REDMOND, Wash. (TheStreet) -- Microsoft's (Stock Quote: MSFT) Windows XP operating system will soon go the way of buffalo. Worry not, though, we're going to tell you how to install your new software.

In case you haven't been keeping up with the news, the software giant is adopting a take-no-prisoners attitude toward the rollout of its latest operating system, Windows 7, which can be pre-ordered. It features better search tools and improved performance for easier networking. Microsoft's new software is meant to take on competing systems by Apple (AAPL) - Get Report (Stock Quote: AAPL), Red Hat (Stock Quote: RHT) (RHT) - Get Report and Google (GOOG) - Get Report (Stock Quote: GOOG), which have been encroaching on the company's turf.

Sure, you could buy new computers for your office with Windows 7 already installed, but that's not the sensible way to deploy this technology. I recommend saving $500 by upgrading your PCs yourself.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get ReportEarlier this week, I told you how to prepare for the installation by removing unused programs and backing up your data using cheap, portable hard drives and free Web-based accounts. Now it's time to upload Windows 7.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get ReportStep 1. Back up your data.

First tip: DO NOT use Windows' back-up tools.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report Microsoft sets the standard for uselessness in data recovery. But fear not, storage options from companies like Western Digital (WDC) - Get Report and Toshiba usually come with software that lets you back up your data with one click. Just make sure you're backing up the right data, and then let the thing run.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get Report Now, you should locate your program discs for Microsoft Office and other software you use. (I assume you're running legal copies of your software, right?)

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get ReportStep 2: Learn to read the IMAP.

Now that you're all backed up, you have plenty of time to do what you should have done a long time ago: Start using Web-based office and collaboration software.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get Report Online office-software providers like Google or Zoho make configuring your desktop e-mail systems easy. The secret is not to use a so-called POP e-mail account. Instead, run your business's e-mail via IMAP, or "Internet Message Access Protocol." IMAP e-mail automatically syncs your messages to all the devices that use your email account.

Simply follow Google's step-by-step instructions for configuring Outlook to work with Gmail via IMAP. This is the greatest small-business tool since the cell phone.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get ReportStep 3: See how compatible you are.

Microsoft realizes how much its failed Vista system angered customers. So the company has worked hard to alert you of potential incompatibility with other software using its Windows 7 Upgrade Adviser. Download it and do what it tells you to do it.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get Report There will be some glitches with smaller programs. But all in all, if software gets by this code, it will work for you.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get ReportStep 4: Double check!

Make sure you're back up. Before you upload, check that your computer is cleaned of all unwanted programs and that your data is backed up on your portable drive. Then check that your desktop e-mail and Web-based email systems are in sync, and that everything on your computer is compatible with Windows 7.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get Report Most importantly, make sure that your back-up drive is disconnected from your PC.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get ReportStep 5: Upgrade your computer.

Put the Windows 7 system disc in your computer, double check that your back-up drive isn't plugged into your PC and click install. It will take about two hours to upgrade your PC.

(AAPL) - Get Report (RHT) - Get Report (GOOG) - Get Report (WDC) - Get ReportBottom line: Going DIY for your Windows 7 upgrades is real work. But look at the value you have created: You have developed a back-up system that actually protects your data. Using the Web, you can access your office data from your mobile devices or any computer on the planet. And you have improved the performance of your PCs, almost certainly extending their lifespans. Machines running Windows 7 simply rock.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at