Given the current economic conditions, I'm sure you've had financial discussions with your spouse or significant other that are similar to the ones I've been having lately with my wife. Money is tight, and getting tighter, and I know more than one person who's just happy to have a job at the moment. But there's a problem with blindly just tightening the proverbial belt: Because sometimes, it actually makes sense to spend money to save money. Economists think of this as the difference between "investing" and "spending" or "consuming."

Here's a classic example that will be familiar to any home owner: You can purchase a programmable thermostat for your home for $10 to $100. The upfront cost for this device can be thought of as "spending" or "consuming," but because it will eventually pay for itself and even provide a financial benefit because of more efficient home heating going forward, it's really an investment. Behavioral economists say that most people have a hard time investing because they can't get over the upfront cost. It's just too hard, sometimes, to reward ourselves in the future by spending today.

If you'll excuse the heavy-handed segue, IT investments can be thought of in the same way. Most businesses today are running with ever-tightening budgets, and many are trying to stretch their past technology investments as long as is possible. But at some point, bolstering aging OSes like Windows 2000 and XP, often with a multitude of third-party solutions aimed at making them more modern (from a security and functional standpoint), becomes more expensive than migrating or upgrading to a more modern Windows version.

And with Microsoft beating the drum on Windows 7, due sometime this year, businesses are getting confused. When does the expense and difficulty of upgrading from what they're running to something newer outweigh the risks of not doing so? And if that's going to happen in the next 6 to 18 months, especially, do they wait for Windows 7 or move directly to Vista? And how do they make this work given the current economic conditions?

Microsoft has heard these and similar questions so incessantly over the past several months that they've provided some guidance on Windows deployments for businesses. The company has also started a Windows for Your Business blog that will discuss these and other related issues over the weeks and months ahead.

The company's advice makes sense, but because of the range of Windows versions out in the market today, the variety of third party solutions installed, the disparity of the hardware, and other issues, communicating it isn't so straightforward. Some guidance does, however, apply to virtually all companies.

First, if you're running Windows 2000, it's time to upgrade to Windows Vista. Windows 2000 extended support ends in 2010, and that's probably not enough time to chart a migration to Windows 7.

If you're on Windows XP, you should first inventory the applications that are deployed throughout your environment. Microsoft has various inventory solutions for both managed and unmanaged environments. You can learn more in the document, Getting Started with Application Compatibility in a Windows Deployment, which you can download from the Microsoft Web site (PDF).

As part of this inventory, you should contact your third party app vendors and discuss compatibility with Windows Vista and Windows 7. You can utilize the Windows 7 Beta now to discover whether your mission critical applications already work on Microsoft's next OS, though of course you'll want to retest on the release candidate (RC) and final builds as well. Microsoft provides guidance for application compatibility testing here.

This inventory and discover will help guide the timeline for your deployment. But that's not the only factor in a migration, of course. You'll need to test your hardware as well. If your PCs are capable of running Windows Vista, they are capable of running Windows 7 as well. Microsoft's Assessment and Planning Solution Accelerator can help you make this determination.

For those that are already midstream in a migration to Windows Vista--and Microsoft assures me that this is a much bigger audience than one might imagine given Vista's undeservedly poor public reputation--the software giant recommends continuing that deployment and sticking with a baseline of Windows Vista with Service Pack 1 (SP1). However, if you're in the early stages of deployment, look ahead to SP2, which will ship in the second quarter of 2009, as your baseline. Either way, migrating to Vista now will make any later transition to Windows 7 much simpler; moving from Windows XP to Windows 7 will be just as difficult as moving from XP to Vista.

Of course, some will simply prefer to skip Vista all together regardless. To this crowd, Microsoft is communicating what it sees as the risks of skipping Vista, which include application compatibility (as XP apps that don't run on Vista also will not run on Windows 7) and timing: While Windows 7 is widely expected to ship sometime in Q3 2009, many customers will still need several additional months of evaluation with the final version of Windows 7 before they'll even be ready to deploy. Will your existing infrastructure make it that long? (I'd add, too, that the "wait until the first service pack" mantra will exist for Windows 7 as well; so that puts the start of most Windows 7 deployments out to mid-2010 at the earliest.)

Another issue to factor into your decision is whether the unique new features in Window 7 warrant waiting for that release. Generally speaking, Windows 7 and Windows Vista are very similar, and only a few key features separate the two, aside from subtle performance gains you'll get from Windows 7. The best of these include DirectAccess (super-simple VPN-like functionality), BranchCache (better network file share performance for branch offices), federated search scopes, BitLocker To Go (full-drive encryption for USB storage devices), AppLocker (white listing of applications approved for end user installation), and a more admin-relevant version of the PowerShell scripting environment.

Overall, this is a complex situation and one that will vary greatly depending on your environment. But understanding the issues involved and the steps you can take to assess your needs should get the ball rolling. Good luck!

An edited version of this article appeared in the February 17, 2009 issue of Windows IT Pro UPDATE. --Paul