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December 21, 2008

Microsoft system builders get a reprieve on Windows XP sales

Posted by David Hunter at 12:34 PM ET.

Microsoft has announced an extension to the deadline for the small PC assemblers called system builders to be able to get Windows XP. Previously, system builder XP availability was scheduled to end on January 31, 2009, but now Microsoft has instituted "a flexible inventory program that will allow system builders to place their final orders for Windows XP licenses by Jan. 31 and take delivery through May 30:

Distributors say the best part of the new arrangement is that they won’t have to take title to the reserved XP licenses until they’re sold to an end user, which helps them avoid having to sit on inventory for several months, which is a major concern in a low-margin business.

"This is a good solution to support the customers that are standardized still on XP," said Michael Schwab, co-president of D&H Distributing, Harrisburg, Pa. "In this case, people contemplated buying in larger quantities [of XP licenses] and holding on to them. But that would have caused a bubble [from] people buying five months of supply in January."

D&H and other distributors are currently talking to their largest customers to come up with demand forecasts. This work is taking on added importance, since most Microsoft channel partners believe that Microsoft will stick to its Jan. 31, 2009, XP deadline.

"I think that deadline is fixed in stone," said Schwab.

It is all more of the continuing fallout from Windows Vista’s less than sterling reputation, a problem that Microsoft hopes to cure with the delivery of Windows 7. The new May 30th cutoff lends more credence to the rumors that Windows 7 may actually arrive in mid-2009.

Filed under Microsoft, Obsolescence, Windows 7, Windows Vista, Windows XP

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