By now, you've seen how Microsoft (NASDAQ:MSFT) blew the market away with its fiscal first-quarter earnings report.

Not only did Mr. Softy report better-than-expected revenue and earnings, but its $1.47 billion in deferred revenue -- a rough proxy for demand for its newly released Windows 7 operating system -- was better than the $1.1 billion to $1.3 billion management had projected last quarter. That at least suggests both strong consumer interest and above-average interest from hardware partners, such as Dell (NASDAQ:DELL) and Hewlett-Packard (NYSE:HPQ).

Skeptics will tell you that Microsoft is a hanger-on, and that Windows 7 won't much matter. "The question is will corporations [whose] systems are dependent on XP and older versions of [Internet Explorer] each spend millions in the next year to switch to 7," wrote Motley Fool CAPS investor kevhead64 last week. This Fool envisions chief information officers refusing 7 as they did Vista:

This is an issue for major corporations who are still using programs such as IE6 because of compatibility issues with newer versions of Microsoft products and their own software applications. I can already tell you deploying a 7 customized clean image isn't as simple as XP. Will corporations be willing [to dedicate] resources to this new system in the next year? [I'm] saying no.

I'm not so sure. Reviews of Windows 7 have been largely positive, with some comparing 7 favorably to Apple's (NASDAQ:AAPL) business-savvy Snow Leopard edition of Mac OS X. Clearly, there's room for debate.

That's true even among investors. Those following Microsoft in our 140,000-strong CAPS database, as a group, remain undecided:



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Sources: CAPS, Yahoo! Finance.

Data current as of Oct. 26.

I'm standing with the bulls at current prices, for the same reason CAPS All-Star Melaschasm is. "During the months leading up to the launch of Vista, I heard lots of bad things from my IT friends. Leading up to the launch of Windows 7, I am hearing mostly good reports," this Fool wrote.

Precisely. For as clever as Apple's new ads have been -- ads that play on fears that migrating to Windows 7 from XP will be difficult, and that it would be easier to simply move to a Mac -- Microsoft is still by far the world's most dominant supplier of computer operating systems. Windows 7 should help Mr. Softy to continue that tradition.

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Fool contributor Tim Beyers had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy would appreciate it if you would grab that hammer in the corner. Yes, that one. Thanks.