Microsoft-commissioned research into the economic impact of Windows 7, its new operating system, estimates that for every €1 of Microsoft revenue in the European Union Economic Zone until the end of next year from the product, the 'ecosystem' beyond the company will reap €19.06, Microsoft Malta country manager Pierre Mallia told The Sunday Times.
In just over 14 months, the companies in the Microsoft ecosystem in the EUEZ are expected to invest over €25 billion in developing, marketing, and supporting products and services built around Windows 7.
Global market intelligence firm IDC has forecast that over 50 million copies of Windows 7 will be distributed throughout the EUEZ by the end of next year. Over 177 million will be shipped worldwide within that timeframe.
The world's largest software company launched the much-vaunted Windows 7 worldwide last Thursday to markedly better reviews than those that greeted Windows Vista four years ago.
In Malta, the new operating system received a soft in-store launch last week. The official launch will be held on December 2. According to Mr Mallia, a Malta-based igaming company is "running heavily" on Windows 7 and some local companies already use it.
Ten countries were singled out for this research project: the Czech Republic, Denmark, France, Germany, Hungary, Italy, the Netherlands, Poland, Spain and the UK. The remaining 20 forming part of the EUEZ, including Malta, were grouped into a single pool.
The report claims the employment, revenue and investment in IT ecosystems from Windows 7 will help the IT industry assist economies in the region to climb out of the current economic crisis and build long-term growth. It admits that the increases this year will be "modest" as Windows 7 ships into a relatively harsh environment.
IDC forecasts IT spending in the EUEZ in 2010 will reach €331 billion, up two per cent from 2009, and packaged software spending will climb two per cent to €67 billion. Hardware spending will remain unchanged at €104 billion, while services spending will increase two per cent to €160 billion.
By the end of next year, Windows 7-related employment will account for more than 1.5 million jobs (18 per cent of all IT employment) in the EUEZ IT industry: nearly 100,000 in hardware companies, almost 80,000 in software companies, more than 440,000 in services and channel companies, and over 900,000 in IT-using organisations.
The report says that with most governments seeking to stimulate their economies to grow in the midst of an economic crisis, the launch of a major new operating system should be considered good news - a stimulus package in its own right.
"With new technology comes the ability to deliver new services, whether you are in tourism, manufacturing, or services," said Mr Mallia, who has been using Windows 7 for a year. "The launch of Windows 7 will trigger off new services and new work for people in IT. It will require people to undergo new training. The report says Windows 7 will generate over $19 billion in tax revenue in the coming years. Many companies are still running a technology that is now around nine years old and the next natural step is to move to Windows 7."
Windows is Microsoft's core product - the PC operating system accounts for 42 per cent of its earnings - and industry analysts believe Microsoft is looking to Windows 7 to retake ground lost to rivals Apple and Google, and to redeem itself after the debacle of Windows Vista.
Vista's predecessor XP was launched in 2001 and Mr Mallia explained there were some issues with the operating system "not because XP was a bad product but because there were problems with viruses and worms".
Microsoft, he pointed out, used to ship a product and allow end users to make it as secure as they liked. Vista, in turn, took security almost to an extreme, which irritated users. Mr Mallia admitted that in trying to make a quantum leap in technology, Microsoft was late to market, with components like drivers for scanners which gave people "some headaches". These issues have now been ironed out, he said.
Windows 7, Mr Mallia pointed out, takes matters to a whole new level and has been designed with a very different world in mind.
"There is more inclination today for the use of online services than five or six years ago," he said. "Windows 7 was designed with social trends in mind and it can run comfortably on netbooks. In the 1990s, there was always competition from Apple, which has very good products but has a very different vertically integrated model. One of the basic strengths that Microsoft has is the ecosystem of other IT companies that develop software on our platform. In Europe alone, we have around 100,000 companies that develop and produce products on a Microsoft platform."
He explained that Windows 7 features in-built functionality to support 'legacy applications' which were designed to support the XP platform, something that was not well supported by Vista. The new operating system will allow people to continue to run long-standing applications.
Windows 7, he adds, boasts remarkable speed, with 30-second boot-up time, much approved usability, and an easy-to-use interface which is simpler to navigate than XP and Vista.
"There is an 'out of the box' integration of services - Mesh, Hotmail, Messenger. It is one of our products' key strengths: their integration across a spectrum of devices that you might use, even X-Box. And its security is much better. It is a vast improvement on its predecessor."
Microsoft, Mr Mallia added, fed on innovation, with a $9 billion annual spend on re-search and development - more than any other vendor in the market and even more than the collective income of some competitors.
"Operating systems are a big chunk of our business," Mr Mallia said. "We have operating systems for phones, for embedded devices, and also for servers. We are innovating across the board. We have launched the new generation of operating systems systems, Window Azure, which is designed for cloud computing, which is already creeping into our daily lives."
Mr Mallia conceded that this year there were visible cuts in tech spending at consumer levels but Microsoft expected sales to pick up in late 2010. Windows 7 will help reinvigorate spend and the industry, with new types of applications and software, besides upgrades, being created for it - all new work for the IT sector and for companies internally.
Meanwhile, the overall feedback so far has been positive and the behaviour will be different this time around, Mr Mallia said.