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Drop-Dead Date Looms for Microsoft's Windows XP

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You won't believe who's still using those old PCs.

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A handy countdown clock on the Microsoft (NASDAQ:MSFT) site is ticking through the minutes until April 8, when the venerable and very outdated Windows XP operating system will no longer be supported by the company that created it way back in 2001.

Nobody can say the company didn't warn us, but that might not cushion the blow.

Somewhere between 30% and 40% of the world's computers are still running on XP. The lower number would translate to nearly 500 million computers. All of those computers are at least six years old, since that's when Microsoft stopped installing the operating system in new computers.

It's not like those personal computers are going to blow up in anybody's face on April 8, but some of their users might wish they had. The absence of support will mean that Microsoft will no longer track or fix newly discovered problems, security flaws, malware, and viruses in XP. Users of XP will no longer receive the famous "Patch Tuesday" download, in which the company automatically sends updates and fixes to its software, on the first Tuesday of each month.

In short, those computers are vulnerable to hackers, who are widely assumed to be eagerly watching that clock countdown, too.

This is not a nefarious plot by Microsoft to goose personal computer sales. Its XP operating system has lasted for some years beyond the normal life cycle of a computer program, and it has been replaced by a more modern operating system, not once but three times. Each generation -- Windows 7, Vista, and Windows 8 -- has added significant levels of security designed to prevent viruses from spreading from an individual computer through the Internet.

It is having an effect on sales, though. Hewlett-Packard (NYSE:HPQ) credited replacements for computers running XP for helping it beat sales expectations for the last quarter of 2013.

Nevertheless, Microsoft might wind up with a public-relations nightmare on its hands. Apparently, 95% of the world's ATMs are running on Windows XP. So are many medical systems, retail credit card systems -- you name it.

The company has a perfectly rational explanation for its decision to cut off XP support, and it seems likely that nobody is going to want to hear it once the security breaches start occurring.

"Abandoning Windows XP is a big mistake, especially since Microsoft has not been very successful in transitioning XP users to newer systems," an executive of Avast, an antivirus software company, warns in a blog post.

Consumers have non-Microsoft choices, some of which weren't available back when XP was introduced. Notably, there are Google (NASDAQ:GOOG) Chrome devices, which are cheap, light, and suitable for tasks like Web browsing and emailing, if not for heavy-duty office tasks.

And, nobody knows how many of those XP machines are actually gathering dust in the closets of their owners, who are now walking around with pocket-sized devices that do the trick most of the time.

Some percentage of Windows XP computers may not be hooked up to the Internet, in which case their owners can keep using them until their machines literally do blow up.

The real problem is in business and government, and some of those folks are going to be in a lot of trouble next month.

Businesses have been dragging their feet since 2008 because of the significant cost involved, and not only for new hardware. Many are using customized software that will have to be totally reworked, and even basics like word-processing software will have to be replaced.

And then there's the federal government.

The government has purchased hundreds of thousands of new computers over the past two years, as the drop-dead date for XP approaches. But according to a new report in the Washington Post, hundreds of thousands of XP-equipped computers are still rattling around in the federal system, including many that handle sensitive classified military and diplomatic materials.

The Department of Homeland Security claims it should have no XP machines in place by April 8. The departments of Defense and State claim "nearly all" will be gone, the Post reports.

But other agencies apparently didn't get the message -- literally. A draft of a Homeland Security action plan that would have placed a priority on upgrading government computers, issued in 2012, apparently went nowhere.

Some federal bureaucrats are apparently pretty miffed that Microsoft has declined to offer them free support for their Windows XP computers past the deadline.

Instead, Microsoft is offering customers a $50 gift certificate for replacing an XP system.

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Position in MSFT.
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