by Playfuls Staff |
11th December 2006
IDC has recently unveiled the conclusions of a multi-year study about Windows Vista’s impact on the global and the US economy in the future. According to it, Vista is an El Dorado for other companies rather than Microsoft.[more]
Microsoft declared that its operating system accounts for 30% of the company’s revenue and 60% of operating income. Next year, Windows Vista will be followed by two other revenue-driving applications, Office 2007 and Exchange Server 2007, which will also generate a lot of money on the market.
According to IDC, Vista's impact on the IT market will go far beyond Microsoft, driving revenues and growth for more than 1 million IT companies worldwide that sell hardware, write software, provide IT services, or serve as IT distribution channels:
-Within its first year of shipment, the analysis firm expects Windows Vista to be installed on more than 90 million computers worldwide. More than 35 million computers in the U.S. are expected to run one of Vista’s many flavors.
-In the U.S., Windows Vista-related employment will reach 18% of IT employment in its first year of shipment.
-Within the U.S., in 2007 as many as 200,000 IT companies that produce, sell, or distribute products or services running on Windows Vista will employ over 660,000 people; another 1.15 million will be employed at IT using firms.
-While much of this employment will shift from Windows XP-related employment, over 60% of the growth in Windows-related employment will be driven by Windows Vista.
- For every dollar of Microsoft revenue from Windows Vista in 2007 in the U.S., the ecosystem beyond Microsoft will reap $18 in revenues. In 2007 this ecosystem should sell about $70 billion in products and services revolving around Windows Vista.
- Microsoft partners are expected to invest in the vicinity of $10 billion between now and the end of 2007, readying their products and services around Windows Vista and then rolling them out.
On a worldwide basis, IDC predicts that more than 90 million units of Windows Vista will find their owners next year. In the U.S. that means more than 35 million units should be shipped, driving nearly $4 billion in revenue to Microsoft. In the scheme of total IT spending, Microsoft's Windows Vista revenue will be small- about 1% of total IT spending in the U.S. in 2007 and less than 4% of total spending on software. But Windows Vista means more than revenue to just Microsoft. It will also drive revenue for hardware companies, other software companies, service firms, and channel firms.
Also based on worldwide studies, IDC forecasts that by 2007 packaged software will account for 21% of total IT spending, while in the U.S. it will account for 27%. That's spending on operating systems, applications, and development tools for everything from ultra portable computers to large mainframes. But this software generates related activity. People in service firms install, integrate, support, and train others on software. People in computer stores, system resellers, and distribution companies spend time selling and delivering software.
Because software is more complex to sell, service, and support than hardware, dollar for dollar, software generates more downstream economic activity than hardware. IDC's analysis of the IT services market shows that for every dollar of packaged software sold, there is another $1.25 in revenue to IT service firms. That software revenue and additional services revenue also drives revenue in the distribution channel. These multiple revenue streams pool to help fund employment.
IDC's interviews with user organizations also confirm that in IT organizations, the allocation of staff is quite disproportionate in favor of software in comparison to software's share of the external IT budget.
In short, while packaged software accounts for 27% of IT spending in the U.S., it drives 65% or nearly two-thirds of IT employment.
The U.S. will show modest but healthy growth in IT spending between now and early 2007, when Windows Vista will be fully available, and good long-term prospects- an average of over 5% a year in IT spending growth through 2010. The overall U.S. forecast for 2007 looks like this:
-IT spending, $496 billion
-Packaged software spending, $134 billion
-Hardware spending, $151 billion
-Services spending, $211 billion
-Packaged software shipped (by dollar value) that runs on Windows, ~50%
-IT employment, 10.3 million
-Software-related IT employment, 6.7 million
This is the environment into which Windows Vista will be launched. Conditions are good for the investment required of user companies and Microsoft business partners to make the rapid transition from Windows XP or NT to Windows Vista predicted by IDC.
Applying the same methodology used to determine software-related employment, IDC has determined Windows Vista-related employment. As a subset of the software market, Windows Vista will drive a subset of employment. As an operating system, however, it will drive a larger share than the average application package or development tool would.
In the U.S. 18% of IT employment- 1.8 million- will be Windows Vista- related in its first 12 months of shipment.
Windows Vista's influence will be even greater in 2008, when enterprise deployments hit full stride. In 2008, IDC predicts that 80% of Microsoft client operating systems shipped into enterprises will be Windows Vista.
