From the April 2007 issue of Wealth Manager Web • Subscribe!

Hasta La Vista

In developing Windows Vista over the course of five years, Microsoft Corp. may have made the "biggest investment ever put into a piece of software," as chairman and co-founder Bill Gates told attendees at the International Consumer Electronics Show in Las Vegas. But many investment advisors are taking a cautious "wait and see" approach to adopting the new personal computer operating system. Rather than craving the latest and greatest, financial managers know that stability and accuracy are paramount.

For most, there's little reason to take the risk of rushing into Vista, which debuted in late January, especially since the software's demanding hardware requirements likely necessitate procuring a whole new fleet of computers. After Microsoft has ironed out the kinks inherent in any new major software release, advisors will undoubtedly enjoy the benefits of the new operating system, which include enhanced security and workflow automation.

"My advice is hold off for now," counsels Kip Gregory, founder of The Gregory Group which helps financial services professionals leverage technology. "Like all new software releases, this one has a lot of kinks to work out. Not all programs will work with it, especially older programs, so the earliest I'm recommending people consider moving to it is six months from now. Give companies a chance to sort out and fix the bugs, and let someone else play lab rat."

It's hard, however, to get through all the hype: "This is by far the most important release of Windows ever," Gates told the Las Vegas audience, citing the millions of people who helped the company test the product. "It's also the highest quality release that we've ever done, whether it's security, or testing, or usability--all of these things we have learned a lot, driven by the feedback that those hundreds of millions of users are able to provide to us."

In fact, Microsoft turned to the National Security Agency to bolster the software's security. "Our intention is to help everyone with security," explains Tony Sager, chief of the NSA's vulnerability analysis and operations group. Both NSA and Microsoft decline to provide specific details, but the NSA does say it helped protect Vista from worms, Trojan horses and other computer attackers by testing early versions of the software.

Russ Humphries, a senior program manager on the Vista security team, told IDG News Service that three of its most significant security features are:

o User Account Control (UAC): Prior to Vista, Windows automatically gave users too much power over their systems, Microsoft says. With UAC, Windows requires a few extra steps before the user can install new programs and perform other operations. The feature makes it easier for corporate administrators to lock down desktops and prevent users--or malicious programs--from interfering with the system or installing unauthorized software.

o Windows Defender: This feature builds a defense against pop-up ads and unwanted spyware directly into the operating system.

o BitLocker: There have been more than 100 million U.S. victims of data breaches over the past two years, according to Privacy Rights Clearinghouse. BitLocker aims to prevent the next 100 million from getting hit quite so quickly by giving corporate users a way to encrypt and password-protect their data.

Indeed, experts are praising the virtues of the new operating system, although many point out that the product represents an evolutionary, rather than a revolutionary, development. "Windows Vista Business is essentially warmed-over Windows XP," says technology reviewer CNET. "If you're currently happy with Windows XP Service Pack 2, we see no compelling reason to upgrade. On the other hand, if you need a new computer right now, Windows Vista is stable enough for everyday use."

Perhaps damning with faint praise, CNET continues: "There's nothing wrong with Windows Vista. But there's no one compelling feature within Windows Vista that cries out to switch over, neither the enhanced graphic capabilities (Aero) nor the improved system performance features (truthfully, our Windows XP doesn't crash)."

The tech publication eWeek, which tested versions of Vista over the course of three years, is somewhat more complimentary, concluding that the new operating system is a "significant improvement over its predecessor, Windows XP--chiefly in terms of Vista's capacity for manageability and the tools it offers knowledge workers for juggling their data."

The eWeek review continues: "Compared with its non-Windows rivals, such as Apple's Mac OS X and Novell's SUSE Linux Enterprise Desktop 10, Vista maintains the same advantages XP did: The operating system maintains compatibility with Windows-only software, as well as good support for open-source alternatives...." Nevertheless, the publication cautions, "For enterprises running XP on their desktops and notebooks, however, a Vista upgrade is no slam-dunk."

Analysts agree that consumers will likely embrace Vista more quickly than businesses. "After a long wait, the adoption of Windows Vista will take place almost immediately among consumers, while businesses will follow a decidedly more conservative adoption curve," predicts Al Gillen, research vice president for system software at IDC, the Framingham, Mass.-based researcher.

