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Update Microsoft (MSFT)
10/07/2009 8:30 am EST
The software, a favorably reviewed replacement for Microsoft's widely reviled Vista operating system, goes on sale on October 22.
The pent up demand is potentially huge. Estimates say that 80% of the companies running their PCs on a Microsoft operating system never upgraded to Vista. Vista was introduced in 2007 and Windows XP goes back five years before that so these machines could be running software that's as much as seven years old.
And about 80% of companies say they plan to switch to Windows 7 in the next two years, according to ISI Group.
How much of that will be in the next year?
Goldman Sachs estimates that Microsoft's sales of the Windows operating system will climb 9% to $16.3 billion in 2010.
That doesn't seem huge until you remember that Windows sales are projected to decline 10% in 2009.
But even a 9% increase in sales will depend on a pick up in the sales of PCs themselves. Customers typically upgrade to a new operating system when they buy a new computer. So the question for Microsoft is when will corporate budgets include big numbers of new PCs?
Windows 7 could break the typical pattern for operating system sales, however. The software will run on older PCs and earlier test customers report that 60% of their existing software runs on Windows 7.
And then there are some new features that might give the software some buzz. It supports touch navigation, for example, so that users can control their software using their fingers.
In the end though, my guess is that neither those new features nor that backward compatibility are as important for the pace of Windows 7 sales as the speed of the economic recovery.
So it isn't so much when will customers buy Windows 7 but when will corporate customers feel like they can replace their aging fleets of PCs?
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