Windows XP not dead yet, says system builder

Seattle shop says it can sell stand-alone copies of XP until 2009

Contrary to news reports, Windows XP isn't dead, a Seattle-based systems builder said today.

"Lots of people think that they won't be able to buy XP at all after today," said Jon Bach, the CEO of Puget Custom Computers, a 25-employee system seller. "Some are stockpiling it. 'I better buy it now,' they're saying."

What Bach called misconceptions about Windows XP and the June 30 deadline start with that, but they don't end there. "Yes, it's going to be more difficult to get a new PC with XP after today," he said. "But by no means will it be impossible."

Although Microsoft will halt shipments of Windows XP to retailers and stop selling licenses directly to large computer manufacturers after today, the software vendor will let companies like Puget continue to acquire XP and install it on PCs through the end of January 2009.

Puget and other system builders will be able to obtain Windows XP Home, XP Professional and XP Media Center from Microsoft's authorized distributors -- one of the largest in the U.S. is Ingram Micro Inc. -- for at least the next seven months.

That seven months, and to a greater degree, the term "OEM," are what have confused potential customers about the availability of Windows XP. "The confusion is over the word 'OEM,' and what that means," said Bach. Microsoft would be able to clear it up, contended Bach, "with one or two words."

OEM, which stands for original equipment manufacturer, has multiple meanings when it comes to Windows XP. Microsoft uses the term to describe the big-name computer makers -- the likes of Hewlett-Packard Co., Dell Inc., Lenovo Group Ltd. and so on -- who have largely shut down sales of PCs equipped with XP.

But OEM is also part of the label used for a special kind of Windows license, one that is sold to system builders and individuals alike. An OEM license for Windows XP Home, for example, costs less than either the regular full version or even the upgrade edition; the lower price reflects the more restrictive licensing terms that go with an OEM copy, which cannot be transferred from one computer to another, and shifts the burden of support from Microsoft to the system builder or individual.

Trouble is, OEM copies of Windows XP are not only sold direct to system builders by Microsoft's software distributors, but also to the public via regular retail channels, including online.

Bach said that, the end of Windows XP retail sales notwithstanding, his company would continue to sell individual OEM licenses of XP at its walk-in retail store. "We'll be selling OEM copies that end users can buy through January 31. We've talked with our distributors, and we expect to have XP available until then."

Previously, Microsoft had said it would stop offering all boxed copies of XP, including those sold under OEM licenses, after June 30. Microsoft did not respond to a repeat query today to confirm Puget's claim that system builders and others would be able to obtain new stocks of XP between now and early next year., one of the online retailers that Computerworld has been tracking for a series of FAQs on Windows XP, said today that it would only sell what copies of Windows XP OEM it had on hand. "That item will be available until our stock runs out," a Newegg sales representative said in an online chat Monday when asked about future availability of XP OEM.

Puget's XP sales jumped from one or two stand-alone OEM licenses a week to five or six each day as the June 30 deadline approached. "Microsoft's done a big favor for systems integrators like us," Bach said, referring to the extra seven months of XP availability. "[But] it's also a way they can accomplish what they want to accomplish, which is to get the majority of the market to Vista [while] limiting the Vista backlash by letting systems integrators continue to sell XP."

The number of XP-equipped computers have stayed "fairly stable" at around 30% of the systems Puget sells, Bach said, although there have been ups and downs. At Vista's launch in early 2007, for instance, XP sales dropped; they picked up, however, as some users were disappointed in the newer operating system. The debut of Vista Service Pack 1 (SP1) in February again spurred Vista sales.

"There's a lot that can happen in the next seven months," Bach said, predicting that Microsoft will revisit its XP availability rules before then. "They've already extended availability of XP Home to small laptops," he added, talking about the April decision to let makers of inexpensive notebooks like the Asus Eee 900 continue to factory-install XP Home until June 30, 2010.

"A lot will depend on perceptions about Vista [in the next seven months] as well as Windows 7 and its availability," Bach said.

Copyright © 2008 IDG Communications, Inc.

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