September 14, 2006 12:27 PM PDT

Study: Vista could create 50,000 jobs in Europe

The launch of Windows Vista will create more than 50,000 technology jobs in six large European countries and will lead to a flood of economic benefits for companies there, according to a Microsoft-funded IDC study.

In "The Economic Impact of Microsoft Windows Vista," a white paper released on Thursday, IDC analysts emphasized that while Vista will earn Microsoft a great deal of money, far more will be generated by European companies within the Microsoft "ecosystem."

"If you add up all the spending on hardware and software that runs on Microsoft operating systems, as well as all the services around installing and maintaining Microsoft applications and solutions, you quickly come up with a number much bigger than Microsoft's revenues," IDC's John Gantz, Al Gillen and Marcel Warmerdam wrote in the study.

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In the six countries studied, more than 150,000 IT companies will produce, sell or distribute products or services running on Windows Vista in 2007 and will employ 400,000 people, IDC said. Another 650,000 will be employed in the IT departments of businesses that rely on Vista.

The study covers Germany, the U.K., France, Denmark, Poland and Spain, which collectively account for more than 65 percent of IT spending in the European economic zone (the EU, plus Croatia, Norway and Switzerland). "(These countries) are quite representative of Europe as a whole and, for that matter, much of the developed world," the IDC analysts wrote.

A key finding is that Vista will not just sustain the existing Windows economy, but create thousands of new jobs. Using a baseline for economic growth due to existing versions of Windows, the research firm determined that Windows-related employment would jump by 100,000 jobs next year.

"IDC believes that more than half of the gain in Windows-related employment will be specifically related to Windows Vista. It is growth that IDC believes would not occur were Windows Vista not in the market," the IDC analysts wrote. "Windows Vista...will infuse significant new energy into the market in its first 12 months of shipment, driving important job growth and new industry revenues."

Microsoft in hot seat
In recent years, Microsoft has funded a number of studies highlighting the positive side of its near-monopoly in the market for desktop operating systems (it faces significant competition on servers, notably from Linux). The studies have appeared as Microsoft has faced antitrust actions in the U.S., the EU and elsewhere, with regulatory attention most recently beginning to focus on Windows Vista ahead of its scheduled January launch.

Microsoft has also faced growing movements from some national and regional governments to promote or require open-source alternatives to Windows. One of the arguments governments have used in favor of open source is that it can foster a locally based software economy.

The IDC white paper outlines the immense local ecosystem derived from Windows in Europe.

Within the six countries, more than 20 percent of all IT employment will be Windows Vista-related in the first 12 months of deployment. That figure should grow substantially in 2008, when IDC expects Vista to account for 80 percent of Microsoft client operating systems shipped to enterprises. Thirty million computers in the six countries will run Vista in its first 12 months, and 105 million worldwide.

Moreover, for every euro of revenue that Microsoft makes, companies within the IT ecosystem will, on average, make more than 13 euros, IDC found. In the U.K., hardware companies are expected to see 7.24 euros of revenue, software companies 3.64 euros and services companies 2.74 euros per euro of Microsoft's Vista revenue, for a total of 13.62 euros.

According to Microsoft, that's not a bad payback for an investment that's such a modest part of companies' overall IT budgets--1 percent of the 214 billion euros the region will spend on IT in 2007 and roughly 5 percent of the packaged software spend.

"The economic opportunity Windows Vista creates for small and large companies across the region is clearly much more significant," said Jean-Philippe Courtois, president of Microsoft International.

European companies may not be directly involved in developing Vista, but they are participants nonetheless, IDC said.

"Windows Vista is not just a product of Microsoft. In the marketplace, it will be a constellation of solutions and services delivered by an entire ecosystem," according to the white paper. "The launch of Windows Vista will precipitate cascading economic benefits, from increased employment in the region and increased taxes to a stronger economic base for those 150,000+ local firms that will be selling and servicing products that run on Windows Vista."

Antitrust timing
Such benefits may help explain why it's only relatively recently that Microsoft has faced antitrust actions. "Microsoft does create economic opportunities, and that's probably why they didn't get slapped around by the Department of Justice sooner--it wasn't taking all the money for itself," RedMonk principal analyst James Governor said.

