Indian companies such as IDBI Bank Ltd, Hero Honda Ltd and Maruti Udyog Ltd (MUL) have been slow to take to Windows Vista, the latest operating system for computers from Microsoft Corp., because they are concerned about the software’s ability to run their current applications, mesh with the existing software they use, and the costs involved in upgrading to it.
Most of the ‘early adopter’ sales have been restricted to software services companies. India is the fastest-growing country for technology products, including software, in the world.
Microsoft admits customers are taking time adopting Vista. “Enterprises have to test all their applications to make sure the new version will run with the existing environment,” said Rishi Srivastava, director, Windows client business group at Microsoft India.
Companies such as MUL have corporate licensing packages from Microsoft that allow them to automatically upgrade to new products. And Vista doesn’t cost appreciably more than the previous version of the operating system.
The difference between listed rates for retail and enterprise customers is not much, but the former usually pay much less; Microsoft has an elaborate licensing system that factors in the number of users and the nature of upgrades.
For retail users, Microsoft has four versions of Vista available: Vista Home basic that sells for Rs8,000, Vista Home premium (Rs10,000), Vista Business (Rs12,000) and Vista Ultimate (Rs16,000).
Business customers, who account for more than two-thirds of software and hardware purchases in India, are taking time to get their information technology networks ‘Vista-ready’. They are carefully weighing fresh investments required to make the new operating system work better with the software applications that run their businesses, a series of interviews Mint did with chief information officers (CIOs) at Indian companies, software distributors, computer retailers and home customers disclosed.
Such hesitant enterprises include car maker MUL and motorcycle manufacturer Hero Honda. Vikas Malhotra, manager of information technology at Hero Honda, who manages around 1,400 desktops running on Windows 98 and Windows XP at the company, said there was no immediate plan for a Vista upgrade.
“We have a meeting with Microsoft this month for discussing issues of security and applications, post which any decision will be taken,” he said.
Even if Hero Honda does decide to upgrade, Malhotra plans to move just around 100 PCs to the new Vista platform.
Other CIOs such as MUL’s Rajesh Uppal are in the process of working out the math of licensing costs and return on investment for a planned Vista upgrade.
“In all, we have around 2,000 desktops, but we will be upgrading only 1,200 to Vista in the coming few months,” he said.
Enterprises are also taking more time to decide on Vista upgrade because of the costs of readying their computers, servers, databases and intranet systems for Vista. “Becoming Vista-ready also implies added costs as the (personal computer) memory needs to be upgraded from 256 megabytes to 512 to be able to run Vista,” said Diptarup Chakraborti, Mumbai-based principal analyst of researcher Gartner Inc. Upgrading a desktop with 256 megabytes of memory to the required 512 megabytes can cost up to Rs2,000.
There are several other costs involved for enterprises and users wishing to take advantage of the new graphical features. “You need a graphic card for leveraging a new functionality in Vista called ‘Aero’ that allows users to view content of different windows at the same time,” said Chakraborti. Every desktop also needs to have a minimum of 15-gigabytes free memory space to be able to run Vista effectively. A graphic card can cost around Rs1,000.
Many enterprises are still in the process of ascertaining whether their existing business software applications that tie in supply vendors to manufacturing or help serve customers better would run effectively on the new Vista platform.
“My technical team is evaluating all the features and usability of Vista and we haven’t yet reached the stage where the end-user is involved,” MUL’s Uppal said.
Enterprise tech managers in the Indian banking sector want Vista to be tested in applications that run their core banking functions before any possible migration. “We have over 5,000 desktops at the bank, with most of them running on Windows platform. For us, and any bank for that matter, it’s essential that Vista works well on the core banking application interface,” said Sanjay Sharma, CIO of Mumbai-based IDBI Bank.
Most of the computers at the bank’s branches run on hardware less than that recommended for Vista, he added. At Bank of India, V. Babu, deputy general manager of technology, said there was no immediate plan to migrate around 2,000 desktop computers that run on Windows 2003 to Vista.
The Redmond, US-based Microsoft said it has sold around 800,000 Vista licences, including upgrades from Windows XP, in India to business users since it announced the availability of the product for corporate customers here in November last year. Most of the eight lakh licences were purchased by companies with whom Microsoft has software upgrade agreements.
Many upgrades have come from leading tech vendors, such as Tata Consultancy Services Ltd, Infosys Technologies Ltd, Wipro Ltd, Satyam Computer Services Ltd, NIIT Ltd, and non-tech customers such as HDFC Bank Ltd and the local unit of South African diamonds miner De Beers. Infosys, for instance, is in the middle of a phased roll-out and has crossed 1,000 Vista installations.
T.R. Madan Mohan, director of the tech practice in the Mumbai offices of consultant Frost & Sullivan, said companies such as Infosys that have to serve the clients based in the US, are early adopters for Windows Vista because, “if your customers are already on Vista, you need (a) Vista platform to support and work with them".
Most other large potential Vista customers, said analysts, will delay widespread adoption of the new Microsoft operating system until at least till the middle of next year—about the time when they are expected to begin a new replacement cycle. Owing to added costs of upgrading memory and other hardware requirements, “the total cost of ownership for every desktop can go up by at least 12% at an enterprise”, said Chakraborti.
A Microsoft spokesman said the company expects more business users signing up for Vista when they upgrade their hardware next.
Vista sales in the home segment have fared better. Microsoft said it does not have latest estimates for Vista sales among home and small-business users, who typically buy computers from hardware companies such as Hewlett- Packard, HCL Infosystems and Lenovo, besides local assemblers. But executives in the IT industry said that about half the 1.3-1.5 million computers estimated to have been sold in the three months since 30 January are likely to have had Vista loaded on them.
Vikas Bhansali, proprietor of a retail software shop sSKY Technologies in Bangalore's bustling City Market said it was business as usual for Vista, because the operating system sells for the same price as Windows XP. sSKY sells about Rs9 lakh worth of Vista licences every month.
While most home users are impressed with features such as the ‘Aero’, some are unhappy with basic interoperability issues with widely-used applications. Deepali Joshi, a manager of celebrity contracts in Navi Mumbai who bought a new Vista-loaded laptop recently, said she was unable to connect to the Internet using her cellular wireless data card as the card did not have the software drivers required to make it work with Vista.
And though the issue was resolved after the support desk of her cellular service provider couriered a CD with necessary drivers within a day to Joshi, such delays can be frustrating.
One of the reasons for the lukewarm uptake of Vista could be the market positioning of the product, said Akhilesh Tuteja, executive director (tech advisory services) at audit firm KPMG India. This does not focus on important issues of security and storage, instead harping on its impressive graphical features and nifty user interface, he added.
“Vista has some great management tools that cut costs and provide better security than the Windows XP,” said International Data Corp.’s chief research officer John Gantz, but he added that globally too, the adoption of the software among business users was slower than in the home segment.