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Small Businesses Hit With $3 Billion In New Outlays By XP Support Removal

More than $3 billion dollars will be sucked out of small and medium sized businesses (SMB) as a result of Microsoft’s decision to end support for XP-based systems.

This decision will leave companies who do not migrate to other systems to be more vulnerable to hackers and other ills.

For most small businesses the motto is usually: “If it isn’t broken, don’t fix it.”

But in the case of the XP end-of-life (EOL) means companies will need to invest either in new software and/or upgraded equipment.

Here is how one migration was effected:

These major changes will occur on April 8, 2014 are on top of a long recessionary period are not good news for SMBs.

While Microsoft officials may argue the potential investment needed will be offset by productivity gains, the impact on many small businesses is significant.

The estimates on the outlay costs come from Dr. Kenneth E. Lehrer, nationally known economist. He based his analysis on the estimated 4.3 million small businesses currently running XP as their work stations. Assuming an average outlay of $600 for software and/or new equipment for each current computer station, this generated an estimated $3 billion in additional costs.

The impact will be particularly hard on the smallest enterprises.

A recent survey of 1034 small businesses under 50 employees by this newsletter’s parent, Information Strategies, indicated 78% ran their operations on XP platforms.

Of those queried, only 57% were highly aware of the impending loss of support from Microsoft.

As of mid-January, only 41% had plans or already implemented solutions. The 11% of those who already acted moved to Apple products, primarily tablets.

But as the date for ending support grows close, many smaller companies have not acted.

Jay Paulus, Director of SMB
Marketing for Microsoft

According to Jay Paulus, Director of SMB Marketing for Microsoft, “the company has spent millions of dollars educating XP users of the upcoming change.”

He points out the system is 13 years old and newer offerings have many features which will allow small businesses to be more productive.

“When XP was introduced, the environment was much different and newer systems such as Windows 8.1 are more versatile and configured for this much more mobile time. When small businesses see how these products allow them to do more, faster and with easier interfaces.”

“We spent time with our certified dealers and at two thousand events to get the message across,” he adds.

Microsoft has set up a site to help XP users transition.

According to a survey from Dell Software, 63 percent of organizations have not yet fully migrated away from Windows XP. On top of that, 86 percent of those who have migrated reported challenges with the migration. Organizations like Dell are working to tackle enterprise-level migration, but what about small businesses?

Cloud services provider, Evolve IP, recently conducted a survey to gain insight into what decision makers are going to do to address the XP end-of-life.

Some of the findings include:

  • 7 in 10 will select Windows 7 while just 13.5 percent will go with Windows 8

  • Nearly 8 in 10 expect to support XP internally while 1 in 10 will go with a third party. The rest are still finalizing a plan with 22 percent saying they haven’t fully flushed out a support plan yet.

  •  64.5 percent of those surveyed will incorporate some level of virtual desktops into the mix    

According to Scott Kinka, CTO, of Evolve IP, “It’s clear that XP EOL will be a catalyst for tech makeovers, sooner or later, with one of the most notable being that more businesses are now considering using the cloud for the first time ever.”

For the general population, the impact is much less but nonetheless significant.

Wolfgang Kandek, CTO,

Wolfgang Kandek, CTO, Qualy said the percentage of Windows XP users since January 2013 as gathered from hundreds of millions Qualys QualysGuard  scans has seen a steady decline from 35% in January to 15% in December, 2013.

However he believes that many small businesses will still be running Windows XP after the April 2014 end-of-life date.

“In our statistics, we see that migration away from XP has actually slowed down in the last two months, and we are now expecting over 10% of the machines of our customers to still be on Windows XP by April.

He adds, “We are expecting a slowdown in the last 15 percent of Windows XP users, as the easy migrations possibilities are coming to an end.”

The major issue associated with the loss of support is the ongoing efforts by Microsoft to protect the XP installed base from hackers. With these efforts suspended and given the vulnerabilities of XP, most tech specialists agree users will be exposed to a greater risk of hacking.

As Jason Kennedy, Intel’s Director of Marketing and Platform development warns: “the hackers are out there just waiting for the support to go away. We can see them there anticipating the change.”

Kennedy argues the costs of maintaining and protecting XP systems can outweigh the sums expended on newer, faster and more efficient machines.

“We here at Intel think the productivity gains far exceed the costs for the new equipment and/or software.”

Tim Hegedus, Senior Managing
Analyst at Miro Consulting

Tim Hegedus, Senior Managing Analyst at Miro Consulting is of the opinion that current XP users need to upgrade as an unsupported operating system is too risky.