In 2000, the Department of Justice found that Windows was an illegal monopoly, and originally intended to break up the company. The European Commission in 2004 found that Microsoft had illegally used its Windows client monopoly to expand its market share in servers. Microsoft has not yet complied with all antitrust remedies, according to the Commission.

Some critics say that looking at jobs and economic growth doesn't tell the full story. For instance, a monopoly may create jobs, but can harm innovation, according to antitrust authorities. "If you want to foster a local product-based economy, there is certainly an argument that says it may not be beneficial if there are companies with aggressive policies that try to limit local companies' ability to grow and innovate," Governor said.

Open-source advocates, particularly in poorer countries, argue that dependence on Microsoft and other overseas-based, proprietary software companies may not allow the development of high-level IT skills in the local economy. That was the argument made in a famous open letter written to Microsoft by Peruvian congressman Edgar Villanueva in 2002.

"In respect of the jobs generated by proprietary software in countries like ours, these mainly concern technical tasks of little aggregate value," Villanueva wrote. In September 2005, Peru approved a Villanueva-sponsored bill promoting the use of open-source software by the government.

Matthew Broersma reported for ZDNet UK in London.

See more CNET content tagged:
employment, ecosystem, study, Microsoft Windows Vista, economy

24 comments

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50,000 jobs along with 5,000,000 sleepless nights...
for users and admins when their Vista boxes start behaving funny. Nice try Microsoft -;).
Posted by The_Nirvana (104 comments )
Reply Link Flag
what about TCO?
This can only make TCO higher.
Posted by aabcdefghij987654321 (1721 comments )
Reply Link Flag
TCO arguement shakey
Looks like their TCO argument is being disproved by another agenda
Posted by stevejobless (40 comments )
Link Flag
Vista is expensive and needs new hardware...
Was this even worth mentioning on news.com? Let me see - a biased survey (sponsored by Microsoft, so any claims of independence are dead in the water) says that Vista - which is under the magnifying glass of the EU at the moment - might create 50,000 jobs.

Well, Vista is bloatware requiring either hardware upgrades (more components sold = jobs!) or a replacement PC (more PCs sold = jobs!). Never mind all the extra accountants Microsoft will need to employ to count the insane profits they'll rake in for the overpriced OS itself.

Sadly, all Microsoft has to do is make sure that European PC OEMs are pressured into installing Vista by default on new PCs (e.g. threats to OEM volume discounts if they install no OS or an alternative OS) and the money will roll on.

Sadly, no major OEM has the guts to give their customers a choice of no OS, a non-MS OS (e.g. some Linux distro) or Windows on a typical desktop machine, so Windows just gets pushed out there *not* because it's the best OS, but because Microsoft has an entrenched monopoly position and vice-like grip on OEMs, who are scared witless of losing their discounts!
Posted by rklrkl (143 comments )
Reply Link Flag
Agreed
I would agree, since last year 80% of 10.5$ billion is revenue came from OEMs.
Posted by rmiecznik (224 comments )
Link Flag
Re: VISTA is expensive and needs new hardware...
I'd have to agree with you. How Microsoft has been allowed to pressure OEMs all these years and not get hammered by a multitude of governments is beyond me.

I mean I'm sorry. I feel Microsoft has some decent technology and some good points, but it shouldn't be forced down everybody's throats.

The fact that it requires new hardware certainly isn't something I'd brag about, either.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Link Flag
Ha!
Vista sucks so bad 50,000 more people are required to make sure it doesn't totally ruin everything.

MS software engineering at its finest.
Posted by qwerty75 (1164 comments )
Reply Link Flag
Deck Chairs on the Titanic
Like all corporate pro studies, it makes great wallpaper or window dressing, and is designed for the average 75 IQ computer intelligence level of most corporate boards and makes for moving deck around the deck of the Titanic.

The so called new jobs, are merely the existing ones reassigned, and glosses over the massive equipment and software upgrades costs etc!

But then again who really cares?, when the largest installed software desktop base is still actually Windows 2000!

