Windows 7: The Great “White Hope” for IT Spending or Hopeful Optimism?

July 17, 2009 at 10:30 pm Leave a comment

Microsoft Partner Conference Update

Beth Vanni

Beth Vanni

By the end of 2010 more than 20% of the U.S. IT workforce will be using Windows 7.   More than 177 million copies of Windows 7 should be in place worldwide – 60 million of that in the U.S.   These July 2009 projections from IDC align with the level of optimism and enthusiasm expressed by Steve Ballmer, Microsoft’s CEO, as he marched back and forth on stage with his customary passion and salesmanship.
Perhaps even more interesting was the number of hands that went up in the main session when Ballmer asked how many of the 9,000 some odd partners in the audience were already running or using Windows 7.  To my eye, it seemed that about 2/3 of the audience raised their hands.   Bill Veghte, SVP of the Windows Business, reported that over 16,000 hardware and software partners are currently developing on Windows 7;  Microsoft experienced nowhere near this early momentum for previous Windows releases prior to their general availability.  IDC projects that the 85,000 Microsoft partner companies in the U.S. will collectively employ nearly 700,000 people and will sell $18.51 of services and products for every $1 of Windows 7 sold.  According to their projections, the economic impact of this market should total $100 billion in products and services sold around Windows 7 into the U.S. market between now and by the end of 2010.Surely, this year’s Microsoft partner conference is full of renewed product innovation.   As we all know, Microsoft was originally a technology innovator first, then a marketing powerhouse second.   So, back to its roots it goes.  With the disappointment realized in the market last year around Vista, Microsoft has a big promise to uphold to the breadth of its partner community.   Hence, there are major product announcements or upgrades planned for nearly every part of the Microsoft product portfolio — Windows, Office, Sharepoint, Azure, Dynamics and Windows Server, among others.
At this same conference, however, Gartner’s market projections for economic rebound were less glowing.   Microsoft Worldwide Partner Conference For the SMB section of the market (under 1,000 employees, by their definition), they showed overall software spending to still be at negative growth rates (-1.6%).  Granted, this was “less bad” than other IT product categories (desktops, servers).  But in the segment of the market where the vast majority of Microsoft partners specialize, the forecast for pure IT demand still wasn’t rosey.   This varying degree of optimism about true IT spending, regardless of the innovation offered by major product releases, still gives the channel pause.   The Gartner session was packed – partners taking pictures of the data on the screen with their smart phones.
In my opinion, the degree of success Microsoft will have with Windows 7 as their major computing platform will more than ever rely on partner confidence and investment.   The enhancements to the Microsoft Partner Program itself (now known as the Microsoft Partner Network) were mostly futures.  In fact, the new structure will cause most partners to reevaluate their investment and replace themselves in the program over the next 18 months.  During that time, the bar will be raised for performance in order to reach the top tiers of the new program (Competency or Advanced Competency).   So, Microsoft better keep partners busy building applications, launching new services and asking for customers to upgrade.   If partners are hesitant to invest in Windows 7 to any similar degree they were with Vista, Microsoft and IT software spending outlooks will be in big trouble for the next 12 months.
We’re here at the conference for two more days.   We’re continuing to look for the rest of the benefits package partners should expect from Microsoft to driven customer support, enthusiasm and adoption into the market over the next year, ahead of natural market demand.

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Microsoft Worldwide Partner Conference Update Day 1 Microsoft Worldwide Partner Conference Update Day 2

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