Microsoft layoffs: Is Vista to blame?

Fri Jan 23, 2009 1:56PM EST

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In Microsoft's public speeches and press releases, CEO Steve Ballmer has portrayed Windows Vista as nothing short of a wild success, an operating system that has sold millions of copies to adoring fans worldwide.

Alas, reality has finally come into sobering focus: Microsoft's recent earnings report show not just a $900 million revenue shortfall vs. earlier projections, but a serious weakness in one critical part of its business: "Software client revenue" (aka Windows Vista and remnant sales of XP), where sales are down 8 percent vs. last year. In comparison, the company showed growth in some of its other businesses, including the Xbox division (up 3%) and the server business (up a whopping 15%). Also to blame in the poor results: online services (such as Hotmail) and, of course, the Zune, which hemorrhaged $100 million in the last quarter as sales fell off a cliff.

But overall softness aside, all eyes are on Vista, traditionally the source of a massive portion of the company's revenues and profits. The main problem of course is that the sale of Windows is closely tied to the sale of PCs, and with PC sales on the decline due to general economic conditions, sales of Vista have fallen as well. 

That begs the question, though, of what degree the poor reception of Vista has been a driver for said decline in PC sales. Gartner has compared Vista to the embarassment of New Coke, noting that many businesses and individuals -- and probably many of you out there -- are skipping Vista and sticking with Windows XP until Windows 7 comes out. With just a year to go until the new OS, there's really no reason to upgrade now, and that bodes poorly for sales in the year ahead.

Of course, none of this is likely to be comforting to the 5,000 Microsoft employees losing their jobs in what is the company's first major layoff in history.

What will Microsoft do? Soldier on, and finish up the glowingly-previewed Windows 7 as quickly as possible, I'd imagine. What should it do? How about offering free XP downgrades for all Vista users (both new buyers and existing ones) in order to salvage what's shaping up to be a grim 2009.

Comments on Microsoft layoffs: Is Vista to blame?

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  • 26 Posted by missglance on Thu Sep 3, 2009 7:21PM EDT Report Abuse

    Vista is a farce. That is the worst windows version I have ever used. I spent more time with tech trying to get problems worked out that I did using the pc, the first year. They should give a XP to everyone who purchased a Vista. Or 50% off the new 7 when it is guaranteed to be ready.

  • 27 Posted by rcmit on Thu Sep 3, 2009 8:31PM EDT Report Abuse

    I never thought that I would do it after having used PC's since IBM sold their first unit (the one with two floppies), but I went out and bought an iMac yesterday. I took it out of the box, plugged it in, answered a few registration questions, and I was on line and working - in less than five minutes. Now I feel like a fool having wasted so much money and time on PC's. I'll finish migrating everything this weekend and never look back.

  • 28 Posted by happykid279 on Thu Sep 3, 2009 4:16PM EDT Report Abuse

    finally ms is feeling some pain for putting out untested os. it probably wont help for them rush the release of windows 7... and the cycle of releasing low quality os repeats itself. will google offer an os for pcs someday??? i can't afford a mac.

  • 29 Posted by im683t on Thu Sep 3, 2009 4:23PM EDT Report Abuse

    Microsoft should fire the management and folks who wrote the code, not just lay them off. Windows 7 looks to me like Vista with some of the bugs fixed and they expect me to run out and buy a copy? Maybe they would regain some respect if they gave it away. Unfortunately, they are not the only U.S. company who touts themselves as world class, but deliver 3rd. rate products.

  • 30 Posted by mindtraffic2002 on Thu Sep 3, 2009 7:21PM EDT Report Abuse

    I wasn't a big fan of XP when it first came out and left my desktop as 2000. I got used to XP and swore I would never go to Vista simply because it would have required buying all brand new equipment again and that is just not going to happen. I have hated mickeysoft for many years and the only reason I used XP was because it was on my laptop. When I started having issues with XP, I said forget this and upgraded my laptop to Linux and I haven't been happier. I refuse to be held prisoner to microcrap and won't use their products unless I absolutely have to, which is very, very rarely. Those that say they love Vista can have it.

