Talking to analysts on Friday, Microsoft (NSDQ:MSFT)’s CFO Chris Liddell said business spending on computers continues to be very slow and upgrading won’t begin until sometime in 2010, while probably gradually increasing over a two-year period.

Liddell talked to analysts after the fiscal first-quarter earnings report Friday, as concerns over the rate businesses upgrade their computers needed to be talked about more specifically.

While there’s no doubt slow business PC sales will continue to be the case, the good news was reactions to Windows 7 from corporations has been very good, and better than Microsoft had expected.

“On the business side, anecdotal feedback at this stage is good from corporate (customers) in terms of reaction to Windows 7 and the benefits it brings,” Liddell said. He added that once things start to kick in for business PC sales, he’ll at that time “talk about it spreading over the next couple of years.” What this is referring to is the inability to project the time-frame all this will happen in. So until there is real spending from businesses on new PCs it’ll be impossible to give guidance on expanding the Windows 7 marketing initiative out in any meaningful way.

Windows 7, which launched Thursday, the day before their quarterly earnings report, is looked to by Microsoft to help them turn business PC sales around, but not, as mentioned, in the near term.

Reflecting the difficult economic environment, business PC sales from Microsoft fell in the high single digits, although interestingly, consumer PC sales held fairly strongly during the quarter ending September 30.

Resistance to buying and upgrading their PCs will eventually have to end, said Liddell, and the inevitable need for replacement will eventually spur more sales and get the numbers back up. The hope of Microsoft is it’ll begin in 2010 in a meaningful way, although even it if does, it won’t happen all at once and will be a gradual process.

Concerning the launch of Windows 7, Microsoft instituted a pre-order mechanism for the OS, which according to Liddell was “Right at the top end of our expectations.”
 
In the business IT market the company said there were continuing poor sales for client software, among its worst performers. There are no signs that’s going to change any time soon.
 
Some good news was the server software unit gained market share in the quarter, with momentum expected to continue there. Although it didn’t get as much fanfare, also released this week, along with Windows 7, was Windows Server 2008 R2, which the company believes will make gains in the higher-end sector.

The company continues to work on its cloud computing strategy, which will evidently embrace just about the entire product line it produces. The good news there is Google’s (NSDQ:GOOG) efforts have floundered and slowed down because of quality issues, and so hasn’t been able to grow out as quickly as they had hoped, giving Microsoft more time to bring their offerings to market. Of course many users of Microsoft products will wait until they’re online, but Google has lost some time in trying to woo users away from Microsoft before they bring the force of their software to the cloud through Azure.

Revenue for their fiscal first quarter came in at $12.92 billion, with net income finishing at $4.4 billion. These beat the expectations of the street, although was fare below its numbers for the same quarter in 2008. Cost cutting helped the company increase their profits beyond what was expected.