The firm believes the true pain and costs caused by upgrading will not be widely recognized until 2008 to 2009.

On productivity, Hydrasight believes that a business case built on satisfying end-user morale and aiming for increased productivity gains is misguided.

"Any productivity benefits gained will be marginal compared to the overall investment made in upgrading to Vista. Hydrasight also cautions organizations against the presumption that Microsoft Office upgrades will remain independent of Vista," the company said. "Our research indicates Office upgrades are relatively unattractive, even for savvy organizations, as they recognize that personnel are more familiar and productive with existing versions."

Hydrasight claims additional features will only provide "marginal" productivity benefits that will be outweighed by the costs of other product dependencies, migration, administration, support and training. However, functional dependencies on other Microsoft product lines will eventually sway some organizations to co-migrate.

Regarding legacy operating system installations, Hydrasight claims its research shows that a significant portion of Australian SMBs are yet to upgrade to Windows XP, released in 2001.