Today’s release brags that Windows Vista will generate US$10 billion in new revenue for the California IT industry in 2007, and will drive 16,000 new jobs in the state. This is based on research from IDC, which was sponsored (read: paid for) by Microsoft. I wrote about one part of that research on Dec. 12.
For someone’s revenue to increase, of course, someone else’s costs have to go up.
Microsoft and IDC have previously released proportionally similar figures for Massachusetts, New York, New Jersey and Florida. It’s fair to expect more states to be “researched,” and their increased IT costs touted as a Windows Vista benefit.
Now, is this increased IT cost a good thing? I would argue that while it’s a huge plus for California’s IT industry, it’s a huge minus for the people of California, who are expected to fork out $10 billion and hire 16,000 people to handle the migration from one version of an operating system to another. (I’m focusing on California here, but my comments apply elsewhere.)
IDC’s figures include the cost not only of migrating the operating system itself, but also of developing and deploying software updates required for Windows Vista, upgrading or replacing hardware, and so-on. Firms providing those services include (to quote from the IDC report):
Microsoft partners and OEMs sell PCs and servers running Windows; software vendors write applications that run on Windows using Microsoft application development tools; retail outlets and resellers employ people to sell and distribute these products; and service firms install and manage Microsoft-based solutions, train consumers and businesses on Microsoft products, and service customers for their own applications.
According to IDC, this is terrific! To quote again,
This is good news for California. Over the next four years, software-related IT employment should grow by almost 150,000 jobs and be the sole reason IT-related jobs increase at all.
IDC says that in California alone, Microsoft will ship nearly 5 million copies of Windows Vista in 2007, and the company will make $500 million in this one state alone. Quoting IDC:
For every dollar of Microsoft revenue from Windows Vista in 2007 in California, the ecosystem beyond Microsoft will reap more than $19 in revenues. In 2007 this ecosystem should sell more than $10 billion in products and services revolving around Windows Vista.
To put it another way, it’s going to cost California’s businesses and consumers $500 million in Microsoft license fees to adopt Windows Vista. And it’s going to cost the state’s consumers $10 billion overall. And that’s good news?
This is good news for the IT industry, of course, and for IT professionals seeking employment. But it’s bad news for the people of California who aren’t in the IT industry, say, a dentist’s office, or a clothing manufacturer, or a school, or a restaurant chain, who will be footing the bill.
It’s hard to celebrate a software update when its creator boasts that it will increase the cost of IT. Isn’t newer technology supposed to save us money?