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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  • 66 Posted by mregor532 on Thu Sep 3, 2009 7:27PM EDT Report Abuse

    Vista is a turkey. I bought a Dell in Sept 2007. It came with Vista. I had no choice. Today the system had a lockup. The only way I could get control was to push the power off button. I was not doing anything that I had not done yesterday or the day before or the day before that. No new software, just doing what I always do. Vista is still not a stable operating system. You would think that using processors that support virtualization, each application can be isolated from the operating sytem, there would be no crashes of the entire computer. I have two desktop machines. One runs XP, the other Vista. Today I had to push and hold the power button. Guess which machine it was on!

  • 67 Posted by passthetab on Thu Sep 3, 2009 8:00PM EDT Report Abuse

    The real problem is Steve Ballmer. He's the main culprit that has taken Microsoft to the cleaner along with the 5,000 ex-employees with it. What a shame this guy is still employed. This man absolutely has no talent whatsoever. Kick this piece of dirt out the door NOW!

  • 68 Posted by mitchmieciu on Thu Sep 3, 2009 7:22PM EDT Report Abuse

    There is noting about Vista,Microsoft hired pepoles from india.So 5000 americans havve to go home.simple.visa H-1B

  • 69 Posted by jayhr875 on Thu Sep 3, 2009 4:29PM EDT Report Abuse

    I have Vista and haven't had one problem yet. Perception isn't reality.

  • 70 Posted by cummings75089 on Thu Sep 3, 2009 3:32PM EDT Report Abuse

    Same ole you gotta get one every 3 years thingie from Microsoft so they keep millions of $ flowing in. Wasn't there a Windoes ME between Windows 98 and Windows XP? If I recall, ME was about as big a deal as Vista is now. Wan't Windows 2000 just a souped up version on Windows NT? It's Microsoft. It's what they do. It's who they are.

  • 71 Posted by ridgiemadness on Thu Sep 3, 2009 8:40PM EDT Report Abuse

    Yup. I have an old desktop that needs to be replaced, but I don't want Vista. I tried using it on another person's laptop and all about tossed it. Vista is like trying to order a small coffee at Starbucks.

  • 72 Posted by rocket@prodigy.net on Thu Sep 3, 2009 8:47PM EDT Report Abuse

    Yes Vista is a big problem for Microsoft. It is an operating system specifically designed to force the public into purchasing new computers. I believe the computer makers were well aware that the new systems with P3 or P4 processors along with Windows XP would allow the public to use those computers for about a decade without purchasing new hardware or software. Microsoft attempted to fix that problem by developing Visa, an operating system that required so much power to run you were forced to purchse a new computer and of course new operating system. And don't forget, discontinuing support for XP which means it could no longer be activated when have to reload after the spyware ruined everything. Yup, quite a lucrative plan. You see Vista had no need to require 1gig of ram and half your hard drive to run, it was all by design to make you purchase new.

  • 73 Posted by el_shaithan on Thu Sep 3, 2009 3:54PM EDT Report Abuse

    I agree on one thing that people really are waiting for Windows 7 to upgrade since am one of them.. Yeah XP is running out, not because its bad at all, its good really good but its basically getting a bit old, so people were looking for a new look look new generation OS for the future. Instead they get dumped on by this memory hog called Vista and all the compatibility issues were deliberately created, my opinion, to make us spend more on the useless stuff.. Vista tuned out to be a real loser and its overpriced man.. Am waiting for w7 and i hope they price them reasonably and I hope they provide upgrades for XP a bit more longer..

  • 74 Posted by bj144608 on Thu Sep 3, 2009 3:08PM EDT Report Abuse

    Having had Vista Ultimate for a year before it was released ( Beta testing ) and now beta testing Windows 7. The flak Vista gets is undeserved. I have it on 2 of the 3 computers we have all built by me. Only the one my wife uses has XP and i hate using it when i have to do maintenance on it. Funny how Windows 7 gets rave reviews as it is more a improved Vista than anything else. Little Bic

  • 75 Posted by bigupbookings on Thu Sep 3, 2009 3:07PM EDT Report Abuse

    VISTA SUCKS, BUY AN IMAC PEOPLE IT"S WORTH IT!!!. ENOUGH SAID. BILL GATES IS A TOOL. NEXT TIME GENIUS TEST YOUR SOFTWARE AND MAKE SURE THAT OTHER PROGRAMS ARE COMPATIBLE WITH IT BEFORE YOU SELL IT! YOU DID THIS TO YOURSELF. RICHBOY! BUT HEY WHAT DO YOU CARE YOUR A BILLIONAIRE! GREAT JOB ON THE LAYOFFS TOO! YOU SHOULD HAVE STUCK WITH XP. AND WORK ON YOUR SECURITY WITH YOUR OPERATING SYSTEMS. IT'S SO EASY TO GET A VIRUS WITH ANY WINDOWS PROGRAM!