Choices, to do or not to do, that be the question?
Posted by heystoopid (691 comments )
Reply Link Flag
NOT ONLY COULD "VISTA"....
... "create 50,000 jobs in Europe"; but, it could augment the use of state-of-the-art computing "analytical" tools to aid Europe (to travel at WARP SPEED) in remaining competitive against emerging countries such as China and Japan in the aerospace (AIRBUS, SUPERSONIC TRANSPORT...)and other industries. Which DUMMIES need VISTA anyway when the WEB "SERVICES" are the OPERATING SYSTEMS, APPLICATIONS and PROTOCOLS all assembled together for DECISION_MAKING! GEEEEE....ZZZZZZ.. GO INDIA AND CHINA, GO!
Posted by Captain_Spock (894 comments )
Reply Link Flag
50,000 hahahahahaha
Hahahahahahahahah

COught, cought, hahahahahahaha

MS just wants the EU to think that so they
pass Vista, and Rome maybe blsses it, I sincerely doubt there will be that many job created, this is FUD.
Posted by rmiecznik (224 comments )
Reply Link Flag
Hehe
I agree with you. Just wanted to correct you on Rome - the seat of the EU is in Brussels.
Posted by andrewholden (17 comments )
Link Flag
Sounds Like U.S. Prediction Re: NAFTA
Before NAFTA was passed we were told that it was going to be sooooo good for the American economy. Today, we have a trade DEFICIT with Mexico. So I should now believe yet another self-serving study. Sorry, but I gotta go now. I'm signing papers to buy the Brooklyn Bridge.
Posted by maxwis (141 comments )
Reply Link Flag
HERE IS A DEAL!
Before persons appear to be engaging in guessing games as to whether the Microsoft's sponsored study report that "Vista could create 50,000 jobs in Europe"; why not have independent studies (that could be "taken" to the BANK) by persons not connected with (or have an interest in either) the EU or the Microsoft Corporation. DUH!
Posted by Captain_Spock (894 comments )
Reply Link Flag
I Won't be Upgrading
MS has really started to become a joke. Vista is an albatross of a product. I'm still running Win2k, and just don't see any benefit whatsover to going to Vista. In fact, my next move might be to buy one of the intel based macs and install win2k on it.
Posted by R. U. Sirius (745 comments )
Reply Link Flag
50,000 jobs or 50,000 hours of work?
Lets see we will need people to work overtime to:

Upgrade to rediculous minimum requirements
Deal with bad drivers
Create workarounds for communication issues with other systems
Deal with bugs
Deal with worm to strike within 1st 2 weeks of release
Upgrade software that won't work

I dont see new jobs, just new hassles for IT staff
Posted by kaufmanmoore (42 comments )
Reply Link Flag
OH HECK! THIS IS JUST WHAT I MEANT.
Since you said; "I dont see new jobs, just new hassles for IT staff"; who ever said that the implementation of disruptive real-time collaborative computing in the context of the engineering economies of countries around the world (other than those in the EU) are dependant on decisions from the EU and you wish it to appear as if the rest of the world revolve around Europe. The attitude of some persons conveniently "acting" under the pretext of bouts of "amnesia" should not be an option/excuse/reason as to why a company like IBM moved its billion dollar computing laboratories out of Europe into the Indian Sub-Continent. What was it that imformed the judgement of the decision-makers in relation to the continuation of super-sonic flights around the world by European carriers??? Was it the question of the "economics" or was it not!; or, was it trial and error with Euro dollars involved. Just think in terms of how much EURO DOLLARS could have been saved if disruptive offerings that can come from VISTA and OFFICE were employed in the first instance for the logical "international project evaluation" that needed to be done! Do you know what is involved in carrying out such evaluations and what they will suggest? It is either you do know or you don't!
Posted by Captain_Spock (894 comments )
Reply Link Flag
Yes, and Hiroshima Created 6 Million New Jobs
. . . and, hey, never forget, that Hurricane Katrina provoked 400,000 housing starts!