For financial advisors, the risk of change may be greater than the immediate benefits. "We're more interested in stability than the latest technology," explains James Flynn, director of information technology at Etelligent Consulting. "With financial data, 100 percent accuracy is a must." The Kansas City portfolio management company reports on more than $16 billion of assets for firms across the country. "I talk to a lot of companies out there, and I've met very few that are actually jumping on Vista," he says.

Etelligent's computers currently run Windows XP Service Pack 2, which Flynn considers very stable. In fact, after testing Vista and researching the operating system, Flynn concludes, "There's no reason for us--or for most businesses--to rush into Vista." The firm has no plans to upgrade to Vista this year and will not even consider moving to the operating system until Microsoft releases Service Pack 1, due sometime in the second half of the year.

eWeek also recommends waiting for the release of Service Pack 1, when "software incompatibilities should be ironed out."

Another reason Etelligent is holding off on Vista for the time being is that applications the firm relies on are not ready for the operating system. Schwab Performance Technologies, for example, has asked its customers to wait until it has certified products such as Portfolio Center and Portfolio Center Relationship Management for Vista. New versions of both programs--expected to be certified for the new operating system--are due this summer.

Vista's stiff hardware requirements--particularly the need for 3-D graphics cards-- also give Etelligent's Flynn reason to pause. "Vista is so large and has such a large footprint. When we look to upgrade to Vista, we will have to upgrade our entire office. Beyond purchasing the software, we'll have to look at all the hardware. It will be a pretty good chunk of money for us." Indeed, the hardware requirements are considerable, which means most companies will have to buy new computers to take advantage of the operating system.

Whether or not your firm needs new computers may be the deciding factor. As Kip Gregory points out, "It's a business decision: A) Do you need to buy new equipment? If so, unless you have someone configure computers especially for you, they are going to come with Vista--so it's a moot point. B) If you're a small operation and everything is working okay, why give yourself the added headache of resolving a bunch of potential software conflicts you're going to create for yourself?"

Vista is already spawning a whole new crop of desktops and notebooks from Dell, Gateway, Hewlett-Packard (HP), Lenovo Group and others. In fact, it is becoming difficult to find a non-Vista Windows PC on store shelves these days. On the eve of Vista's debut, retailers such as Micro Electronics' Micro Center, offered deep discounts for Windows XP-based PCs from Acer, HP and Toshiba--in some cases $150 rebates to rid themselves of the old inventory.

"Vista offers users a graphics interface, demanding PC upgrades to provide optimal performance for its Aero glass translucent desktop windows and other features," says IDG News Service. "In an era when sinking prices for chips and memory have pushed PC makers to slash their prices, vendors are jumping at the opportunity to add advanced components to each PC and add dollars to its sticker price."

Dell, for example, recently began recommending that Vista customers upgrade their PCs from single-core to dual- or quad-core processors, from 1GB to 2GB of memory, from graphics integrated on a motherboard to a dedicated graphics card, from standard display to widescreen, and from standard to fast-spinning hard drives.

Vista has already meant a boon to retailers and manufacturers. Research house Current Analysis reports that PC unit sales for the week ending February 3--the week immediately following the Vista debut--jumped 173 percent over previous week sales and 67 percent year-over-year.

Workflow at Work

For businesses, Vista's hidden gem may be the way it facilitates the automation of workflow--that is, the operational aspect of a work procedure, how tasks are structured, who performs them, what their relative order is, how they are synchronized, and how information flows to support and track those tasks.

In the long run, what encourages financial advisors and other businesses to switch to Vista may be the Windows Workflow Foundation, a Microsoft technology for defining, executing, and managing workflows. This technology is part of Microsoft's .NET Framework 3.0 which is built into the Vista operating system.

"Workflow allows us to build applications that simulate human behavior in terms of process," explains Etelligent's Flynn. "If we discover that Vista will help us drive our business by automating things that we do, then we'll make the investment."

By the time businesses embrace Vista, however, there may well be another operating system from Microsoft on the horizon. Code-named Vienna, the next version is due in 2009.

Mary Kathleen Flynn is associate editor of The Deal's "Tech Confidential."

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