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Monday, 11 December 2006 16:26

Vista: Making money for everyone except Microsoft

A Microsoft-sponsored study argues that Windows Vista will contribute $70 billion to its partner economy, but even when Microsoft is paying the research company's bills, it's hard for it to come up with a positive demonstration of how the new operating system will make a profit.

A new research study, commissioned by Microsoft and carried out by IDC, suggests that Vista will contribute $US70 billion to Microsoft's US partners during its first year of release. Vista was made available to business customers in late November, and will be released to consumers at the end of January.

"Relatively rapid and widespread adoption of Windows Vista means that its launch will not only affect Microsoft, but will also have a positive impact on local economies throughout the world," IDC analyst John Gantz said.

IDC also boldly predicts that the launch of Vista will add 100,000 jobs to the US market, while 35 million copies of the OS will be sold in the US from a worldwide total of 90 million. Microsoft makes around 60% of its operating income from the Windows client, IDC said.

"Windows Vista will be an important launch for Microsoft, but it will be an even more important launch for a much larger and more extensive community around the world," the report said.

The IDC calculations suggest that for every dollar that Microsoft earns from Vista, its partner channel stands to make $18 -- a calculation doubtless driven in part by the expensive hardware upgrades needed before most people can run the new OS. Hardware upgrades account for more than half of the $18 figure

Not all research firms are convinced Vista uptake will be as speedy as IDC believes. "Forrester's research shows that 34% of PC decision-makers at North American and European enterprises plan to start their Vista deployments within one year after its release, but how broad the deployments will be is still up for debate," Forrester Research analyst Simon Yates predicted follow the enterprise OS launch.

Forrester estimates that just 5 million business users will be running Vista at the end of 2007. Given the long lead times involved in enterprise rollouts, Vista's long and expensive development cycle, and all that money apparently going the way of partners first, profits from the operating system may still be some time in coming.


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