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

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.

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