In January, when software giant Microsoft released Vista, the latest iteration of its Windows operating system, the company said it was "the most significant product launch" in its history. But nearly a year later, technology observers say the response to Vista, which touts increased security and a more streamlined user interface, has been lukewarm at best.

"Companies are definitely taking their time migrating to Vista, especially among small and medium-sized businesses," says Jim Obsitnik, vice president of marketing at Everdream Corp., an IT services firm in Fremont, Calif. "What Microsoft has done is interesting, but it's not as drastic a change as moving from Windows 2000 to Windows XP, for example. I think Microsoft is struggling a little bit in demonstrating the value proposition of doing a migration at this point."

A Microsoft spokesman acknowledges that XP has been a tough act to follow. "Windows XP is a very successful product and has been the fastest-selling version of Windows to date. However, over the last few years of Windows Vista development, we've listened to customers and have designed the features in [it] to meet our customers' changing needs," the spokesman says. "With Windows Vista, we aim to give customers confidence in the PC again and the things they can do with it."

Part of the problem may be getting Vista onto existing machines. Microsoft recommends 1 gigabyte of RAM and 1 gigahertz of processing power to run the system. In a recent analysis of 145,000 desktops used by its clients, Everdream found nearly 80% of deployed PCs failed to meet those requirements, and that 90% of companies had at least one computer that didn't stack up. That means upgrading could cost more than $1,000 per seat.

Another sticking point has been the relative scarcity of software that can run on Vista. IT experts say most programs can be modified to run on Vista with a simple patch, and Microsoft has tried to ease the process with the release of its Application Compatibility Toolkit 5.0. "Even smaller IT teams should be able to evaluate their programs to determine which ones will work well with Vista and which ones will need fixes," says Rajeev Shrivastava, senior director of product marketing at Support Soft, an IT services firm that runs the Web site. In the LBM industry, software makers Activant, Progressive Solutions, and Spruce Computer Systems say their software runs on Vista.

Many companies also have been waiting for Microsoft to release its first service pack for Vista, which is expected in the first quarter of 2008. "In all likelihood, you will see adoption pick up once the first service pack comes out," Obsitnik says.

But widespread adoption of Vista could be years away. "You're looking at 2009 or 2010 before Vista becomes the de facto standard and XP is phased out," says Josh Kaplan, marketing director at RescueCom, a nationally franchised IT solutions firm. For LBM dealers, this means that running Windows XP–or in some cases, Windows 2000–probably will suffice for now. But as with any new Microsoft operating system, upgrades are inevitable, especially as older machines are replaced with new, pre-installed Vista PCs.

Incidentally, observers say that's the usual–and most cost-effective–route for small and midsize enterprises to do an operating system upgrade. Just be aware that networking Vista and Windows 2000 machines is challenging. The upside is that as the security of business information becomes an increasing concern, Vista should provide enhancements to protect your shop, even if you think LBM dealers are unlikely targets of hacker attacks. That's because many hackers are looking for machines they can turn into "zombies," or PCs they can hack into and then use to send mass spam e-mails or host illicit or graphic Web sites.

With its User Account Control feature, Vista lets businesses set the level of access that each individual worker has to the underlying system. So, if a hacker gets into an outside sales rep's machine when he logs on at a coffee shop, the miscreant shouldn't be able to wreak havoc on your entire business.

"In business today, we are all part of the same Internet, so the more that we can do to protect ourselves, the better," says Sean Stecker, director of services at Tempe, Ariz.-based IT firm Ensynch. "Vista helps do that."

–Joe Bousquin is a contributing editor for ProSales.