Windows 7 Licensing 'Disaster' Looming for XP Users

Windows 7, due to ship on Oct. 22, has gotten good reviews as the OS that Vista should have been. And the large percentage of businesses that have held onto XP rather than go to Vista -- about half, according to Gartner -- are no doubt planning to migrate to Windows 7. But Microsoft may be making it harder and costlier for them to do so, notes Gartner analyst Michael Silver. "It's a disaster waiting to happen," he says.

Microsoft's potential XP downgrade trap

Under Microsoft's planned enterprise licensing rules, businesses that buy PCs before April 23, 2010, with Windows 7 preinstalled can downgrade them to Windows XP, then later upgrade them to Windows 7 when they're ready to migrate their users. But PCs bought on or after April 23 can only be downgraded to Vista -- which is of no help for XP-based organizations, Silver notes -- and could cause major headaches and add more costs to the Windows 7 migration effort.

[See why InfoWorld's Randall C. Kennedy says XP mode is the right idea but the wrong implementation. | Preparing for Windows 7? Get the overview you need in the Windows 7 PDF Quick Guide from InfoWorld's J. Peter Bruzzese. | And download our free Windows performance-monitoring tool. ]

Microsoft's PR firm tells InfoWorld, "It looks like Microsoft hasn't made any announcements around timing for downgrade rights from Windows 7 to Windows XP yet." But Microsoft has discussed the six-month limit with Silver multiple times and characterized it to him as a "public" policy. The policy is also clearly visible in a Microsoft PowerPoint slide (available for viewing at InfoWorld).

Both Forrester Research and Gartner advise clients to wait 12 to 18 months after Windows 7 ships before adopting the new OS, so they can test compatibility of their hardware and software, as well as ensure their vendors' Windows 7 support meets their needs. But Microsoft's six-month downgrade restriction for XP means that the businesses that chose not to install Vista have to rush the migration process. Or they can spend extra money and enroll in Microsoft's Software Assurance program, which then lets them install any OS version at the price of the extra yearly fee (about $90) per PC. "Microsoft will probably get more money out of [this policy]," Silver says.

For businesses not willing to pay extra for the Software Assurance program, Silver sees real headaches coming, which ironically could slow the adoption of Windows 7 by XP-based businesses. Organizations could buy more PCs than needed by April 22 to essentially stock up on XP-downgradable Windows licenses, but that distorts their purchasing costs. Or they could buy PCs as needed after April 23 and either live with Vista or Windows 7 on them -- perhaps allocating those systems as test units instead of regular production systems -- or buy XP licenses from retailers that still have them in stock. Tracking which PCs have which downgrade rights in IT asset management systems, though, "will be difficult," Silver notes. "Microsoft has made a real mess."

"Users need to say this policy doesn't make sense," Silver advises, and try to convince Microsoft to change it. Consumer pressure has worked to sway Microsoft licensing policies before; notably, businesses' strong resistance to Vista caused Microsoft to extend the availability of Windows XP several times in various forms.

The perils of using XP mode

Silver notes that Microsoft is sending mixed signals to XP-based users, given that it will include a license for XP as part of Windows 7 Ultimate in what is called XP mode. In XP mode, a virtual machine can run Windows XP in parallel to Windows 7. But this approach doubles IT's workload, as it must deploy and manage two OSes per PC: Windows 7 and Windows XP. "That's not optimal," Silver says. And because many PCs can't run the Virtual PC technology that makes XP mode work, IT will face compatibility complications as well.

Silver suggests that XP mode will end up being used only for XP applications that can't run under Windows 7 (whether or not they're formally supported in Windows 7 by their vendors). But there may be more of those than IT realizes. The reason: Web apps tuned to Internet Explorer 6, which Microsoft has essentially orphaned. Windows 7 will ship with IE8, which has a compatibility mode for IE7, but not for IE6. And if IT retains IE7 in Windows 7, Silver notes that IE7 lacks an IE6 compatibility mode. So IT must rework its IE6-dependent Web apps or use XP mode to run IE6. Both are hassles.

Other questions on moving to Windows 7

IT needs to work through several other issues when figuring out its Windows 7 migration strategy, Silver points out.

One key issue is that Microsoft has yet to make public the details of its Technology Guarantee program or even say if there will be one that covers business purchases. The Technology Guarantee program gives free upgrades to Windows 7 on PCs purchased after a certain date. That's crucial for businesses that plan to adopt Windows 7 soon, so they can time their hardware purchases to avoid paying for a Windows 7 upgrade shortly after buying a PC shipping with Vista. (Businesses that use XP technically buy a computer with Vista and then downgrade to XP, so the Technology Guarantee program applies to them as well.) Of course, businesses with the Software Assurance plan have, in essence, already paid for the ability to install Windows 7 when they want.

The other key issues don't involve Microsoft. Silver says that even if applications designed for XP or Vista run on Windows 7, that's no guarantee that the software vendor will support them on Windows 7. Some vendors are planning to ship Windows 7-oriented upgrades that IT must buy to get continuing software support, he notes -- and some are even planning to use Windows 7 support as an excuse to increase prices.

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