Microsoft's partners will invest roughly $10 billion into Windows Vista readiness and generate $70 billion in related products and service sales in 2007, said an IDC study commissioned by the software giant.
Next year, 90 million copies of Vista will be sold, including 35 million in the U.S., according to the forecast, which is based on an economic impact model that IDC developed two years ago to measure the Microsoft industry.
As a result, Microsoft will earn $4 billion next year and its total partner ecosystem -- including software and hardware vendors, solution providers, resellers and distributors -- will generate $72 billion collectively, the IDC study said. The report said that for every dollar Microsoft earns from Vista, partners will enjoy $18 in service-related revenue.
Unlike forecasts by other research firms, which claim that most businesses won't deploy Vista until 2008, the Microsoft-commissioned IDC study projected a fast uptake of the operating system over the next year that will fuel product and service sales for the channel.
"When you look at the net impact, it's about $70 billion in revenue for partners linked to Vista. [Vista] will be adopted faster than any previous operating system we have released," said Brad Goldberg, general manager of Microsoft's Windows Client Product Management Group. "We're a platform company, and Vista is the most lucrative platform we've delivered to partners."
Goldberg said Vista's new search and find, BitLocker encryption and ease of deployment features will spur adoption of Vista. He said the corporate sector is ready to move to the new platform because Windows XP was considered more of a consumer upgrade when it launched in 2001 and its followup, Windows XP Service Pack 2, was an interim update.
"Two years after Vista's release, it was low single digits in terms of where XP was in deployment," Goldberg said, adding that Microsoft took steps to promote a big upgrade cycle for Vista. "We focused a lot on rate of usage and rate of deployment across all PCs."
And IDC predicts that Microsoft will be successful in that endeavor. The study said Vista will represent about 80 percent of all client operating systems shipped into the enterprise in 2008.
The Framingham, Mass.-based research firm also noted that Vista will account for 1 percent of total U.S. IT spending in 2007, but the platform's economic impact will be felt across the IT industry. The study said Vista will drive the creation of more than 157,000 Windows-related jobs in the United States and will represent 18 percent of all IT employment in its first year on the market, accounting for about one-third of all new IT jobs.
According to a study by Softchoice, a large reseller, nearly 50 percent of all PCs in the market aren't equipped to support Vista. Many expect this will inevitably drive a strong PC refresh upgrade cycle.
Still, Directions On Microsoft analyst Paul DeGroot maintained that many companies that acquire Vista-capable PCs in 2007 will re-image them with Windows XP until they are ready for full deployment.
Microsoft officially launched Vista Business, Vista Enterprise and Vista Ultimate for its volume license customers on Nov. 30 and plans general availability of the consumer versions to the channel and retailers at the end of January.
One East Coast licensing expert said he expects much of the Vista uptake in 2007 to be consumer-related. "Microsoft has done an awful lot of testing on Vista and has never before had thousands of beta testers. But all that said, if you're a CIO of a midsize or large company, you'll wait a year," said Scott Rosenberg, founder and CEO of Miro Consulting, Fords, N.J. "The savvier CIOs wait about a year until more bugs are discovered and fixed."
IDC projected that the overall IT industry will grow 5 percent annually through 2010. Of the total $496 billion in IT spending in 2007, $134 billion will come from packaged software, $151 billion from hardware sales and $211 billion from IT services. IDC said that for every dollar of software sold, IT service firms pocket $2.25 in revenue.