The Vista effect
For every $1 spent on Microsoft's new operating system, businesses and consumers will spend $9.33 on hardware $5.35 on software $3.93 on service providers
On the eve of the formal rollout of Vista, the first version of Windows released in six years, a study commissioned by Microsoft Corp. is predicting the company's new computer operating system will boost business activity in the Massachusetts high-tech sector.
The white paper, prepared by Framingham research firm International Data Corp. and set to be made public just before Microsoft sponsors a Vista launch event in Massachusetts on Wednesday , says the operating system will drive revenue and growth for more than 6,500 computer hardware, software, service, and consulting firms in the state.
Companies writing software programs to run on Vista, selling Vista-powered desktop computers to businesses or personal computers to consumers, and training organizations in how to take advantage of Vista's features will ring up over $2 billion in Vista-related sales and generate as many as 3,500 new jobs in Massachusetts in the first year after the operating system's introduction, the IDC paper forecasts.
Vista, which is being marketed as an advance in everything from its graphical user interface to its security features, "will infuse new energy into the market in its first 12 months of shipment, driving job growth, tax receipts, and new industry revenue," the white paper says.
The report represents an effort by Microsoft to identify the Massachusetts ecosystem revolving around its ubiquitous operating systems and gauge the "Windows Vista bounce" in a technology-savvy state where a network of software developers builds Windows-based business applications, but where Windows alternatives such as the Macintosh and the free Linux operating systems also are popular.
"Half of all software that will be purchased in 2007 will run on a Microsoft operating system," said IDC chief research officer John F. Gantz , who led the Vista study. "So when Microsoft changes its operating system, it has an impact throughout the ecosystem."
Michael Oh , founder of TechSuperpowers, an Apple computer reseller in Boston, agreed the introduction of a new Microsoft operating system creates a ripple effect through the high-tech economy, but he said the numbers presented in the IDC report seem high. While it will benefit hardware, software, and service companies, Vista also will impose a cost on businesses that purchase it, Oh said, suggesting many will have to buy new computers or add memory and video cards to existing ones to accommodate the more powerful operating system.
Some may also have to upgrade their business software so it will run on Vista, said Oh. "From a small-business perspective, they'll have to evaluate whether they want to make these purchases," he said. "Vista's sort of forcing their hand on when they do their upgrades."
Indeed, the IDC report cites computer sales and upgrades as one measure of Vista's impact. Within the first year after it's shipped, Vista is projected to be installed on more than 90 million computers worldwide, including more than a million in Massachusetts, it estimates.
Microsoft's "partner" companies in the state, which together employ about 120,000 workers, can be expected to add nearly 5,000 jobs in the coming year -- including 3,500 directly related to Vista -- IDC's analysts suggested. Those companies figure to sell more than $2 billion in Vista-related products and services this year, they said.
For business software companies, "it's a chance to refresh and update and improve security on their applications and go back to the market with versions that can run on Vista and take advantage of the new features," Gantz said. "It's time to shine them up and go sell them."
In the Bay State, for every dollar in Microsoft sales of Vista in 2007, its partners will sell $18.61 in products and services, the IDC report calculates. That includes $9.33 for hardware companies, $5.35 for software firms, and $3.93 for service providers, the report says.
Massachusetts was seen as a good state in which to study the impact of Vista, and the reach of the Microsoft partner network, because it has higher-than-average technology employment, with one in 10 workers holding an information technology job, said Ted MacLean , the Waltham-based Microsoft general manager for New England. The state ranks second nationally in venture capital investment, he said.
Already, companies in Massachusetts have invested $400 million to retool and adapt their products and services to ride the Vista wave, MacLean said. "That shows that our partners are taking the opportunity very seriously and see a great potential benefit," he said.
Even before the formal Vista launch, Microsoft began shipping the operating system to business customers about six weeks ago, and sales have been brisker than anticipated, MacLean said. Over the coming year, he said, "we expect a faster than usual uptake -- good consumer adoption plus a robust corporate uptake" for Vista.
EMC Corp., the Hopkinton data storage company that has been expanding into software, services, and consulting, will deploy technology teams to help businesses -- from small 10-person offices to mid-size manufacturing concerns -- capitalize on new productivity features in Vista and Microsoft's new Office software.
"Vista reflects the way people will work with information this decade," said Chuck Hollis , the EMC vice president of technology alliances, citing the new operating system's powerful capabilities for searching, combining data, and sharing it with other workers. "If we're all going to be knowledge workers, this will be the platform of choice."
Hollis said EMC is hiring an unspecified number of employees in Massachusetts and elsewhere for its global services division, which is expanding its consulting practice for the Vista introduction. "The real growth is in consulting, helping our customers figure out how to use Vista, which features are relevant to their business," Hollis said. "That's where we've been hiring like crazy."
Robert Weisman can be reached at weisman@globe.com. 