A new hope for Microsoft: City of San Jose likes Windows 8.1

Microsoft chief exectuive Steve Ballmer announces changes to Windows 8 at the company's recent developers conference.
(Damian Dovarganes / AP)

Microsoft scored a nice little victory this week when the city of San Jose announced it had selected Office 365 over Google Apps. The contract is not huge, only about $2 million, but still, a win is a win.

Perhaps the better news for Microsoft, though, emerged in a conversation with Vijay Sammeta, San Jose’s chief information officer. He was talking about the fact that the cloud-based Office 365 is a much-needed upgrade that will replace the current Office 2003 versions the city is using.

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He noted that most of the city is also still running on Windows XP, which Microsoft will stop supporting next year. Like a lot of CIOs, Sammeta wasn’t sold on the version of Windows 8 unveiled last year, which was optimized for mobile and touchscreen computers.

But now that Microsoft has announced plans for version 8.1 that include the ability to boot to the traditional desktop, Sammeta is much more bullish about making the switch in the coming year.

“I think 8.1 will provide a good transition from XP,” he said.

They city didn’t make a commitment to 8.1 as part of the most recent deal. But Sammeta said the city is looking to switch to a new operating system within the next year. Windows 8.1 is scheduled to be released later this year.

It wasn’t that Sammeta didn’t like the new tile-based interface of Windows 8. But it presented two problems in terms of rolling it out to city employees.

The first is that it would involve significant training, on top of the training that will need to be done with the transition to the new Office 365 and the cloud services the city will implement.

The second is that the city felt Windows 8 with its tile interface wasn’t going to work well with the older PCs it currently has installed. And if they needed to buy new PCs with touchscreens, costing at least $500 each, the expense would be prohibitive.


Of course, the city does want to replace many of those PCs. The new Windows 8.1, Sammeta said, will let them do that over time, while gradually easing employees into the new tile-based look down the road.

“We have a lot of older equipment,” Sammeta said. “We’re trying to maximize the investment we already have out in the field.”

Microsoft is scheduled to report earnings Thursday. In midday trading, Microsoft’s stock was up 0.57% or $.21 to $36.38, close to a six-year high.


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