Is Vista the End of Windows?

At the end of 2006, Gartner Group predicted that Vista would be the last major release of Windows, with future updates being delivered on the fly, in modular format. “The era of monolithic deployments of software releases is nearing an end,” Gartner said. “Microsoft will be a visible player in this movement and the result will be more flexible updates to Windows and a new focus on quality overall.”
The annual predictions from the major analysis companies are like hors d’oeuvres at a drunken New Year’s party — quickly consumed, and generally forgotten the next day. Their role is to generate publicity (that’s why they are given away for free). But this prediction is worth thinking about because if true, it would have a profound impact on the computing industry.
Windows as a money-making machine
The Windows refresh cycle is a critically important financial engine for hardware and software companies. On the plus side, it gives users a reason to replace or upgrade their PC hardware and applications. On the down side, it always breaks the compatibility of some existing applications, creating support headaches. Microsoft also inevitably copies the features of some third party applications into Windows when it does an upgrade, creating huge financial problems for the companies targeted.
Without that cycle of upgrades, some companies would rest more easily, but we think it’s likely that overall economic activity for most PC-related companies would slow down. People would keep their PCs and applications longer, and so annual revenue would drop.
The PC industry doesn’t want this, and neither does Microsoft. The Windows upgrade cycles have been a huge revenue generator for Microsoft, which is trying to find ways to increase revenues, not decrease them. So no matter what the changes in technology, we think Microsoft will try very hard to continue to find ways to make Windows obsolete every few years. If anything, Microsoft will feel motivated to upgrade Windows more frequently.
Separate the strategies
Gartner’s prediction is that Windows improvements will be delivered incrementally, in modular format. We think it’s very possible that in its engineering work Microsoft will try to make Windows more modular–that’s a no-brainer. But we think the development strategy should be separated from the marketing one. In marketing terms, the most effective way for Microsoft to extract revenue from users would be to offer subscription services for incremental add-ons (that’s what Windows Live looks to be), and also periodic massive Windows upgrades that require people to repurchase both Windows and Office.
So don’t worry, we think there will be other major upgrades to Windows in the future. If nothing else, Microsoft still has to deliver all the features it dropped from Vista in order to get it out the door.