Microsoft’s Financial Troubles Least of Our Concerns, IT Managers Say

After announcing layoffs and poor earnings for Q2 2009 last week, Microsoft has to worry more about how it is perceived by Wall Street, competitors, shareholders and the press. But what about the people in the trenches? What do IT managers think about Microsoft’s economic woes?

While the media and Wall Street may be painting a “sky is falling” picture for Microsoft, IT managers interviewed for this story are mostly taking last week’s news in stride, chalking it up to another company making necessary cuts in a bad economy.

Many IT pros are still wary about upgrading to Vista and Windows 7 and some are considering switching to cheaper OS alternatives such as Linux, but Microsoft’s financial setbacks are not the reason.

Stephen Laughlin, Director of IT at the Academy of Television Arts & Sciences, says his confidence in Microsoft has not been swayed by the recent round of layoffs.

Yet Laughlin, who runs an XP shop and is dubious about Vista, is still critical of Microsoft, saying that regardless of its low quarterly revenues the software giant needs to listen to customers more than it has in the past.

About Windows Vista, he says: “Microsoft did not speak to IT managers and users about what they wanted and what they needed. It seems to have its own ideas of how to move forward with its products instead of seeking what its customers want.”

Another IT manager, Monte Hale, IT Director at architecture firm Forma Design, has elected to skip an upgrade from XP to Windows Vista and wait for Windows 7, though he won’t be an early adopter and will move as part of a hardware upgrade cycle.

As for Microsoft’s financial situation, Hale says the current layoffs do not affect his decision-making.

“Which is a better sign? The company that makes cuts now to stay stronger or the company that does nothing now and waits?” Hale says. “As for now, we are not concerned with the stability of Microsoft and will continue to use and invest in Microsoft products.”

John Halamka, CIO of Beth Israel Deaconess and Harvard Medical School, says he will continue to run Windows XP, as well as SQL Server 2005 and Exchange 2007, until all the machines for his user base of doctors and nurses have retired. Halamka says that due to the PC hardware lifecycle in health care, he is four or five years away from being able to run new versions of Windows on all desktops and is still deciding whether to upgrade to Windows 7 when the time comes.

“If it requires the same hardware resources as Vista, we’ll delay adoption,” he says.

Halamka says he’s critical of Microsoft’s pricing and its tendency to force people to do upgrades that require more resources than their hardware can stand. But he adds: “All of my observations have nothing to do with Microsoft’s financial viability.”

Halamka is in the midst of switching his users from Microsoft Office to free, open-source alternative Star Office as a cost-cutting measure. Regarding the future of Windows, he says that desktop operating systems will start to matter less and less. “A reliable, low-cost OS that runs a browser will provide most of the functionality that users need,” he says. “In the future, it’s likely [Mac] OS X and Ubuntu use will grow while Microsoft operating systems will shrink.”

And this, Halamka believes, has nothing to do with Microsoft laying people off.

“Microsoft will lose market share to others not because of fear they are weakening financially, but because their products are more costly than alternatives, because customers are forced to do upgrades that require more resources than their hardware has available, and because customers are concerned by security vulnerabilities in Microsoft’s products.”