Vista Could Mean $70B in Partner Business: Redmond Research

By Peter Galli  |  Print this article Print


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Microsoft partners could see $70 billion in business from Vista rollouts and peripheral implementation in its first year of shipment.

A Microsoft-commissioned study that looks at the economic impact of Windows Vista in the United States in its first year of shipment estimates that for every dollar of Microsoft revenue from the new operating system, the ecosystem around it will reap $18 in revenues.

That would result in about $70 billion in hardware, software packages and services being sold in 2007 by OEMs, the IDC study found.

The report, titled "The Economic Impact of Microsoft Windows Vista in the United States" and authored by IDC analysts John Gantz, Al Gillen and Marcel Warmerdam, says it expects Vista to be installed on more than 35 million computers in the United States—driving more than $4 billion in revenue to the Redmond, Wash.-based firm.

That means the United States will account for just over a third of the more than 90 million computers expected to have Vista loaded worldwide.

The IDC study also says it expects Vista-related employment to reach 18 percent of IT employment in the United States in its first year of shipment, with the 200,000 IT companies that produce, sell, or distribute products or services running on Vista expected to employ over 660,000 people, with another 1.15 million employed at firms that use IT.

While much of this will merely shift from Windows XP-related employment, the report notes that some 60 percent of the growth in Windows-related employment will be driven by Windows Vista.

"These direct benefits—157,000 new jobs and $70 billion in revenues to companies in the U.S. IT industry—will help local economies grow, improve the labor force, and support the formation of new companies," the report says.

"The indirect benefits of using newer software will help boost productivity, increase competitiveness and support local innovation," it says.

Brad Goldberg, general manager for the Windows client business group, told eWEEK that Microsoft had commissioned the study so as to be able to answer the many questions it received about partner investments and returns. "This gives us a great baseline going forward to talk about this," he said.

Microsoft partners are also expected to invest in the vicinity of $10 billion readying and rolling out their products and services around Vista, the report says.

The findings of this study mirror a similar Microsoft-sponsored IDC study in Europe.

Spending on Vista will also be small in relation to total IT spending, coming in at around 1 percent of that in the United States and less than 4 percent of total software spend.

The study also underscored the foundational role that Vista played in the IT industry, and "shows that Windows Vista is helping to create jobs," Microsoft's Goldberg said.

IDC was also predicting that, in 2008, 80 percent of Microsoft client operating systems that are shipped in the enterprise will be Vista, which would be the fastest adopted version of Windows ever, he said.

Click here to read more about how one report says only half of the average business PCs in North America are able to meet the minimum requirements for Vista.

"Different firms are going to make different projections around the rate and speed of Vista adoption, but if you cut through the rhetoric and step back and look at the numbers, almost all agree that Vista will be deployed faster than any other operating system," Goldberg said.

Check out eWEEK.com's for Microsoft and Windows news, views and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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