Your quote is missing the end, required for it to make sense (irrelevant parts omitted):
> When Windows ME and Windows Vista came out [...]. Microsoft was forced to respond by making [...] Windows XP and [...] Windows 7 respectively.
It's basically from ME and Vista to XP and 7, respectively. AFAIK respectively in this context means that for ME, they were forced to respond with XP, and for Vista, they were forced to respond with 7.
> When Windows ME and Windows Vista came out [...]. Microsoft was forced to respond by making [...] Windows XP and [...] Windows 7 respectively.
It's basically from ME and Vista to XP and 7, respectively. AFAIK respectively in this context means that for ME, they were forced to respond with XP, and for Vista, they were forced to respond with 7.