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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  • 6 Posted by prsnrnr on Thu Sep 3, 2009 8:20PM EDT Report Abuse

    I don't think Vista is entirely to blame. Just one of many factors. As usual, Microsoft rushed the launch of a new OS and suffered the consequences. Why launch yet another when the new one is still problematic for many users? Furthermore, what sense does putting your "old" OS on all "new" Netbooks make? Essentially, MIcrosoft will be responsible for providing support for three different, buggy, security-deficient OS's at once. Microsoft is a weird company. No wonder everything they sell is over-priced... In Vista's defense, it does have potential as a stable OS. If only it weren't so needy, system resource-wise...

  • 7 Posted by mathuetax on Thu Sep 3, 2009 7:11PM EDT Report Abuse

    I strongly doubt the layoffs we're seeing have much to do with Vista but are more coupled to the nearly worldwide economic decline. Certainly Vista wasn't ideal, though I can't see how MS could have made the changes without causing pain. Whether the Vista issues were user created or MS is sort of under the bridge now. With Win7 however, since the break has been made I expect that it will do quite a bit better. My beta copy, while it is CERTAINLY beta, works reasonably well. Will Win7 harm Apple, I doubt it, though it might slow adoption. I don't see this as bad though as Apple needs to get some breathing room to grow, it's not had this much of the market in possibly two decades and it's been bending under the strain a bit.

  • 8 Posted by mlwhiteinc@sbcglobal.net on Thu Sep 3, 2009 7:23PM EDT Report Abuse

    I am sick & tired of all the cry babies complaining about Vista. I have been using Vista on my HP slimline. No big problems. No problem with drivers for older equipment. Drivers for older versions of windows worked just fine. I remember when each edition of windows came out particurly 98. Everyone had to upgrade memory and many times the computers. Xp is a good OS and Vista could have been better, but I found Vista is a far easier system to use. I can understand why Industry users were reluctant to use Vista because of compatibility problems and cost , but that doesn't justify consumers reluctance to use it

  • 9 Posted by rrcipolla on Thu Sep 3, 2009 8:53PM EDT Report Abuse

    You used "begs the question" incorrectly and colloquially.

  • 10 Posted by ssssreal on Thu Sep 3, 2009 9:39PM EDT Report Abuse

    People who are still beating the Vista dead horse have either 1) never used it, or 2) "heard that it was bad" and jumped on that band wagon without a clue as to what Vista does or doesn't do. I run Vista 64-bit on my home PC and it smokes Windows XP. MUCH more functionality, manages resources ten times better than XP, and definitely better eye candy. For people complaining about lack of drivers, that is SO 2007. I installed Vista in early 2008 and haven't had one driver issue with it - not one. It does require a little tweaking to get it running to your personal preferences, but go to any Vista tweak site (like tweakguide.com) and you'll find all the tips you need to get the best functionality out of Vista. Lastly, for those who think that Windows 7 is some brand new deal, it is nothing more than a souped-up version of Vista. Time to get over it, people.

  • 11 Posted by soumit.guha on Thu Sep 3, 2009 9:34PM EDT Report Abuse

    I have switched to MAC and running XP using VMWare My last Mac II was in 1984. Since then I went Windows 3.1, NT, 95, 98, NT 2000, XP, Vista I am happy with my Apple and am disgusted with the ost years running Windows What A POS

  • 12 Posted by choco_mamma99 on Thu Sep 3, 2009 3:23PM EDT Report Abuse

    Obviously you didn't get a laptop with Vista when it first came out. Only 1GB RAM to run Vista is not enough and when you are tight on money as it is, having to buy 2GB of RAM just to make this better is not good. Just imagine being a consumer who know nothing about installing their own memory and has to pay someone to do it. Now you are adding even more cost to something that should have worked a little more smoothly out of the box than it did. Having your computer run slow just because the OS and a program are fighting for memory is a pain. As for XP being obsolete in the next few years, I highly doubt it. Windows 2000 is still being used today.

  • 13 Posted by zinix50 on Thu Sep 3, 2009 11:00PM EDT Report Abuse

    I threw away $1500 on a New PC, just to be repulsed by Vista with no downgrade option. I gave it to the kids since they were learning new. So I use my 5 year cold XP with no intention of buying a new PC or any product from Microsoft for a loooooong time.

  • 14 Posted by outofthegame2013 on Thu Sep 3, 2009 7:47PM EDT Report Abuse

    I am a former Microsoft employee. (No I did not get whacked with the latest layoffs. I left 6 months ago for another company) I can honestly say, without a doubt that Microsoft makes nothing but crap. Almost every new product is rolled out first to employees, then to the world. When the Zune was release at the all hands meeting it did not work. They set up IPOD turn in stations where you could give your IPOD up for a zune. I saw one in the barrel. When Vista was released I refused to upgrade. After watching everyone else be down for en entire week, I said no thanks. So take it from me. Microsoft got lucky early on. Everything else is crap. I am definately an Apple guy now.

