Research Alert: Microsoft’s Q409 Rollout: How Will This Impact IT Spending in 2010?

Microsoft is in the midst of unleashing a boatload of significant offerings and enhancements that could affect IT spending and how IT manages personal computing, Cloud-based services, and more. The next 30 to 60 days will see the formal rollouts of such significant Microsoft platform technologies as Azure and Windows 7 along with significant changes to existing applications and services such as Office 2010 and SharePoint 2010. With all of these comes an aggressive push by Microsoft to establish a software-plus-services future that could reshape not only Microsoft and its partners, but its customers and users as well.

Few IT vendors would attempt to roll out such a broad range of significant changes in core business, organization and technology in such a short period of time. Saugatuck believes the impact could easily reach well beyond Microsoft, its offerings, and its partners. In the end, it may trigger a significant change in IT spending, and as a result, catalyze and accelerate major change in how IT is bought, used and paid for.

The scale of that investment may be great enough to tip user organizations toward a much more rapid move to Cloud-based IT, including desktop virtualization, investment in netbooks and other new form factors, and a rapid move to SaaS, Cloud infrastructure services, and related Cloud Computing.

For partners, that investment is almost certain to include more and faster moves to expand their business to include SaaS and Cloud, which will require change well beyond adding a new offering or line of business, to include new business organizations, relationships, business models, etc.

Why is it Happening?

First: Microsoft is rolling out expanded versions of Office and SharePoint, and releasing Azure and related developments, because the market demands Cloud-based capabilities beyond what the company has traditionally offered. In our assessment, the development and change within Windows that resulted in Windows 7 was partly motivated by similar demands from users and partners regarding SaaS and Cloud – it wasn’t just a response to Vista being too bloated.

Meanwhile, Microsoft cannot unilaterally move to SaaS and the Cloud by waving a Software-plus-Services wand. There is a trillion-dollar ecosystem attached to Microsoft. Microsoft’s Fall 2009 Rollout of Azure, Windows 7, and SharePoint, are all pointed toward where the market wants to go – the Cloud; but there are legions of ISVs and channel partners to align with this new vision. That will take significant investment and cannot happen overnight.

Second: If we look at just one important aspect of Microsoft’s planned releases – Windows 7 – we can gauge some of the effect Microsoft will have on IT markets in 2010. According to several estimates by market analysts, globally there are approximately 1.2 billion PCs, including desktops, notebooks, and netbooks. The average PC is six years old and in need of upgrading, from OS to processor to hard drives. Of those 1.2 billion PCs, more than 90 percent run Windows, and about 80 percent of those run Windows XP or an earlier version.

Read the rest of this report at: http://datacentermarketplace.com/Default.aspx?tabid=574

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