ways Microsoft has trained customers not to upgrade until service pack 1," said Cherry, himself a Microsoft veteran. "So there are a certain number of people who have it almost as a policy to not deploy until that time."

For many IT organizations, the value of Vista SP1 will boil down to one word: compatibility.

"To me, the real issue with Vista has been compatibility," writes Andrew Brust, chief of new technology for twentysix New York, a Manhattan-based consultancy, and also a Microsoft regional director. "That is changing now, but given that we're a year post-RTM, the pace of change has been somewhat disappointing. It will be interesting to see what Service Pack 1, once it actually RTMs, does to stabilize Vista's usability and mainstream perception of it."

In November 2006, when Vista first shipped, there were 254 applications that carried the Certified for Windows Vista logo. Under SP1, that number rises to nearly 2,300. Device compatibility, another major sticking point for IT shops considering Vista, has shown major improvement under SP1. Today, some 74,000 Vista-specific device drivers are available, up from just 33,000 when Vista first arrived.

One thing the service pack likely can't fix is the conundrum posed by Vista's unique hardware requirements. Vista's most visible, user-facing feature -- the stunning Aero Glass user interface -- demands expensive, high-end graphics hardware and processing power.

"I think the hardware requirements are going to hold Vista back for a long time," Cherry said. "Microsoft has always gambled that the hardware would get in front of them. But this time around they were wrong. And wrong by a lot."

Delaying Tactic
Surprisingly for such an important OS release, Vista demands little specific attention from developers. Asked about the level of developer activity around Vista, Cherry is blunt.

"I've not seen any real [activity]. No, I'm not seeing it. There was an initial scramble to fix any significant app compatibility problems you might have. That's been ongoing and it may in fact be already done," Cherry said. "That to me is different from actually writing an application to exploit Vista, which I am not seeing happen."

One reason is that the latest versions of the .NET Framework, integrated into Vista, are freely available for Windows XP-based systems. That means developers don't have to target Vista at all to take advantage of key features like Windows Presentation Foundation (WPF) and Windows Communication Foundation (WCF). "They got back ported to [Windows] XP, which reduced the value of Vista as a unique offering in the future," said Paul DeGroot, an analyst with Directions on Microsoft.

Brust agrees. "There is almost no such thing as 'coding for Vista Clients.' WPF and the entire .NET 3.0/3.5 stack run on XP, making the only real Vista-specific development arena that of desktop gadgets," he said.

When asked about that trend, Dino Chiesa, director of .NET Platform Product Management, said in an e-mail that Vista is "optimized" for next-generation applications and services, though he did not comment on the current overwhelming preference for XP today.

"Developers building applications in managed code on Windows Vista can also take advantage of native Windows Vista features such as the Search APIs, built-in RSS support, enhanced peer-to-peer APIs that enable additional richness in the application," he said.

Still, support for .NET Framework in Windows XP could dampen Vista deployments for some time, Foley said. "I think an interesting battle to watch this year will be whether Windows XP SP3, due out in the first half of '08, will affect businesses. If you have XP SP3 running well, why move to Vista? Why not just wait until 2010 for Windows 7?"

So how should development shops proceed? Cherry urges a conservative tack:

"My advice would be you always are looking at the current version -- what I call the version-minus-one," Cherry said. "What are the common set of features that are available in these versions, without anything fancy. And that limits what you write, because that is always going to give you the widest support."

Barbara Darrow and Jeffrey Schwartz contributed to this report.