Windows Vista Release Pushed Back to January 2007

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Broad availability of the Windows Vista client operating system has been pushed back to next year, according to Jim Allchin, Microsoft's co-president of the Platform and Services Division.

Microsoft does, however, plan to release Vista to business partners through its volume licensing program in November 2006, Allchin said in a conference call today. This will enable those partners to begin deploying the OS throughout their businesses.

Microsoft also intends to release all six of Vista's core editions to manufacturing at the same time in November, Allchin said. But PCs with the consumer versions preinstalled won't go on sale until January.

The consumer editions of Vista, which Allchin said have not changed, are Windows Vista Starter, Windows Vista Home Basic, Windows Vista Home Premium, and Windows Vista Ultimate. The business editions--Windows Vista Business and Windows Vista Enterprise--will be available through volume licensing in November.

Microsoft said that Vista's delay won't affect the release of Internet Explorer 7 for Windows XP in the second half of the year. IE 7 will ship as a feature of Vista, and Microsoft had previously said that the version of IE 7 for XP would be released at the same time as the new OS.

Quality Concerns Cited

Allchin would not give specific reasons for Vista's delay, but he said that it involves a quality issue and that partners had requested the delay. He said that the partners wanted Microsoft to provide them with a clear date for release because Microsoft seemed unlikely to have the OS ready in time for them to ship it on hardware by late November. That is when the busy U.S. Christmas holiday buying season begins; Microsoft had originally targeted that time for the release of Vista PCs.

"We're just trying to be responsive to their concerns and also be forthright about where we are in terms of being a few weeks late for quality," Allchin said.

But at least one analyst suggested that Microsoft should be worried, since the delay will have a major affect on Microsoft's entire partner ecosystem.

"They will miss out on the lucrative holiday season, and this move will definitely slow down growth in the PC industry," said Sam Bhavnani, a principal analyst with Current Analysis, via e-mail. "The impact is far reaching and will have a significant impact on computer manufacturers, resellers and ingredient players."

In an interview in January, Allchin had said that he would delay releasing Vista if the OS did not reach a standard of quality that he was comfortable with. In today's conference call, he said that Microsoft wanted to give customers a firm date for when the company could deliver Vista broadly, and so the company decided to push the release back to January of next year.

Microsoft said that it is not concerned about rival Apple Computer capitalizing on Vista's delay. The company thinks that customers will still buy Vista simply because of the rich features it will provide.

Wall Street Reacts

Wall Street reacted negatively to the news, as shares of Microsoft and hardware partners Dell and Hewlett-Packard slipped in after-hours trading Tuesday.

Financial analysts noted that the news will force hardware partners that were expecting a holiday surge from Vista PC sales to revise their financial expectations.

On Target With Beta Schedule

Microsoft is on target to release another Community Technology Preview of Vista by the end of June, completing the Beta 2 process of the OS, Allchin said. At this point, Vista is already feature-complete, and any tweaks made to the OS before its final release will be for quality, he said.

"It's not new work that we're adding," Allchin said. "It's simply...[work in] continuing to make this the most safe and secure system that's ever been."

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