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As Windows XP reaches end of its lifecycle, businesses face big IT decisions

August 5, 2013


WASHINGTON, D.C. — Fire up a desktop computer at many small or medium-size businesses across the United States and there’s a decent chance it’s running on a 12-year-old operating system — Windows XP.

But in April, Microsoft will no longer offer the security updates for that venerable software that would protect it from newly emerging viruses, spyware and other malware.

“When XP goes out of support, it’ll be a lot like driving a car that you can’t buy parts for anymore,” said Jay Paulus, Microsoft’s director of Windows small-business marketing.

Microsoft estimates that 30 percent of its small to midsize customers are still using XP. So the end of the product’s life cycle has created a countdown of sorts for many businesses to make big decisions about how to update their information-technology infrastructure.

This is creating a boomlet in business for companies such as Washington, D.C.-based New Signature, a consultancy that helps clients plan, deploy and support Microsoft products.

“That tidal wave of activity is something that we’ve really been planning on and hiring around,” said Christopher Hertz, New Signature’s founder and chief executive.

In fact, Hertz hopes to hire about 30 people by the end of 2013, a move that would bring his workforce to 100 people.

New Signature’s role often starts with a bit of persuasion, since Hertz says many organizations believe that avoiding operating-system updates and other technology upgrades will save them money. New Signature aims to show them why that might not be true.

“In soft costs of productivity, they’ve really been spending tens of thousands annually on the maintenance,” Hertz said.

In recent years, Microsoft has also changed the way it charges for some of its business products. Instead of buying a license, the software can be purchased via subscription, with customers paying as they go for a flexible number of licenses.

Because of this change, “It’s no longer a capital cost; it can be an operating cost,” Hertz said.

Rob Enderle, principal analyst for the Enderle Group, said small businesses have found this to be an attractive option, a set-up he said mimics paying for a cable bill.

But Al Gillen, an analyst at market research firm IDC, said some companies aren’t convinced that this arrangement suits them, particularly if they plan to use the software for a long time.

“The pricing model is going to have to moderate somewhat so that the [cost] of using the subscription is not higher than acquiring the product,” Gillen said.

Microsoft’s Paulus said medium-size firms in particular are far behind on upgrades. He suspects this is because they are large enough for such a transition to be complex and yet small enough that they don’t have staff dedicated to this kind of decision-making.

In surveying enterprise customers with five to 250 employees, Microsoft found that only 55 percent of them knew about the forthcoming end of support for XP. And of that group, Paulus said almost 70 percent didn’t know what the change will entail.

“Many of them thought it meant we were going to stop selling Windows XP,” Paulus said.

Microsoft is counting on business partners such as New Signature to help spread the message, and it has also placed Web banner and search-engine advertisements.

“It’s basically just trying to get the word out there,” Paulus said.

Microsoft faces other challenges as it tries to get businesses to make the switch.

“A forced migration gets companies to kind of rethink whether or not they want PCs altogether,” Enderle said.

That could mean switching to a competitor’s desktop offerings, or doing more business on tablets and smartphones, gadgets on which Google and Apple’s operating systems dominate.

The Center for American Progress, a Washington-based think tank, was recently assisted by New Signature in a transition from Windows XP to Windows 8.

George Estrada, the organization’s vice president of technology, said one of the biggest benefits of the switch has been the ability to use an upgraded e-mail system. As XP users, the group was not able to use Office 365, Microsoft’s most up-to-date version of its suite of word processing, spreadsheet and other products.

Besides, Microsoft says Windows 8 is far less likely than Windows XP to be infected by malware.

“Eighty percent of our business is done on email throughout the day,” Estrada said. “It’s just not a system that you need to have so vulnerable.”

The think tank said it has already realized cost savings since making the switch.

“We would have six- to eight-hour interruptions every quarter, at least. When we had an interruption, that was literally seven to eight people working on that,” Estrada said.

With the new set-up, service interruptions have been greatly reduced. And now, Estrada said, just one staff member is needed to work with New Signature or Microsoft on finding a solution.

© 2013, The Washington Post

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