19 December 2008 QUESTIONS AND ANSWERS Consolidating and cost-cutting Duncan McLeod talks to Microsoft International president Jean-Philippe Courtois about how the economic rout is affecting spending on IT

How is the economic downturn affecting Microsoft? At the end of Q1 in September we were in line with the guidance we provided. But we have shaved US$500m off our operating expenses. How is this downturn different from that of 2000 and 2001? The bubble burst then because there was too much hype and an oversupply of technologies. The IT industry didn't do a good job of explaining what could be done with that technology. This time it's linked to financial services. The smallest companies now don't have access to cash. It's hard for them. Many of Microsoft's partners are small companies like this. How is the company supporting its sales channel? We have announced specific measures for distributors in which we offer extended payment terms. In SA, payment terms have been extended from 30 days to 60 days until June next year. How can companies save money on their IT systems? Do more with less with your servers. This is the promise of virtualisation technology. [Editor's note: virtualisation allows companies to make more efficient use of their hardware resources and to consolidate the number of servers and other systems they run, thereby saving them money.] Many companies use 10% of their server capacity. They can consolidate those servers at a ratio of eight to one. Companies are also using technology to save energy. You can set a time when you want to automatically shut down all of the PCs in your company. Surely server consolidation is bad for Microsoft because the company will sell fewer server software licences? It allows us to enter discussions about managing customers' whole systems [and sell them additional software, such as system management tools]. Should companies running Windows XP wait for Windows 7, due out next year, or should they install Vista now? For many years to come, Vista will be the best Windows operating system that companies can deploy. So customers should deploy Vista.