  • 76 Posted by daytrippr.rm on Thu Sep 3, 2009 3:38PM EDT Report Abuse

    Like some of the other posters, I've put off buying a new PC because I don't want to have Vista shoved down my throat. Yes, by all means, continue to patch XP and wait to release the next Windows until it is actually debugged and retro compatible! But wait, that would actually make people happy and cut down on our headaches.. that almost goes against Microsoft corporate policy! Case in point: I bought a Zune and returned it immediately. "Piece of crap" is too kind a description. A microsoft product that wasn't compatible with microsoft formats and windows? Sweet! If you have one and like it, get rid of it and try an Archos or an Ipod, you'll probably wet yourself with joy.

  • 77 Posted by jstormy999 on Thu Sep 3, 2009 4:43PM EDT Report Abuse

    With how poorly Vista has performed I am looking into other operating systems for the first time. I don't trust Microsoft 7 to be the answer/improvement for Vista. Microsoft needs to build an OS without trying to be the hall monitors to the world.

  • 78 Posted by dragonfireresurrected on Thu Sep 3, 2009 3:47PM EDT Report Abuse

    upgrading from vista to XP is relatively easy yeah collecting the drivers may be a bit of a seek but once you got them all i have yet to find a computer or laptop that i couldn't convert to XP, in fact you often find the drivers zipped up for d/l on the net if you do some searching as the conversions are becoming quite popular and people are pre packing the drivers for others There is simple no reason Vista should need so much resources, it's a shame when you got quad cores that can run Vista, and yet my dual core is faster in Xp than a Quad Core in Vista, you have to wonder why MS cannot strip out the bloat Toshiba Laptop Satellite A215 - converted Compac Persario C700 - converted

  • 79 Posted by chizow_2000 on Thu Sep 3, 2009 3:23PM EDT Report Abuse

    I'm sure someone has already said it but.... The decrease in revenues is most likely linked to the worldwide decline in PC sales over the last quarter, not any conscious decision made by consumers to snub Vista. Microsoft's software revenue and OS sales are still heavily linked to PC sales, so fewer PC sales means fewer OS sales. Check recent press releases from the following companies that all point to a global decline in PC demand for their poor financial outlooks for this quarter and next: Intel AMD Nvidia TSMC Infineon etc.

  • 80 Posted by jknolan00 on Thu Sep 3, 2009 4:36PM EDT Report Abuse

    Windows Vista has created sales and fueled the economy! Unfortunately for Microsoft these have been Apple sales! Everyone I know who has purchased a new computer has gone to the MAC! I love XP Pro and will ride out the storm till 7. But Microsoft needs to give up on the Vista lemon and make sure they get 7 right before it goes public or MAC sales will just continue to grow!

  • 81 Posted by felixm109@verizon.net on Thu Sep 3, 2009 3:59PM EDT Report Abuse

    Late in life, I learned on a used XP. What a sense of great discovery. I outgrew XP quickly,I then bought a vista. What a great disappointment. My old machine could not support the engineering programs I use, so I purchased my current Vista PC. I cannot afford trial and error on high cost items that may or not work. I have many problems with Vista , mostly dealing with what I want to, do versus what Vista will allow me to do. I loved XP, I am learning to live with Vista. Not the way it should be.

  • 82 Posted by tada2 on Thu Sep 3, 2009 9:54PM EDT Report Abuse

    I want to buy a new laptop but have heard so many horror stories about Vista that I am holding off. I have also been considering a Mac and especially like the reduced virus and trojan problems they have. Yes, Microsoft is having a negative impact on the entire PC industry. Most seem content to stay with their old outdated machines than put up with Vista problems. Most of what everyone has heard is negative. The msgs in this post are 4 to 1 negative. The memory requirements are unbelievable.

  • 83 Posted by darkrealmphx on Thu Sep 3, 2009 3:36PM EDT Report Abuse

    I find it interesting that so many people want to bag on Vista. I have been using Vista since the summer of 2007 and have had no real issues. The only time I reboot is when there is an update or I have installed new software that requires rebooting. Sure, in the beginning there were some issues with old software that I installed, but it was easily solved and not a problem since. - People complain that Vista is a memory hog, but they forget about all of the programs we love to install on our computers: AIM (resource hog), YIM (buggy resource hog) and so many others. - In reality, Apple has been very successful with their propaganda in claiming that Vista, compared to their OS, is crap and this AFTER all of the complaints in regards to Apple's OS.

  • 84 Posted by firetechman on Thu Sep 3, 2009 4:00PM EDT Report Abuse

    . Two quotes Re: Vista . "So how's that working for you?" . "Ya Think?!" .

  • 85 Posted by jim0214 on Thu Sep 3, 2009 4:35PM EDT Report Abuse

    I've been reading all the comments about Vista. To do that I'm using Windows 98SE. Built the computer myself with many upgrades and system files updates over the years. Finding drivers is getting a bit tricky. But Vista came that way. My OS can rock with the best XP. And 98 doesn't call home to big brother to check my OS making sure it's legal me to use. Wouldn't want to cheat MS out of their money!!! I'll stay with my little 300-megabit dead horse till the bitter end. Then move on to Linux. MS can kiss me where the sun doesn't shine.

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