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Windows 7: Windows 7: Now it's an economic savior too

06 Jul 2009   #1

Windows 7 Ultimate x64, Mint 9
Windows 7: Now it's an economic savior too

Windows 7: Now it's an economic savior too

Expectations for Windows 7 may be getting a bit out of hand.
Itís one thing to expect Windows 7 to juice a PC upgrade cycle, Microsoftís earnings and tech industry growth. Itís quite another to think that Windows 7 is going to move the needle on gross domestic product.
Yes folks, Windows 7 is now an economic savior. No pressure there Steve Ballmer.
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In a Bloomberg Radio interview John Herrmann of economic research outfit Herrmann Forecasting was riffing on how GDP would bounce back in the second half even as consumers were savingónot spendingómoney. The radio host, Tom Keene, called it Herrmannís conundrum. For financial wonks the conversation was interesting fodder.

But my jaw dropped when Herrmann said a chunk of his GDP expectations for the second half was based on Windows 7. Microsoft will juice capital expenditures and thatíll propel GDP. I donít recall Herrmann putting a figure on Windows 7ólike itíll be responsible for 1 percent of GDP or anythingóbut the concept struck me as absolutely nuts.
Yes, consumers may go out and buy new PCs. Yes, companies that havenít upgraded PCs for five years are waiting for Windows 7. But címon. Is an operating system really going to move the U.S. economy? Perhaps itís time for a new mantra: Whatís good for Microsoft is good for the U.S.? After all, something has to replace GM in the slogan department.
The real news is that the launch of Windows 7 is clearly reaching its ridiculous expectations stage. Analysts have been arguing that Windows 7 will unleash pent-up hardware demand. For instance, Deutsche Bank analyst Todd Raker wrote in a research note:
This is the first OS that does not require higher end hardware and processors on the PC. This is significant as it will allow legacy Vista PCs to be upgraded to Windows 7. This should add $500m to $1b in incremental revenue if an additional 1%-2% of the installed base upgrades to Win 7 without purchasing new PCs. In addition, we believe the traditional hardware refresh cycle will be stronger than typical given the aging base of PCs and pent-up demand from lackluster Vista adoption. We estimate this will add $400m in revenue for Microsoft in F2010.
I agree with most of Rakerís take, but the U.S. has an annual GDP of $14.29 trillion, according to the CIA Factbook. Windows 7 will have to move a lot more than just a hardware cycle to move the U.S. economy. Now if Windows 7 can cure cancer too perhaps Herrmann has an argument.
Windows 7: Now it's an economic savior too | Between the Lines |

This is actually really funny.


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