Microsoft Windows 7 Could Prompt Tech Refresh, Says Deutsche Bank

 
 
By Nicholas Kolakowski  |  Posted 2009-07-27 Email Print this article Print
 
 
 
 
 
 
 

A report from Deutsche Bank suggests that companies will purchase Windows 7 and use the new Microsoft operating system as an excuse to upgrade their systems. The report also finds that businesses are increasingly interested in virtualization and upgrading to 64-bit computing, and will make the necessary IT investments to upgrade accordingly.

A report by Deutsche Bank suggests that the release of Microsoft's Windows 7 operating system on Oct. 22 will prompt a massive tech refresh and possibly build a renewed market for hardware and software vendors.

The release of the new operating system, upon which Microsoft is relying to strengthen its revenue numbers for the second half of 2009, prompted Deutsche Bank to conduct a deep-drill survey of the technological ecosystem surrounding Windows 7.

"Initial industry feedback and the results of our proprietary CIO survey indicate that a faster user take-up than [for] the highly successful Windows XP is likely," said the report's executive summary. "The resulting upgrade cycle could develop into a powerful revenue driver benefiting both software and hardware plays globally."

Specifically, an internal survey of 120 IT buyers around the world suggested that, "Win-7 penetration rates could exceed the levels achieved with [Windows] Vista and start to match the penetration rates that XP & Windows 2000 took two years to reach, potentially within 12 to 18 months."

Furthermore, the report added, "the survey data fully supported the view that Win-7 will drive hardware investment, with the clear majority [75 percent] of respondents indicating that they anticipate upgrading their hardware infrastructure at the point of Win-7 migration."

The hardware infrastructure upgrade could presumably come thanks to small and midsized businesses and the enterprise looking to replace increasingly geriatric PCs, which by 2008 had an average age of 6.1 years, as well as an increased interest in virtualization and 64-bit computing.

That need for a hardware refresh, combined with new software-ecosystem requirements, could benefit a number of companies, including Intel, Advanced Micro Devices and Nvidia for semiconductors, Samsung and Micron Technology for memory, Seagate Technologies and Western Digital for storage, and Hewlett-Packard and others for hardware.

About 13 percent of those businesses surveyed planned to deploy Windows 7 immediately upon release, with another 21 percent planning to follow "relatively early" in the release cycle. By comparison, XP and 2000 took roughly 24 months to hit penetration levels of 35 percent, a number that Windows 7 could hit in half that time.

Deutsche Bank paints a more optimistic picture for Microsoft than an earlier survey by ScriptLogic, which suggested that six out of 10 U.S. companies will not immediately upgrade to Windows 7. Many of those companies cited concerns over cost and interoperability, although a larger percentage planned on integrating the operating system into their infrastructure by the end of 2010.

About 35 percent of those surveyed by ScriptLogic said their companies had been skipping upgrades and refresh cycles as the continuing recession put a squeeze on their IT budget.

Realizing that it faces a cautious consumer base thanks to the economy and to bad memories of Vista, Microsoft has planned an aggressive push for Windows 7 that includes substantial price cuts and promotional offers. The operating system will sell for an average of 10 percent less than Vista.

 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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