You can run Office 2003 on Windows 7, but no one would recommend running Office 2010 on Windows XP. Make a list of the applications that will need to be updated and remember that users will need training on both the new operating system and the new applications.
On the server side, Exchange 2003 or 2007 will run on Windows Server 2003, but Exchange 2010 requires Windows 2008.The same is true for the latest versions of SharePoint, SQL Server, and most other server applications. To reduce the impact on the enterprise, you might want to install new servers along with the new server applications, and then migrate users and their data from the old server to the new.
4. Should you upgrade in place, or start fresh?
When upgrading desktop systems, you have two choices: Install the new OS in an existing system, or start fresh with new hardware. Windows 7's system requirements are beyond the capabilities of most PCs that came with Windows XP installed, so you might need to beef up the hardware to upgrade in place. The same is true of servers put in service when Windows Server 2003 was new.
Upgrading in place enables you to transfer user settings, application settings, and more from the old hardware to the new using the Windows migration tool or aftermarket tools. Most applications will have to be reinstalled, and you'll want to run Microsoft's Windows 7 compatibility tester to determine if any of the old applications will have problems running on the new OS.
5. Is virtual desktop infrastructure a viable alternative?
You can avoid acquiring new desktop hardware by deploying virtual desktop infrastructure (VDI). Set up a server application that runs virtual iterations of both Windows 7 and Windows XP desktops, and your users will use their existing Windows XP machines to access these environments. This will help them transition to Windows 7 while ensuring continued access to their familiar Windows XP desktops and legacy applications. VDI will require server and networking infrastructure that will likely offset the savings realized by retaining your old desktop hardware. In the long run, however, VDI will simplify desktop management, and your users will experience an easier transition.
6. Should you invest in migration tools?