Companies are taking their time before installing Service Pack 2 on Windows XP machines, with under a quarter have gone through the upgrade, a new study has shown.

In a survey of PCs at 251 businesses in the US and Canada, asset tracking company AssetMetrix found that only 24 percent of the systems running Windows XP had been upgraded to Service Pack 2 (SP2).

AssetMetrix surveyed 136,120 PCs and found that 37.6 percent of them ran Windows XP. The operating system is more widely adopted among companies with fewer than 500 PCs, and smaller organizations also show the highest acceptance of SP2.

"The popularity of Windows XP SP2 tends to decrease slightly as company size increases," according to the study. But overall "more companies are tending to hold back on SP2 than accept it," AssetMetrix said.

Of the 251 companies surveyed, 44 had fewer than 10 PCs running Windows XP. Two-thirds of the remainder had not installed SP2, while 7.7 percent, had updated their XP-based PCs.

Microsoft released SP2 in August last year. The update makes significant changes to Windows in the name of increased security. As a result, it can render existing applications inoperable. Because of those changes, many businesses are taking time to test the update with their systems.

Microsoft has labeled SP2 a "critical" update and urges all Windows XP users to install it. In February, it said 77 percent of about 800 enterprise customers surveyed in late 2004 planned to deploy SP2 sometime in mid-2005.

AssetMetrix recommends companies install SP2, but only after proper testing.