Will Vista Pump Up Microsofts Future Profits?

While the release of the next-gen Windows operating system is still months away, Microsoft execs already are projecting strong sales. Here's why. (Microsoft Watch)

Microsoft executives already are counting their Vista chickens before the next-generation Windows release has hatched.

A Microsoft vice president on Feb. 1 detailed for attendees of the Merrill Lynch IT Services & Software Conference Microsofts reasons for its high expectations for Vista, the release of Windows client due to ship in the latter half of this year.

Microsoft expects 200 million new PCs to ship with Vista preloaded in the first 24 months that the operating system is available, said Michael Sievert, corporate vice president, Windows Product Management & Marketing.

Comparatively, Windows 95 shipped on 67 million new PCs during its first two years of life.

Company watchers seem to be of mixed minds about Vistas prospects.

/zimages/6/28571.gifClick here to read what Microsoft exec Jim Allchin has to say about building Vista.

A number of them have wondered aloud whether Vista will include enough new features to convince users to upgrade.

Others have questioned how quickly business customers will be ready to deploy the new operating system en masse. Will they kick the tires for a couple of years, making sure all their existing software works perfectly, before taking the upgrade plunge?

But still others say Vista will provide Microsoft with a big bang.

In a Feb. 3 research note, Goldman Sachs analysts were upbeat, projecting that Vista will be a significant driver of both top-line and bottom-line growth for Microsoft.

Goldman Sachs analysts are estimating that Vista could generate $1.0 to $1.5 billion of incremental revenue for Microsoft in the first 18 months following its launch, "with the business upgrade cycle to follow."

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