Susan Hall spoke with analyst Roger Kay, president and founder of Endpoint Technologies Associates.

Hall: Is this gnashing of teeth over Vista essentially any different than when XP came out?
Kay: Microsoft made the case that that was true when Vista came out, but I think after a year has passed that this is a different quality of event. When a new version comes out, there are a lot of issues for corporate customers, and that’s true at any launch, but those issues tend to clear up. In this case, it’s been slower to clear up.

The other thing was that once people understood that XP worked pretty well, they actually were pretty happy with it. The problem with Vista is that it’s so incredibly heavy, it takes a lot of resources. If your PC isn’t incredibly muscular, it just doesn’t work very well.

One thing it can do is explain how to create a smaller footprint with Vista. It has all these services running simultaneously at boot-up -- there’s Tablet and Apple Mobile Devices and others. They could explain to people how to go in and turn a bunch of these things off to make it work better.

Hall: A recent USA Today story referred to the reception of Vista as similar to that of New Coke, which bombed, and Coca-Cola did a reversal. Do you see anything along those lines happening with Vista?
Kay: Microsoft has some things that it can do. One is to pull in the release of Windows 7 so it happens sooner. But I was recently in Las Vegas with a bunch of Microsoft people and they said Windows 7 isn’t that different from Vista. It’s based on the Vista code. So I urged them to at least make it modular so you don’t have to load it all to have anything work. Some people are talking about not going to Vista. But whatever the issues are, the new driver models, the graphics model, they’re still going to have to make that transition to Windows 7 if they haven’t already. They still have to make the steep climb up this new architecture, and in some sense it’s an even steeper climb (if they don’t go to Vista). But I’m hoping they at least correct some of the mistakes of Vista, the resource hungriness of it, the user interface, which is essentially that you see the slowness of it, the difficulty of doing things and the busyness of the operating system and the lack of modularity. If you didn’t have to boot all these things at once, you might not have as heavy an experience. But I did not hear that they’ve learned their lesson and are going to make (Windows 7) all that much better.

Hall: Can you recall whether any of Microsoft’s products has been this unpopular?
Kay: No, I think this launch has been the most difficult in Microsoft’s history. Windows 95 had a tremendous reception and it heralded Microsoft’s dominance in operating systems. Up until that time, Apple was popular and UNIX, OS2 and others. But after Windows 95, it was game over. Windows Millennium was a consumer operating system that wasn’t very widely adopted. People liked Windows 98 and Windows 2000 and tended to go with one of those. People thought XP was a pretty good improvement after a little debugging time.

Hall: Do you think the company is listening to the customers? There’s a whole new set of executives coming in. Do you see the company’s whole attitude toward dealing with customers changing at all?
Kay: The group I was with in Vegas was the Server and Tools group and that’s one of the healthiest groups at Microsoft. It has good customer relations, the software is really good and they’re really doing well with the enterprise. There were probably 2,000 developers in the room who were applauding new (upcoming) features in demos. People were applauding the elegance of how the company had integrated things they’d been asking for into the products.

On the Windows side, though, I think there’s a disconnect between the users and the Microsoft developers. My impression is that they don’t listen in a lot of cases in that division, and I think a lot of it is that the technology itself has a certain momentum. They can’t just junk it and start fresh.

Hall: Well, some people have suggested that.
Kay: From a practical perspective, they can’t do that. They could start a different sort of development. They could do what Apple did, take a Linux kernel and build on top of that and build a thing that sort of looks like Windows, but has a whole different way of dealing with its services and so on.

Apple went through all that pain in 2001 of telling its user base that they would have to abandon old programs because they wouldn’t work anymore. But unlike Microsoft, the new world that Apple offered was much more appealing and people decided they’d do it. Apple promised not only that the new features would be better, but the whole look and feel would be prettier and easier to use. So people decided they’d drop their compatibility issues, buy new software and all those things. They’d groan about it, but do it anyway.

The difference is that Microsoft has broken everything that worked before, but hasn’t offered a compellingly better alternative. Up until the launch, Vista was advertised as prettier and better, much safer, even with better performance, and clearly that’s not true. It has lower performance. You can’t have a new OS that performs worse than the old one. Actually, after launch I had a series of problem with Vista, but recently I haven’t as much. With Service Pack 1 and other updates, they have fixed a number of issues that had been causing crashes and stuff. So it’s getting better, but it’s still not compellingly better enough to get people to make the transition.

The issue on the corporate side is all these home-brew apps, 20 years worth of investment that they don’t want to throw away. And they say, "I need to run my stuff. You can’t break my stuff. That’s where my biggest investment is." And I don’t know why Microsoft thought it was OK to do that, why they didn’t realize that’s a huge problem for enterprises. These companies have millions of dollars in apps that are homemade, designed to do just what those businesses do.