April 28, 2009

With a feature called Windows XP Mode, Microsoft (NSDQ: MSFT) will be using virtualization to let Windows 7 customers run applications designed for older versions of Windows without having to worry about incompatibility, the company said late Friday.

Software incompatibility caused many headaches upon the release of Windows Vista, contributing to Vista's poor initial reception and pushing back deployment for a large majority of companies, many of which have continued downgrading newly delivered PCs to Windows XP. Windows XP Mode is clearly aimed at ameliorating those concerns vis-à-vis Windows 7.

Earlier this month, Dimensional Research released the results of a survey of more than 1,100 IT professionals. It found that 83% of companies intend to wait more than a year to upgrade to Windows 7 after it's released, while 41% intend to wait longer than two years

Windows XP Mode could help hasten adoption if it can help convince companies that they needn't worry about software incompatibilities. Microsoft's client division revenue was down 16% in the third quarter this year, so Windows needs any kick it can get.

Windows XP Mode suggests that Microsoft may use similar features going forward to let it make more significant changes to Windows from one version to the next, using virtualization technology to ensure backward compatibility.

Windows XP Mode will come as a free add-on for customers with Windows 7 Professional and Windows 7 Ultimate. It's unclear whether the feature also will be available for customers who purchase Windows 7 Enterprise, but that seems likely.