  • 31 Posted by pclaypool on Thu Sep 3, 2009 8:04PM EDT Report Abuse

    I hate to inform the writer of this article but installing XP over Vista doesn't always work. I tried it on my new HP laptop and when it didn't work. (Many of the drivers wouldn't load) I checked HP's website where they inform their customers that have have put safeguards on all of their computers with Vista so that XP won't install. According to their website if you try you will eventually have to reinstall Vista. Which I finally swallowed my irritation and did.

  • 32 Posted by da_h4ck on Thu Sep 3, 2009 3:38PM EDT Report Abuse

    I remember 10 years ao when the Linux Nerds sounded the death nell for Windows. Then Larry Ellison said that we would be using a $500 "thin clients". Then the UN said that it would produce $100 laptops for the third world minions. (Which of course US taxpayers would fork over the $'s) I know of one company, Genentech, that positions itself as a Mac company. They suffer huge produciton losses but ignore it. Hmmmmm. I wonder if it's becauase the CEO is on Apple's board of directors. Naw, that's too cynical. Bottom line is Windows is still here and it's not going to leave. If you want to run a productive company you have windows on the desktop. Period.

  • 33 Posted by mharris802000 on Thu Sep 3, 2009 7:17PM EDT Report Abuse

    Hopefully our P4 running Linux and Dual-boot Linux/XP AMD64 will hold out for awhile longer. From here on out, I'm building my own, just so I don't have to go through the headache of dealing with whatever worthless OS Microsoft has out at the moment. Seems like nearly every one from 95 on has been rushed to the market and suffered all sorts of nightmarish problems. And still MS refuses to learn from the past. No wonder things are going south for them.

  • 34 Posted by gavincurtis on Thu Sep 3, 2009 4:06PM EDT Report Abuse

    All of our computers at work were 'downgraded' from Vista to XP because of driver compatibility issues. When you have CNC machines, PCB routers and IC programmer/emulators that have non Vista compatible drivers you can't simply toss them out like a cheap printer. Nor am I going to pay to retrain people on new Vista compatible equipment. Why doesn't Vista have an emulator to allow backwards compatibility?

  • 35 Posted by liana_mirkin on Thu Sep 3, 2009 6:50PM EDT Report Abuse

    Vista STINKS! It crashes constantly, will not run old DOS games (and many other programs that can run on XP) and treats its users like they have an IQ of a 4-year old! I have Vista at the office and on one of my laptops at home. I was SOOO glad to get one of the new Acer Mini's that came out over the holidays. A lot of the new minis (including Acer) run XP instead of Vista because of Vista's intensive memory requirements. What a slap in the face for Vistal!!! Whether Microsoft likes it or not XP will be around for a lot longer than they think!

  • 36 Posted by stuffbegone on Thu Sep 3, 2009 9:46PM EDT Report Abuse

    I have a new Dell XPS 420 that shipped with Vista, and it's the least stable computer I've got. (The others are XP and Windows 2000.) Just last night it had a "freak out" and went into self repair mode, and I barely use it. It's just for video editing and occasional web surfing on sites I know and trust. I've also had it more than once freak out and start opening Explorer browser windows at the rate of about five per second. Once I was able to stop it with Task Manager, and once I just had to pull the plug on the machine. Also, from a useability standpoint Vista is needlessly baffling. It's like change just for the sake of change. I hope not to buy a new computer for a long long time.

  • 37 Posted by richardcoreno on Thu Sep 3, 2009 8:39PM EDT Report Abuse

    When has Microsoft ever made a mistake? The company continually wraps verbiage around "errors" in a game of semantics. But nothing can be spun to make Vista anything more than the complete disaster it is....and Microsoft would have loved to fast-tracked XP's demise to force consumers into a system where they would have been nothing more than guinea pigs as the severe problems were "worked out" over time, with no alternatives in the marketplace.

  • 38 Posted by jjester1999 on Thu Sep 3, 2009 4:35PM EDT Report Abuse

    I believe that many users have forgotten that XP didn't release with glowing reviews either. XP started out just as rocky as Vista has. I believe that the brand new users to computers that are not as familar with Windows are comfortable working through the bugs of Vista. Windows 7 in it's beta format appears nicer and that it is a slimmed down less resouce hogging Vista. Microsoft went for pretty and all the bells and whistles .... not for what the standard consumer is used to. If you aren't happy you always have Mac or linux products to fall back on.

