Companies Face Millions In Windows 7 Migration Costs

Competition for IT staff with desktop migration skills could drive the cost for upgrading existing machines to Windows 7 to £1200 per PC, according to analyst Gartner

A company with 10,000 PCs could face a bill of £13,310,000 for simply upgrading existing XP machines to Windows 7, according to a new report from Gartner released this week. The analyst estimates that actually buying new hardware with Windows 7 pre-installed is a cheaper option than installing the OS on existing hardware because of the need to upgrade the hardware and the increased admin time.

The report, “Prepare for Your Windows 7 Migration Crunch“, warns IT departments about the relatively short-time frame until the end of support for XP. Migrating to Windows 7 will be an expensive process, even for those companies which choose to upgrade existing hardware rather than buy in new kit.

New Kit Cheaper Than Upgrading Old

In fact, the report warns that the time-frame for support of XP means that the normal upgrade through attrition strategy – where companies replace PCs running the previous OS as they wear out with ones running the latest version – is not workable in the case of Windows 2000 and XP.

“Corporate IT departments typically prefer to migrate PC operating systems via hardware attrition, which means bringing in the new OS as they replace hardware through a normal refresh cycle,” said Charles Smulders, managing vice president at Gartner. “Microsoft will support Windows XP for four more years. With most migrations not starting until the fourth quarter of 2010 at the earliest, and PC hardware replacement cycles typically running at four to five years, most organisations will not be able to migrate to Windows 7 through usual planned hardware refresh before support for Windows XP ends.”

According to the analyst, the lack of time for an attrition upgrade process means that companies will have to look at three potential alternatives: Wholesale replacement of Windows XP machines for new Windows 7 PCs, upgrading the hardware of existing Windows XP machines to run Windows 7 or explore hosted-virtual desktops in a partial migration process.

Of these various approaches, upgrading existing PCs is the most expensive option, ranging from $1,274 to $2,069, compared to between $1,205 and $1,999 for simply buying hardware with the OS installed already. However, while the new hardware option may be more cost effective, it comes with higher up-front capital costs – a potential problem as companies continue to struggle with the fall-out from the financial crisis.

Gartner also warns that installing Windows 7 on existing PCs could also be seen as simply delaying the problem.  “While the capital costs are reduced in this case, upgrading an installed PC simply postpones the inevitable replacement for two to three years. Users will need to be migrated twice, rather than once, during a four-year period,” the analyst states.

Windows 7 The Only Choice?

Overall, Gartner believes that the move to Windows 7 will have a significant impact on IT budgets, whichever strategy companies choose to adopt.

“Whether replacing or upgrading PCs, it is clear that Windows 7 migration will have a noticeable impact on organisations’ IT budgets,” said Steve Kleynhans, research vice president at Gartner. “Based on an accelerated upgrade, we expect that the proportion of the budget spent on PCs will need to increase between 20 percent as a best-case scenario and 60 percent at worst in 2011 and 2012. Assuming that PCs account for 15 percent of a typical IT budget, this means that this percentage will increase to 18 percent (best case) and 24 percent (worst case), which could have a profound effect on IT spending and on funding for associated projects during both those years.”

However, while the migration process might be troubling for senior IT management, it could prove a boon to tech staff skilled in such migrations. “Gartner expects the cost of IT labour to increase during 2011 and 2012 as demand for Windows 7 migration services spikes. These cost hikes are likely to continue in 2013, as organisations recognise that they are behind in their migrations.”

But while the Gartner report is based on the idea that companies running Windows XP will automatically opt to move to Windows 7, rivals such as Apple are continuing to make in-roads into the corporate desktop market and alternative Linux platforms continue to mature. The analyst also does not comment on the sustainability issues of the machines, which will need to be retired as a result of the migration process.