Vista's Hazy Outlook

Solution providers can be forgiven for being a bit confused about all of the forecasts for how quickly Microsoft's Windows Vista will--or will not--catch on among business and consumer buyers. But resellers shouldn't get bogged down with the numbers. The upshot is that while waves of buyers won't be migrating to the new desktop operating system overnight, solution providers can expect steadily growing demand for Vista and related products and services through 2007 and beyond.

While some customers will upgrade to Vista because, well, just because it's there, solution providers can't forget that their job is to offer the value that makes upgrading worthwhile. "It's up to [channel] partners to give customers a good reason why they should upgrade," says Jonathan Edmett, sales vice president at Solutions Consulting Group (SCG), a San Diego-based solutions provider and Microsoft Gold partner.

Microsoft launched Vista Business, Vista Enterprise and Vista Ultimate for its volume-license business customers Nov. 30. Consumer versions of the operating system are slated to hit the channel Jan. 30.

Perhaps the most upbeat forecast of Vista sales comes from IDC, which projects that Microsoft will ship more than 160 million new client OS licenses this year and 56 percent of those—almost 90 million—will be for Vista (both business and consumer versions). In 2008, 88 percent of the 175,000 client OS licenses Microsoft will ship will be for Vista, according to the market-research firm.

Those numbers mean big business for solution providers, given that half of all the software sold in the United States is for Microsoft client OSes, says John Gantz, chief research officer at IDC. "I think it will be a good opportunity for channel partners," he says, noting that key technology upgrades like Vista, which require new hardware, services and training, don't occur very often.

In a Microsoft-commissioned study, IDC concludes that Vista will generate $72 billion in related hardware, software and service revenue for solution providers, hardware vendors, distributors and resellers. That's the return on the $10 billion the report predicts solution providers will spend on Vista readiness. Channel partners will generate $18 in service-related revenue for every $1 Microsoft earns through Vista sales, the report concludes.

NEXT: But other studies pour cold water on overheated expectations.