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

    Vista blows. I've been waiting to get another computer. May have to go Apple if Windows 7 doesn't come out soon

  • 16 Posted by michael_white2 on Thu Sep 3, 2009 7:18PM EDT Report Abuse

    What I believe they should do is... 1st) Go back to supporting Windows XP. and 2nd) Support drivers for hardware that only work under Vista. I had to get another laptop recently, and the only options I had was 'Vista only' for an OS. So, I bought the laptop and was about to change out the hard drive so I could put a copy of my Windows XP Pro on it. But when I went to look for drivers for the hard ware on the laptop, they didn't have any XP drivers. All of my co-workers prefer having their old machines repaired so they can avoid having to get one that has Vista on it. We're even looking at old laptop resales instead of the new stuff.

  • 17 Posted by bucyrus_99 on Thu Sep 3, 2009 3:15PM EDT Report Abuse

    As a Vista beta tester years ago, the product they had us test was outstanding with no issues, no bugs. The product they SHIPPED was entirely different with layers and layers of incompatible crap larded on.... like " a camel is a horse designed by a committee" kind of thing

  • 18 Posted by plc_is_here on Thu Sep 3, 2009 8:14PM EDT Report Abuse

    I think Vista is terrible. I can understand making some changes to improve things in a new OS but they changed things just for change. I recently bought a new Laptop with Vista and hate it. I wish I could down grade to XP Pro. I wish I had picked up a MAC. I used to be a big Microsoft fan. Not any more.

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

    Talk about something going downhill--I think Yahoo columns and reporting are right up there with Vista on the bad scale. Vista has caused the Microsoft layoffs? Vista has caused Microsoft's client software revenue decline? So PC customers are putting a different OS on their systems since they don't want Vista...and they're putting what? Microsoft client software sales are down because PC sales are down because the economy is down and netbooks can handle XP but not Vista. Good grief.

  • 20 Posted by monty_cole on Thu Sep 3, 2009 7:25PM EDT Report Abuse

    I bought 2 new laptops and suffered the nightmare of downgrading them to XP. With all the trouble of finding asian drivers and no support or warranty from MS or the manufacturer it's still better than having XP.

  • 21 Posted by asiant4871 on Thu Sep 3, 2009 2:58PM EDT Report Abuse

    I've been using a Mac for a little over 2 years, occasionally going back to my PC laptop for Windows only stuff. I plan to stick with XP for as long as I possibly can, and I suggest other users should too. Sure, Vista may have some cool new features, but the new OS every couple years is always just away for MS to get a cheap buck from us consumers. There's no real reason to ever switch OS's, and if enough people would stick to their old ones, MS would have to listen and we wouldn't be forced into buying the new ones.

  • 22 Posted by hardeight2008 on Thu Sep 3, 2009 4:16PM EDT Report Abuse

    The Microsoft execs, and especially, Gates & Ballmer, should be machine gunned on national television and I should be pulling the trigger. Alternatively, they should be parachuted into Warzistan to see if they can fight their way out using only copies of the Vista OS to defend themselves. Then they might get an idea of the helplessness that we--paying (through the nose) users--have. I wish them nothing but ruin.

  • 23 Posted by gmb1126 on Thu Sep 3, 2009 4:10PM EDT Report Abuse

    I would love to have Vista removed from my Vaio Notebook and downgrade to XP-Pro. I bought it June of 2008, and have had nothing but problems with the O/S even though it has 2GB of RAM. I have Pro on my PC and have had no problems with it. I would be one of the first, if not the first, in line to take advantage of a downgrade. I have sent my Notebook out for service and there seems to be nothing Sony can do to get it working right. I'm just happy I purchased the extended on-site warranty from Sony because I'd be out of more money! My son tried to talk me into buy a MACbook and now I wish I had even though I know nothing about MAC's.

  • 24 Posted by acorlett2005 on Thu Sep 3, 2009 2:45PM EDT Report Abuse

    Vista is the biggest piece of junk Microsoft has ever made. The security is horrid. Even after asking me 8 times if I am sure I want to run something, it still has big enough hole to drive a logging truck through. The performance is even worse. Would one you people who are saying that Vista is not “that bad” and should not be picked on for Microsoft’s downfalls, please explain to me why I can have a brand new computer with twice the RAM, twice the BUS speed, and twice the processor as my old XP machine and it takes twice as long to load the same piece of software. I don’t feel bad for anyone at Microsoft. Do you think any of them feel bad that blew $1000 on a computer with this crappy OS on it? I will never trust them again. My next computer will be a Mac, and I hope Microsoft goes down. I just hope my taxes don’t go to bail them out.

  • 25 Posted by joivoi on Thu Sep 3, 2009 4:39PM EDT Report Abuse

    Vista is stupidly fat huge. Why Microsfot has to make it so ugly fat, gobbling up so much pc resources. Hate it, never want to use it.

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