Windows 7 Impact on PC Sales Will 'Not Be Huge,' Says Microsoft's Ballmer

Microsoft CEO Steve Ballmer suggested during a Munich press conference that any surge in PC sales around the launch of Windows 7 will "probably not be huge." The statement reflects some of Ballmer's more cautiously optimistic comments about the IT economy and Microsoft's near-term prospects within it, although the CEO has also suggested that an industry-wide tech refresh is eventually inevitable.

In comments delivered during a news conference in Munich, Germany, Microsoft CEO Steve Ballmer attempted to play down the role of Windows 7 in a possible uptick in PC sales after the new operating system's release on Oct. 22.

"There will be a surge of PCs but it will probably not be huge," Ballmer told the audience, according to a Reuters report. He also suggested that the tech sector would take some time to rebound to its former levels, in the aftermath of an economic recession that saw PC sales decline and Microsoft's own revenues start a downward trend.

The comments seem part of a larger campaign on Ballmer's part to regulate anticipation for Windows 7, even as he aggressively promotes the software heading into its release. Speaking at a company event in San Francisco on Sept. 29, Ballmer suggested that some business customers would embrace the operating system immediately upon its release, but that others would likely deploy on a more piecemeal basis.

For the fourth quarter of fiscal 2009, Microsoft reported a 17 percent decline in year-over-year revenue, with earnings of $13.10 billion that came in $1 billion below Wall Street estimates. In an effort to reverse that trend, Redmond has been heavily promoting Windows 7, Office 2010 and other new versions of its flagship products as must-haves for both businesses and consumers.

In order to increase the appeal of Windows 7 adoption to the enterprise, Microsoft even took the step of offering Windows 7 Enterprise in a free 90-day trial edition. Analyst thoughts on whether businesses will rapidly adopt the operating system skew in both directions; a July report by Deutsche Bank found that Windows 7 would indeed encourage quick adoption and an accompanying mass tech refresh, while another survey by ScriptLogic found that many companies will wait until later in 2010 to adopt.

During Microsoft's annual Financial Analyst Meeting on July 30, Ballmer hit a note of cautious optimism about Windows 7 adoption rates.

"It's the middle of a down economy," Ballmer told the gathered analysts. "I'm not going to sit here and give you a one-year optimistic guidance. I'm just not going to do it. But it's not that I'm not optimistic."

But during a July 14 speech in New Orleans, Ballmer said that businesses upgrading their systems would be inevitable:

""What if the economy doesn't pick up again in seven years-do you think there would be an economic refresh cycle in the next seven years? Even if you take the assumption that it won't turn around for a long period of time, every minute of every day we're building a pent-up demand for IT.""

For Microsoft, the question may well become whether businesses will choose to exercise that pent-up demand upon the launch of Windows 7, or wait until a later, less economically perilous date.