Microsoft Windows XP Professional Offers Billions of Dollars in Savings To Enterprise Customers Worldwide

ORLANDO, Fla., Oct. 9, 2002 — Microsoft Corp. today announced the results of recent studies1 that show how, cumulatively, enterprise customers may realize savings of billions of dollars by replacing their old Windows® 95, Windows 98 and Windows NT® 4.0 Workstation desktops with the Microsoft®
Windows XP Professional operating system. This news coincides with the one-year anniversary of Microsoft Windows XP and comes on the heels of Microsoft’s recent announcement of the availability of Windows XP Professional Service Pack 1 (SP1), which delivers additional enhancements to the desktop operating system for enterprise customers.

“As I talk with IT managers, I’m hearing that they must justify their technology investments more than ever before,”
said Steve Ballmer, CEO of Microsoft.
“With budgets tight, enterprises need to be confident of real returns before they invest in IT. Companies still on the Windows 95 or Windows 98 platforms are missing out on the incredible benefits that come with the combination of Windows XP and Office XP. Together they deliver more business value to our customers than any other solution available. And we’ll prove it!”

With the improved security and reliability technologies, better deployment and management tools, and a host of mobility and productivity-enhancing features in Windows XP Professional, the cost savings for enterprises deploying the system along with Microsoft Office XP are significant. Data from recent Microsoft business-value studies reviewed by BearingPoint Inc., formerly KPMG Consulting, demonstrate the value to the enterprise of Windows XP Professional over Windows 95 or Windows 98. For example, Windows XP Professional provided customers with an average return on investment of more than 200 percent and an annual savings of from $187 per desktop to $387 for mobile users as calculated over a three-year period.

In an October 2001 FirstTake, Gartner Dataquest estimated that by the end of 2002, 73 percent of commercial PCs will still be running Windows 95, Windows 98 or Windows NT Workstation.2 According to Microsoft internal estimates, there are more than 250 million PCs in use by businesses worldwide.

Customers Deploying, Seeing Significant Benefits

Enterprises often take from 12 to 18 months to evaluate and deploy a new operating system, and with the availability of SP1, many enterprise customers are now evaluating Microsoft Windows XP Professional and Office XP. Those enterprises that have begun their deployments are already seeing significant IT and business value.

To date, Siemens AG has migrated more than 180,000 employees, or about 40 percent of its work force, to Windows XP Professional.

“Our goals are to make better products and exceed our customers’ expectations so that they can do business with us more easily and quickly,”
said John Minnick, principal of corporate IT for Siemens.
“In evaluating Windows XP Professional, we can already see that it’s good for productivity, it’s good for business, and it’s allowing us to realize our Any4 vision of access to any resource, by anyone, anywhere, any time.”

Pella Corp. is in the process of upgrading its 2,200 desktop and laptop PCs from a mixed environment of Windows 95, Windows 98 and Windows NT to Windows XP Professional and Office XP. With 75 percent of its deployment complete, Pella anticipates an overall savings of $250,000 annually in IT support and administration.

“Simply stated, using Microsoft Windows XP helps Pella deliver our high-quality windows and doors to our customers faster and more efficiently,”
said Jim Thomas, senior business systems manager for Pella.
“Compared with our old mix of Windows 95, Windows 98 and Windows NT desktop operating systems, Windows XP is more stable and reliable and easier to maintain, which allows our work force to focus its attention on making great products and providing superior sales, installation and service.”

Moving Beyond Cost Focus to Value Focus

IT cost savings are only one measurement of the return on enterprises’ software investments. For enterprises to realize the true value of their IT investments, they also must consider the business benefits of their software. Microsoft Windows XP Professional and Office XP offer enterprises significant business value by increasing their productivity with a dependable, connected client platform that offers the best economics with its low deployment and operational costs.