Among Hegedus’ other thoughts:

  • Windows XP Professional was made generally available at the end of 2001; hence, it’s an O/S that is over a decade old!
  • Microsoft extended support beyond the scheduled April 14, 2009 date – ultimately to April 8, 2014. Many consider this to be a reaction to the poor reception given to Windows Vista. The economic downturn of 2008 and 2009 may have also influenced Microsoft’s thinking.
  • Microsoft views Windows 7, Windows 8, and now Windows 8.1 as stable so the Vista situation appears to have been addressed.
  • While support ends, Microsoft has agreed to extend delivery of anti-malware signatures through July 14, 2015 – an additional 15 months. This appeals not only to those organizations who have not completed their migration (perhaps thinking Microsoft would relent on ending support yet again!), but also to ATM manufacturers – a Bloomberg Businessweek Technology report from January 21st reports that XP is deployed on 95% of the world’s ATMs, including over 400,000 in the U.S.
  • Support also ends for Office 2003 on that same date. Microsoft has not yet indicated what, if any, security updates will continue for this product.
  • One potential surprise: the upgrade from XP to Vista caused many, if not most PCs, to be upgraded as their configuration was not optimized for the new OS. If that upgrade occurred, there was no need for the PC to be upgraded again for Windows 7 or Windows 8.
    However, if a device running XP still has not been upgraded, it will likely require an upgrade for the new OS. (This also means that the device is some seven years old, which might be possible, but one would think not terribly common – think devices deployed in warehouses, garages, etc.)  
  • Organizations with incomplete migrations to a newer OS may struggle with internal policies – and, potentially, the policies of their Clients and Partners – that preclude the use of an unsupported OS.
  • There appears to have been a hit to productivity in two forms: training on the updated software (including both Windows and Office); and in the incompatibility of files exchanged by users during the migration, necessitating the saving of the file in a downwardly-compatible format and resending it to the recipient.

SWC Technology Partner's Deployment Expert Jeremy Alt says “additional efforts will be needed to protect sensitive company data on XP machines. Unfortunately, there are not many options for keeping XP in the environment without introducing significant risk. Organizations should develop their migration plan, which can be as informal as swapping PCs one by one or developing a strategic plan with automation and consistency.”

There are resources available to help in the migration process. For instance, learning expert David Rivers offers a course specifically for migrating from Windows XP to Windows 8. In fact, there are a series of videos on to offer guidance no matter where you are in the migration process.

On the other side, there are experts who believe companies can continue to use their XP programs.

According to Paul Martini, CEO, iboss Network Security, “upgrading Windows XP to either Windows 7 or Windows 8 is critical both from a cost perspective and security point of view. It’s easy to measure the amount of money spent trying to get an aged Windows XP system to work when things go wrong. But it’s hard to put a price on a company’s data. A data compromise due to a new virus can have immeasurable costs to the business that may last for years.”

Here’s some thoughts from Martini:

  • If you’re accustomed to the Windows XP layout and style, upgrading to Windows 7 might be a better choice than Windows 8. The feel of the operating system is very similar and you’ll most likely be pleasantly surprised with all of the feature upgrades that make the Windows 7 operating system run smoother than Windows XP. There’s still plenty of life left in Windows 7. It doesn’t go EOL until the year 2020 and by that time you're almost certain to have to upgrade the hardware anyways, which will come with the latest operating system.
  • When performing the upgrade, of course copy your most sensitive files to a USB thumb-drive or another computer on the network. If the computer hardware is too old and doesn’t support USB, consider uploading the files online to something like DropBox. Although the upgrade should save your data, always assume the worst and make backups of your personal data.
  • It’s likely that some software will no longer run on the newer version of Windows. Compatibility has been made better throughout the years between Windows XP and Windows 7, so most should be fine. Make sure you save or write down any license keys for software on the Windows XP system as you’ll need them if you re-install later.
  • When re-installing software, check with the software vendor to see if the license qualifies for Windows 7/8. In some cases, you may need to download the latest version of a previous version of the software in order to keep the license.
  • If you decide not to upgrade, which is not the ideal choice, you should probably disconnect the computer from the Internet. If you’re using software that requires the Internet, take the plunge and upgrade as soon as possible. The $100 or so you’ll be spending will pay itself back without a doubt

Joe Silverman, owner of New York Computer Help, a computer service company that specializes in Windows XP, Vista, 7, 8, and other operating system platforms believes “those small businesses who still want to continue using Windows XP without Microsoft support may certainly do so.”

