Windows 7 XP upgrade – a headache for 90% of mid-sized businesses?

According to Microsoft only 10% of mid-sized businesses run Vista, so how will SMBs cope with the XP upgrade path to Windows 7 following its launch next week.

16th October 2009 at 3:20 pm

Microsoft’s Windows 7 officially launches on 22 October, but the undoubted appeal of the new operating system for the SMB (small to mid-sized business) market looks set to be tempered by potential upgrade issues.

Windows 7 XP upgrade an issue for 90% of SMEs?According to Microsoft in the UK the vast majority of mid-market businesses are still running XP having skipped Vista due to real and perceived compatibility problems.

In a frank interview with Robert Epstein, head of small business marketing and sales at Microsoft in the UK, earlier this week, he told me:

As you start to look at 20 people companies and above where people are more interested in compatibility with their ERP and accounting packages, then there have been a large number who down-graded from Vista back to XP. So we think the actual install base is only 10% running Vista today.

So what’s the problem? Well the upgrade path from XP to Windows 7 isn’t straight-forward. Most would recommend a clean install of Windows 7 on an XP system, rather than an upgrade.

Indeed Microsoft’s own advice says ‘we don’t recommend’ upgrading from XP to Windows 7 and suggests the best option is to buy new hardware.

That’s one way to avoid compatability issues. No wonder Michael Dell is so keen on the new operating system!

As it happens I also think it’s a great operating system as I said in my Windows 7 review earlier this year.

But for businesses of 20-250 users the ‘clean install or buy new hardware choice’ may well cause pause for thought.

Of course Windows 7 includes the extremely useful XP mode which means businesses won’t have to buy new software to replace specialist applications that only work on older machines.

That’s good news in an economic climate where small businesses don’t want to be forking out for expensive software upgrades. But are they ready to upgrade their hardware instead?

Perhaps a refresh of hardware in SMBs is long overdue. Whether now is the time to make those purchasing decisions is another matter.

So it remains to be seen how swiftly XP-loving, mid-market businesses embrace Windows 7. Its penetration into this market may turn out to be slower than Microsoft would undoubtedly like.


Alex is the founder and editor of SmallBizPod, the UK's first podcast dedicated to small business, start-ups and entrepreneurship. Alex writes about topical small business issues, entrepreneurs and anything else that catches his eye here on the small business blog.

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  1. Martyn says:

    But for businesses of 20-250 users the ‘clean install or buy new hardware choice’ may well cause pause for thought.

    And maybe they’ll think – ‘why pay the M$ tax when I can get Linux for free and use my old hardware’

    Like what we did 😀


  2. I had a sixth sense you might make this point!

    Here’s a question though. How old are your PCs and how much longer do you think they’ll last?

  3. Guy Gregory says:

    In our experience, it’s less common for SMEs to upgrade the OS en-masse, instead they’re more likely to gradually phase-out old versions when they purchase new hardware.

    In individual cases, it’s very straightforward for end users to use Windows Easy Transfer to move files and settings from XP to 7. We have a number clients who have successfully been through this process when trialling a XP to Windows 7 migration.

    For larger deployments, USMT (User State Migration Tool) would be the obvious choice for moving from XP to 7.

    Even though both methods involve some planning and a bit of background reading, there’s still a way to upgrade to Windows 7 on existing hardware whether it’s a one-off or large deployment.

  4. Martyn says:


    I had a sixth sense you might make this point!

    Oh no – I must be terrible bore 😀

    Most client PCs are circa 2004/2005 and we have servers going back to '03 (although we upgraded the main boxes in July this year). We also have some 2006/7 cheap laptops and two eeePCs. We do, however, have newer flat screen monitors bought last year.

    Generally its the HDs that go first so these get ripped out and the units converted to thin clients. I guess we can keep most of them going for a while yet. As they fail we'll replace with bog-standard operating system free kit or thin clients.

  5. Thanks Guy, valuable input. I’ve included a link here to the Windows Easy Transfer tool for reference.

  6. @Martyn sounds like a good strategy to me and one I’m sure I’d adopt if I had a team of people to kit out.

    @Guy thanks for the info re USMT for those thinking of upgrading multi-seat operations. Here’s the link:

  7. Paula Jones says:

    As a trainer, I have to run various operating systems (and use virtual machines to do so), and I have had the RTM version of Windows 7 for some time now.

    I have a cheap laptop that was running Vista and just couldn’t cope with it; having installed Win 7 over the top of it, it runs like a dream. It’s reminiscent of XP (ie, it works), its memory management is efficient, and I think any companies that have been running Vista and move to Win 7 will be breathing sighs of relief.

    For the record, I’m a Microsoft Certified Trainer, but I don’t *have* to like Windows 7…I just choose to; and I also run Ubuntu and have a Mac; Win 7 is comparable in efficiency to these I think.

  8. BSLO says:

    Thanks for the in-depth review!

    I got my first look at Windows 7 this week and my initial reaction was “so far, so good.”

    “So far” being the key phrase of that statement.

    New operating systems are almost always an improvement, and will almost always generate some sort of enthusiasm or buzz within the first couple months.

    But until the user sits down and gets a feel for what a new OS is all about (outside the VirtualBox), you’re not going to understand the product’s deficiencies … or its notable improvements.

    The reality being you need at least 4-6 months under your belt before you can conclude how successful an OS is for you. And that’s the bottom line, how successful is this system to you and your work environment?

    Here are my Top 7 reasons why Windows 7 could be a success … and seven reasons it could be a failure:

    Thanks again for the great review!

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