The Microsoft Desktop Business Value Proposition

The business value of software can be more challenging to measure than strict IT costs. To prove the value enterprise customers will realize from deploying Microsoft Windows XP Professional and Office XP, Microsoft is launching the Microsoft Desktop Business Value Proposition, which is being discussed in detail at Gartner Symposium/ITxpo 2002. Based on a new evaluation model pioneered by Gartner Inc. called the Total Value of Opportunity (TVO)3, the Microsoft Desktop Business Value Proposition will help IT managers and business decision-makers make the right technology choices for their organizations’ bottom lines.

“If you’re running the old stuff, it’s time to take stock,”
Ballmer said.
“The value’s there, the deployment tools are there, and the savings are there for the taking. To prove this to enterprise customers, we’re putting up more than $1 million this fall.”

“The Total Value of Opportunity, or TVO, model evaluates how a technology investment will contribute to business success,”
said Michael Smith, senior research director for Gartner.
“It’s as dependent on the business performance levels and management accountabilities as it is on the technology. TVO provides a more complete view of the effects of IT-enabled business initiatives and bridges the language barrier between business executives and IT professionals to more clearly demonstrate how a technology initiative benefits their overall business objectives.”

The Microsoft Desktop Business Value Proposition will be open to qualified applicants that have more than 5,000 PCs running previous versions of Microsoft Windows (Windows 95, Windows 98 or Windows NT 4.0 Workstation) or competing products as their primary client environment, and that want to base their decision for adopting the Windows XP Professional and Office XP client platform on business metrics. The million-dollar set-aside by Microsoft will fund studies using the TVO methodology. The studies will be reviewed by Gartner to ensure accuracy and objectivity.

Each Microsoft Desktop Business Value engagement will last from one week to three weeks, depending on the complexity of the customer’s IT environment, and will include a value study based on Gartner’s new TVO methodology as well as a two-day consulting review of deployment recommendations focused on areas identified in the study. Enrollment will start immediately, and Microsoft Desktop Business Value Proposition engagements are expected to be scheduled by Nov. 1. Customers can obtain enrollment details by sending a request to bizvalue@microsoft.com .

Microsoft Office XP Further Enhances Value

The value of Windows XP Professional is further enhanced when deployed with Office XP. With a host of new productivity features and enhanced collaboration capabilities, Microsoft Office XP helps people work smarter and more efficiently. Further adding to the value of the Microsoft Office suite, Microsoft earlier today announced
“XDocs,”
code name for an XML-enabled forms application that will help organizations streamline their business processes. By adding
“XDocs”
to the Windows XP Professional and Office XP desktop, enterprise customers can realize even more business value for their technology investments.

About Gartner Symposium/ITxpo

Gartner Symposium/ITxpo is the IT industry’s largest and most strategic conference, providing business leaders with a look at the future of IT. For more than 10,000 IT professionals from the world’s leading enterprises, Gartner’s annual Symposium/ITxpo events are key components of its annual planning efforts. Attendees are responsible for more than $35 billion in IT spending for their respective companies, and rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use technology to address business challenges and improve operational efficiency. More information is available at http://www.gartner.com/symposium/ .

About Microsoft

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

1 Business value studies were conducted with more than 20 enterprise organizations during 2001 and 2002. Studies are published in three business-value white papers:
“Higher Yields: The Financial Benefits of Windows XP Professional,” “Security and Reliability: Pillars of Value for Customers of Windows XP Professional and Office XP”
and
“Windows XP Professional and Office XP: Realizing Financial Value Through Lower Deployment and Operational Costs.”
Studies were performed by BearingPoint, Inc. (formerly KPMG Consulting), NerveWire Inc., Immedient Corp. and Microsoft Consulting Services. All three white papers were reviewed by BearingPoint, Inc. for accuracy.

2 Source: Gartner Note Number FT-14-7378:
“Windows XP Won’t Rescue PC Sales,”
Oct. 25, 2001, by Michael Silver and Charles Smulders.

3 Output from the Gartner Total Value of Opportunity models may differ from Gartner’s published research position.

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