He adds, “Just because Microsoft does not support it doesn’t mean their computers will stop working.  It just means Microsoft will not be providing any more software updates to the Windows XP operating system, that’s all.  Typically, these updates will come out to mesh well with other software updates, such as those from Microsoft office.  Occasionally, Microsoft will also release updates to patch up vulnerabilities that may lead to viruses.”

“To cover all bases, it would behoove smaller businesses to seek out a local computer service company to have in case disaster strikes.  If the computer does go belly up, then they’ll be forced to move onto the latest Windows operating system on a new computer,” he continues.

“At that point, it makes sense to move ahead to using the new operating system.  If there are any costly legacy programs used from Windows XP, then virtual software may be set up on the new computer to access such old software.  That way, the best of both worlds are attained, a new operating system along with not paying again for expensive Windows XP software,” he advises.

Steve Lowing, Director, Product Management at Promisec offers these security tips for SMBs.:

  • Increasing virus protection is necessary though companies should be aware that this provides a false sense of security as it will alert you when an endpoint is under duress but doesn’t help remediate the threat.
  • Managing change and configuration control will be fundamental to successful risk management when continuing to run XP
  • owever, Lowing is recommending a migration plan be implemented.

Lowing argues “While there are vendors that will continue to support XP, it is recommended that companies, whether they have three endpoints or three hundred, move all of their end points away from XP.”

He continues: “For companies that do choose to remain on Windows XP, it remains crucial to run anti-malware and virus protection, but should do so knowing that this provides a false sense of security.”

“Yes, these solutions will alert you when an endpoint is under duress, but they will continue to be a target for exploitation given the lack of security and OS updates due to the underlying OS is no longer supported by Microsoft. It’s like having the most advanced radar, without having the ability to act. You would see any threat coming but would be unable to stop it,” he concludes.

“Further, managing change and configuration control will be fundamental to successful risk management when continuing to run XP. By managing inventory and tracking the migration process, companies can continually monitor and protect against threats,” he argues.

Michael Gold

“While cost is a big reason why many companies are opting to avoid the Windows migration, apps may also be a detriment as in some cases, as companies will no longer be able to upgrade or run desired apps on a new platform. There are tools on the market to manage migrations for companies – helping them with inventory assessments, upgrading app versions and performing the migration,” he said.

As the April deadline approaches, end user will need to become more involved and take on a self-service strategy in order for organizations to meet the cutoff.

A direct threat to Microsoft’s dominance in the SMB sector is the very real fact many companies may chose to move to the cloud for critical functions

Intermedia President Michael Gold points out “as important as choosing to upgrade, now is the time for companies to embrace the ease and worry-free experience of the business-cloud. While doing nothing requires no investment and no change in user experience, IT departments face increased support costs as they troubleshoot problems for ten-year-old technology without patches, bug fixes, or phone support from Microsoft.”

Gold points out “as important as choosing to upgrade, now is the time for companies to embrace the ease and worry-free experience of the business-cloud. While doing nothing requires no investment and no change in user experience, IT departments face increased support costs as they troubleshoot problems for ten-year-old technology without patches, bug fixes, or phone support from Microsoft.”

Many companies have made the transition.

Steve Tucker, CIO of Burg Simpson law firm, talks about his Windows XP migration:

“When I joined Burg Simpson over two years ago, there were a lot of legacy installations still running.  The company realized there was a lot of updating to do – Windows XP being one of the outdated platforms in use.  Last May, I pushed for the migration.  I wanted to utilize the capabilities of Windows 7, and realized that XP support would not be around much longer.

When deciding to migrate from XP to Windows 7, there was not much discussion on which tool to use as an application deployment system – we went with Novell ZENworks.  I was familiar with the Novell brand from previous jobs, and liked the usability and effectiveness of the solutions. 

We started with test labs of migrations, which were successful.  We then moved to the company workstations and were able to update all 110 within one week.  There were only two failures during the process and they were due to a set-up issue within Windows XP.  We simply tweaked the settings and redid the process to fix it.

The PCs are working well and there has been a definite boost in productivity for IT since the switch.  Automation and time saved by using ZENworks also leads to overall cost savings.  I would suggest other small and medium sized business update soon.  It can be quick and painless with the right tools.”

Regardless of the path chosen, SMB face challenges brought on by Microsoft’s decision.

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