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Microsoft banks on Windows 7 double holiday hit

Business as usual

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Comment Microsoft has enlisted the dedicated cheerleadership of IDC to write a report that says how Windows 7 will boost employment and revenue for the IT industry as a whole - and for companies in the Microsoft partner ecosystem in particular.

The software giant paid IDC to produce exactly the same kind of reports during 2006 on Windows Vista. The report came out between Windows Vista's "business" and "consumer" launches and saw IDC predict everything would be fabulous for adoption.

Treading carefully and comparing the two paid works, it looks like Microsoft is hoping it can milk two periods of busy consumer shopping activity this time around to boost Windows 7.

For partners, it seems Windows 7 will mean business as usual with the usual round of upgrades, but no bonanza they can retire on.

IDC is reported to have said Windows 7 will hit 177 million units shipped by the end of 2010.

That compares to 100 million units of Windows Vista that IDC in 2006 said would have shipped by the end of the first year of the operating system's availability - which we should take to be the end of December 2007. You can download the 2006 paid report here (warning: PDF).

Unsurprisingly, Microsoft claimed Windows Vista hit this 100 million number on time. It reported the number in January 2008. The company went on to claim 180 million units had shipped six months later in June, the end of Microsoft's fiscal year.

This time, on Windows 7, Microsoft and IDC have changed the benchmark for measuring uptake - from the relatively easy measure of a year to the catchy, but awkward, "end of 2010." Windows 7 is due on October 22.

That will make it difficult to directly compare how Windows 7 is performing next to Windows Vista.

Dissecting the 177 million number, it seems IDC expects Microsoft can nearly double the unit shipments of Windows 7 over a slightly longer time frame than they gave Windows Vista.

It's that "slightly longer" bit that's important.

The duo have carefully given Windows 7 the benefit of an additional three months to hit projected sales targets so that Microsoft can claim - later - that Windows 7 hit targets.

These three months are an important three months, because they encompass the busy holiday shopping periods of Thanksgiving and Christmas.

With a launch of October 2009 and by factoring in the "end of 2010", IDC and Microsoft are going for double bubble with two bursts of Thankgiving and Christmas shopping activity in 2009 and 2010 to help boost the numbers on Windows 7 unit shipments and hit the new target.

Why shift the benchmarks and make comparisons with Windows Vista hard? The stakes are higher thanks to the debacle of selling Windows Vista and the growing mantra inside Microsoft and the industry than Windows 7 is "better."

Clearly, direct comparisons with Windows Vista would not be welcomed, so a different benchmark makes comparisons harder.

The extended benchmark also indicates Microsoft hopes the additional three months of the 2010 holiday shopping season can boost the all-important numbers. It took six months for Windows Vista to add another 80 million units to the magic 100 million number.

It looks like Microsoft will hope for better overall sales with the boost of holiday season 2009 and 2010 to work their sales magic.

For partners, meanwhile, it looks like they will earn exactly the same on Windows 7 as they got on Windows Vista. IDC said every $1 Microsoft earns on Windows 7 will equate to $18.50 for the ecosystem. That compares to $18 for the ecosystem on every $1 that went to Microsoft on Windows Vista, in IDC's report that came out on that operating system in 2006.

According to IDC, each $1 spent on Windows 7 will yield $10.21 in hardware sales, $4.43 in software sold, and $3.88 in services revenue.

Clearly, Microsoft and IDC are banking on an uptick in the health of the overall PC market, which has been suffering so much it spanked Microsoft's core client business and pushed Microsoft to report two unprecedented quarterly drops in corporate revenue. ®

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