Roberto

THE VISTAPOCALYPSE LOOMS!
Posted by Sumatra-Bosch (526 comments )
Reply Link Flag
Check your facts, dumb ass
Hiroshima deaths have been estimated anywhere between 70K and 200K. You are obviously referring to the Nazi orchestrated extermination of the Jewish people. A) You better check your facts, B) your choice of analogy is extremely offensive, and C) you're an idiot.
Posted by objectivist (1 comment )
Link Flag
Cnet loves Microsoft...
Am i crazy or could Microsoft sh@# on paper and Cnet would
praise a job well done?
Posted by Maguirre79 (2 comments )
Reply Link Flag
It happened...
You might be crazy, but if you are - you need a different symptom, this one doesn't prove it because:
- Microsoft already did;
- CNet reported it as "job well done"....

It happens about twice a year.
Posted by myszak (15 comments )
Link Flag
interesting numbers ..
"The launch of Windows Vista will create more than 50,000 technology jobs in six large European countries"
|
At an average salary of UK£30,000 that would mean Vista adding 1.5^52 or roughly UK£1.5 BILLION to the European economy. Thats US$2,823,734,500 DOLLARS. I don't think so.
|
"IDC believes that more than half of the gain in Windows-related employment will be specifically related to Windows Vista. It is growth that IDC believes would not occur were Windows Vista not in the market,"
|
I fail to see the logic. What will Vista bring to these companies that cannot be already done with Open Source solutions. Since when did an Operating System promote growth in an economy. For most companies its a negative on the balance sheet.
|
"Moreover, for every euro of revenue that Microsoft makes, companies within the IT ecosystem will, on average, make more than 13 euros, IDC found"
|
Does anyone really believe these numbers. Assuming a third party actually produces a big selling product. For each unit it sells it pays for another license. The revenue of which goes back up the pyramid.
|
Someone I know who produces drivers for medical diagnostic equipment tells me the company spends one fifth of its budget annually on software licenses alone. I asked why they don't move to Open Source. He replied that they were so tied to the one platform that it would be too disruptive to move. So here we have a company making vital strategic decisions based on what software vendor they buy from.
Posted by emacsuser (4 comments )
Reply Link Flag
That means 50,000 Jobs America doesn' t get
Thats a nice fat outsourcing number. 50,000 jobs that an international criminal monopoly gives to Europe, and not it's home country. Thats 50,000 jobs that America won't get.
Posted by Linux CloudRunner (4 comments )
Reply Link Flag
Vote Democrat in 2008!
Amen to that. Those jobs need to be in the U.S.! C'mon, our country is losing all the jobs due to outsourcing. Can't wait till '08 when we'll get a chance to put someone in office, hopefully a Democrat that can fix our budget problems. No matter what, Bill Clinton balanced the budget when he was in office. The current president hasn't. He's obsessed with Iraq. Al-Quida and bin Laden are more important in finding and bringing to justice than anything with Iraq. Whoops, this is a bit off topic or starting to get anyhow.
Posted by pentium4forever (192 comments )
Link Flag
Monopolies are good for you....
It's really interesting how many Microsoft funded "research papers" keep surfacing - all trying to sell various "benefits" of a monopoly, this
one concentrates on the European market; well - Europeans should know how it works, long practice, monopolies - usually state monopolies -
were used there to sell various goodies - from booze to matches; at some point whoever wanted to supply lighters would have to pay the local
match-monopoly to have his lighters "approved", just like the hardware vendors do today with their Windows drivers: they pay Microsoft to have
them "approved" - whatever that means. There was also a time when in Russia it was illegal to throw a drunk out of the bar, as long as he had
his shirt still on - and therefore could pawn it with the bartender to keep drinking and contributing to the well-being of the Russian Empire in the only way he knew how; only the shirtless drunks were - eventually - thrown into a snow bank. This enlightened system did not put undue strain of the upper body frostbite epidemic on the health system for the simple reason that a public health system did not exist in Russia at the time. It's a pity IDC was not around either, because if it was - we would most likely learn how beneficial to Russian economy the system was, how many bar tending jobs it created, how much extra business it driven for the booze distilleries, what were the benefits of second-hand shirt market it created, what were the direct and indirect benefits to doctors, healers, witch doctors and quacks... Unfortunately - without IDC study - we will probably never know...
Posted by myszak (15 comments )
Reply Link Flag
 

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