  • 39 Posted by defcon888 on Thu Sep 3, 2009 3:40PM EDT Report Abuse

    I have XP on my laptop and Vista on my PC (family). I like both of them. I like the "parental" features of vista....yes, I know I could download a 3rd party software to do the same thing, but WHY?. Yes, Vista is a mem. pig and I would reccomend 4GB min. I have been using a 2 year old mac at work and I really like it....does that mean I will give up the MS ghost?......probably not for a few years until the kids are out of the house. I will then more than likely get a MacBook. My problem with Apple is that a lot of the software I have won't run on the APPLE (even with the emulator...i.e. AutoCad, Solidworks). Also, I don't like the "Religion of Apple"....I work in Silicon Valley and they people are ravenous users....like the Computer crips and bloods. I am looking forward to Windows 7 and more than likely WON'T upgrade for a while if at all.

  • 40 Posted by borsia2003 on Thu Sep 3, 2009 3:11PM EDT Report Abuse

    I recently bought a Toshiba laptop with Vista on it. It was terrible a huge memory hog. It came with 2GB of RAM and Vista soaked up almost an entire Gig just running without any programs open. I am a photographer and travel writer and, running Vista, I could only open 1 image file at a time in Photoshop. I went through a week of torture getting Vista off and installing XP Pro. Now the laptop is easily 4 timers faster and I can have 8-10 image files open at the same time with no problems. There are still driver that I can’t find. I have to use a USB sound card but even as a mute XP is night and Day better than Vista. Before Vista I was a true PC guy; but now I tell people to buy MAC. From what I have read about it Windows 7 isn’t any better than Vista

  • 41 Posted by da_h4ck on Thu Sep 3, 2009 3:38PM EDT Report Abuse

    I work in IT and here's examples of users complaints. User: "The new computer you rolled out to me with Vista is slow, I can't get anything to work and it continuously crashes. If you can't get it to work then I want my old computer back!" IT: Have you installed any software on it? User: Of course not. IT: What is this Weather bug icon doing in the system tray? User: Well that's just to get the tempurature.. IT: Has anyone else used this computer? User: Only my 13 year old son on the weekends. IT: Did you click the "Get a Free IPod" icon on a website? User: Well yes but what's wrong with that?.....

  • 42 Posted by wallysider on Thu Sep 3, 2009 10:40PM EDT Report Abuse

    Ok, read bunches of posts here crapping on Microsoft. I think Microsoft has a fine product. I use XP myself and so far don't feel the need to upgrade. I've used Vista and I haven't had any problems really. I have Windows 7 installed and it runs just fine for me too. Right now I feel XP is the better operating system, it just runs better for me. And all you Mac fanboys, OS X is a nice operating system I agree, but for what I want to do it isn't good enough. I'm a gamer and Mac doesn't support as well as Microsoft period.

  • 43 Posted by timbevil on Thu Sep 3, 2009 10:10PM EDT Report Abuse

    I struggled with Vista's "lack of Wow" for a year, especially the ultra-lame UAC feature. Then Microsoft admits publicly that the UAC feature was meant to annoy AND they offer no tweak or fix if we prefer not to have it. UAC sunk Vista...anything else we would have endured, but make no mistake, UAC in Vista killed it.

  • 44 Posted by rural1us on Thu Sep 3, 2009 8:55PM EDT Report Abuse

    We cannot stand the frustration with the Vista anymore. We are in our seventies and enjoy email, but not with Vista. If the Vista is what computers are all about, we'd rather give them up. What an user unfriendly machine. We hope Microsoft realizes that has itself an "Edsel". Let;s hope they make an adjustment.

  • 45 Posted by joseph_edward_dejesus on Thu Sep 3, 2009 4:41PM EDT Report Abuse

    Microsoft is planning to release Windows 7 too early in my opinion. They're rushing to get it out to the world, which is gonna cause them to overlook way too many flaws as they rush. They need to take more time and MAKE SURE that this OS is going to work as effectively as possible. They need to go back and ensure that using this OS will have versatile backwards compatibility with earlier versions of windows, and make it possible for users to upgrade hardware and drivers, without the conflicting problems that Vista has. Even when it does come out, I would hope that whatever flaws it has can be reduced greatly with service pack releases.

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