Anilrgowda

After delay after delay, you wouldn’t think that it could get much worse for Microsoft’s Vista team, but as it turns out, consumers will face an additional hidden cost if they want to upgrade to Microsoft’s latest and greatest operating system. According to iSuppli, it will cost OEMs 20% more in hardware costs to build a Vista machine compared to an XP set up. Because this represents the cost to the OEM and not the end customer, it means that for consumers, you better be ready to plop down serious cash to upgrade your entire system, if you want to upgrade to the operating system that we’ve affectionally called Longhorn all these years.
While I suspect that Microsoft has known about this for quite some time, my guess is that deep down inside, they were hoping to keep this hidden tax a secret. Vista is a crucial component to Microsoft’s growth plans and while they can afford to stumble when it comes to Zune, a misstep in their operating monopoly could be devastating.
Already Apple has been gaining in market share and while Microsoft still dominates the world when it comes to PC operating systems, there are many questions as to whether or not their monopoly is also at risk from web players like Google and Salesforce.com.
To add flame to this fire, investors in Microsoft have bet heavily on Vista’s success and over the last three months, Microsoft has seen their stock price finally move past $25 a share and is currently flirting with $30 a share. With investors now paying nearly 20% more for the stock, you can expect that their enthusiasm will be short lived if they find that these higher costs dissuade corporations and individuals from upgrading to the new operating system.
With consumers facing at least an additional 20% uprgrade cost on their hardware, it may make many consumers think twice before taking the plunge into the Vista experience. Already there are many businesses that are taking a wait and see approach when it comes to the new system. Dealing with bugs and irregularities when you are an early adopter is one thing, but when it comes to running a business, owners are understandably reluctant to deal with the headaches that come from with being the first one on the block to try out new technology.
With Vista having just recently launched for the business community, it is difficult to gauge the success that it’s having in the marketplace so far, but with these higher hardware costs, it very well could dampen the enthusiasm that businesses will have when they are considering whether or not it’s time to upgrade to Microsofts latest operating system.