Fear is the Key

So, why is Microsoft adopting in this alarmist approach? The answer seems simple enough – the opportunity to sell thousands of licenses of its latest operating systems

With barely five months remaining before Microsoft stops all support of its 12-year old Windows XP operating system, the company seems to be adopting scaremongering techniques to coerce users to upgrade from XP.

At least that’s what it seems so, with the latest research sponsored by Microsoft suggesting that some 34,115 Indian PSU bank branches are at risk due to the continued use of Windows XP. The report also notes that letting such a situation continue could result in loses of a whopping Rs 1,100 crore worth of business opportunity a day for banks.

The report, titled Strategic Impact of End of Support of Windows XP on Banks in India, states that banks could see a loss of income to the tune of Rs 300 crore over a period of three days—given that it takes that long for a major incident to be resolved and the system to be up and functioning normally. Essentially, through this report, Microsoft seems to be putting the fear of losses and lost revenue opportunity into the hearts of the Indian public sector banks’ managements. Seems to be an interesting strategy—if you can’t convince them, scare them.

Now, let’s understand one thing. The CIOs or the IT decision makers in the Indian banks are not fools and would be well aware of Win XP’s end of support deadline and the risks it poses to their operations. The fact is organizations, more often than not, calculate the benefits that new software purchases or upgrades would provide against the risks of not doing so before making any purchase decision.

Now, it’s not as if Indian PSU banks haven’t upgraded from Windows XP at all. Of the estimated 70,000 branches, the report states that about 34,000 branches—or about half the total number of branches—are at risk. But, of these 34,000-odd branches that still have some PCs—and not all—that run Windows XP, between 30 and 60 percent of the PCs have been already upgraded and surely some more upgrades would be on their way.

Also, these estimated 70,000 bank branches put together have over 500,000 PCs between them—with the smaller rural branches having as little as four PCs per branch and the bigger branches in metros having tens of PCs in each branch. Of these, a little over 100,000 PCs—or less than a quarter of the total PCs—are estimated to be running on Windows XP. This is a less scary situation than what the Microsoft-funded report portrays.

So, the fact that some PCs in some branches still haven’t been upgraded from XP till now perhaps indicates that the benefits of not upgrading have far outweighed the risks associated with not doing so. Essentially, the Indian PSU banks—and their CIOs—have voted with their wallet and sent a clear message to Microsoft that it’s not time yet to upgrade.

So, why is Microsoft adopting in this alarmist approach? The answer seems simple enough: The opportunity to sell thousands of licenses of its latest operating systems. And Microsoft is realizing that this is the right time to crank up the volume. And there is nothing wrong in that, it obviously has a business to run.

But the question is what was Microsoft doing till now? Why hasn’t it been able to convince Indian PSU banks to upgrade the remaining PCs from XP to Vista or Win 7 or Win 8 till now? Is it that Microsoft hasn’t been able to show the value of upgrading them from XP? Now, these are questions that executives at Microsoft ought to ponder over.

With Windows Vista being a dud as far as market acceptance is concerned and the jury being still out on Windows 8, what Microsoft is essentially doing is scaring the PSU banks to upgrade to at least Windows 7, which apart from being a few years old would in most cases also require a hardware upgrade. So, for the banks, it’s not just a question of software upgrade, it would also mean a hardware refresh.

So, by touting the worst case scenario as a highly likely scenario and calculating the loss of business based on that, Microsoft seems to be attempting to create a panic in the minds of the banks and thus push upgrades. Like selling life insurance, is Microsoft just scaring users to upgrade from XP to its latest operating systems or at least the next generation? At least the message and its timing from Microsoft seem to suggest so.