A Windows 7-Led Recovery

Earlier this week, Microsoft’s CFO, Peter Klein, reported during an industry analyst meeting that Windows 7 was the fastest-growing operating system in the company’s history. In other reports from Microsoft, Windows 7 has already sold 90 million copies, and may exceed 100 million in the next couple of weeks. No matter how you slice it, this is good news.

It is, of course, good news for Microsoft, which needed it after the recession that kept buyers in the basement tweaking their old copies of CP/M. And the computer industry needed this because in many cases the new Windows 7 sales also mean new computer sales. But perhaps what was more important is that customers needed this because it validates the decision to move to the new operating system and away from the elderly (to put a kind spin on it) Windows XP.

The fact that companies are willing to move away from those copies of XP that they paid for back in the Bronze Age shows two things. First, they’re beginning to realize that efficiency and stability are worth paying for. Second, it’s showing that security is worth paying for. Windows 7, in whatever form, is dramatically more secure than Windows XP could ever be. Companies need that.

Of course, this brings up the question of the sudden interest in security. After all, many companies wouldn’t spend a nickel on security if they thought they could get away with that. As it is, security spending is usually categorized with other unnecessary expenses that CFOs hate, like pay raises, health insurance and office chairs.

Fortunately for the software industry, the U.S. government decided that security does matter, and found a way to link a trendy new wardrobe of orange jumpsuits with violation of securities rules. Even better, industry groups that control the acceptance of credit cards have demanded similar security provisions, but instead of just sending the CEO to prison, they have the commercial equivalent of nuclear weapons – they’ll take away a company’s ability to accept credit cards.

But there’s really more to it than that. Those ancient Windows XP machines are on their last legs. Even the ones that will run Windows 7 aren’t always worth upgrading. And while it’s possible to buy a Windows 7-capable machine and downgrade it to XP, one has to wonder what the point is.

So what’s really going on here? I think a combination of a weak economy and the lack of a compelling reason to spend money on a computing infrastructure that was already working was a major factor. As you’ll recall, Windows Vista appeared on the scene about the same time that the economy was starting to tank. Given a choice to spend money on an OS that was getting bad press, required expensive hardware upgrades, and wasn’t always easy to use, versus staying the course and spending nothing, companies took the easy choice and didn’t spend money.

Now things have changed. Windows 7 is a lot better than Vista, but coupled with that, the economy is also a lot better than it was a few years ago. Sure, the recovery is uneven, but the strong sales of Windows 7 and the accompanying sales of new computers might well be an early indicator that the turnaround has started.