Microsoft Windows 7 & SMBs - Speeding Up Adoption Rates


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Microsoft Windows 7 & SMBs - Speeding Up Adoption Rates

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Microsoft Windows 7 & SMBs - Speeding Up Adoption Rates

  1. 1. Microsoft Windows 7 & SMBs: Speeding Up Adoption Rates In this report Executive Summary P.1 Upgrade Speed P.2 Pockets of Strength P.4 Upgrade Plans & Timing P.5 Upgrade Path P.7 Reasons for Upgrading P.11 Reasons for Postponing or Not Upgrading P.13 Background & Methodology P.15 Respondent Profiles P.16 Conclusions P.17 Executive Summary SMBs More Aggressively Upgrading With the launch of Microsoft’s Windows 7 operating system, significant effort has been focused on trying to measure and determine planned adoption rates. Spiceworks, through its Voice of IT™ Market Research Program, has completed the largest pre- and post-launch comparative study to date about planned Windows 7 adoption. We’ve asked small and medium business IT professionals across the globe about their plans. Some significant findings from The Voice of IT™ study: • 20% of SMBs have accelerated their timetable for upgrading to Windows 7 SMB IT professionals are increasing adoption rates compared to their plans before launch • Plans to start upgrading immediately increased by 10% post-launch SMB IT professionals who might typically wait for Service Pack 1 before upgrading are not seeing that as a necessary prerequisiteSpiceworks Voice of IT™: • IT professionals at the smallest firms (<20) are most aggressive in their upgrade plansIT Pros Know Over 40% plan to start upgrading within the first 90 days post-launchThe information contained in this • North America and Asia/Pacific countries are most aggressively upgradingreport represents sample data Planned initiation of adoption within first 90 days is 15% higher than EMEA and LA/SAfrom the more than 850,000 ITprofessionals globally, across 196 • By end of the first year, a 14% increase in computers running Windows 7 (versuscountries who use Spiceworks to original plans) is expectedmanage IT networks at their 45% of Windows 7 installs will occur on new computers, significantly driving new hardwarecompanies. purchases
  2. 2. Upgrade SpeedReady, Set, Go…The first part of the Spiceworks Voice of ITstudy focused on what SMB IT professionals’upgrade plans were, and how those planshave changed since Windows 7 launched.Overall, SMB IT professionals areaccelerating their Windows 7 upgrade plans.Twenty percent of SMB IT professionalsreport that they have decided to speed upinitiation of their upgrade Figure 1: Change in speed of upgrade to Windows 7 asplans as compared to measured before and after launch 25%prior to launch. This isdouble the rate of SMB IT 20%professionals who havesince determined to slowdown their upgrade plans 13%(see Figure 1). 9%Plans to start upgradingto Windows 7‘immediately’, increased 0%by 10% post-launch. Upgrade faster than plans before Upgrade slower than plans before launch launchSMB IT professionalsplanning to wait 90 days to one year before starting decreased by 12% (see Figure 2). This indicates that theSMB IT professionals who typically wait for Service Pack 1 (SP1) before upgrading to a new Microsoft operating system are not seeing Figure 2: Percentage change in SMB IT professionals upgrade timetable that as a necessary prerequisite + 10% before beginning to upgrade. This increase in intent to adopt before SP1 seems to be a positive indication that Windows 7 adoption will be strong throughout 2010. - 12% 2
  3. 3. SMB IT professionals are accelerating their plans to start upgrading to Windows 7SMB IT professionals planning to start upgrading to Windows 7 showed a significant increase atthe 90-day post-launch delineation point. Measured before launch, 34% of SMB ITprofessionals stated they planned to start their upgrade within the first 90 days. When askedpost-launch, the rate jumped to 48% (see Figure 3). As noted earlier, the largest singleincrease is seen in SMB IT professionals who plan to begin upgrading their systems‘immediately’, which jumped to 26% (from 16% ) post-launch.SMB IT professionals whose plans, measured before launch, were to wait more than 90 days tostart their Windows 7 upgrade, declined 13% when measured after launch (see Figure 3). Figure 3: Intent to start upgrading to Windows 7 before or after the first 90 days post-launch as measured before and after launch Within 1st 90 days Before Launch: 34% After Launch: 48% + 41% + 14% Only after 1st 90 days Before Launch: 35% After Launch: 22% - 37% - 13% 3
  4. 4. Pockets of StrengthBig Things Come in Small Packages Among the 70% who plan to upgrade, businesses with fewer than 20 employees are most likely to upgrade within the first 90 days post-launch (see Figure 4). This difference is significant, as it is more than double the rate of other groups, and deviates from the traditional view of this group as market laggards. An adoption plan of over two years narrows these differences, with cumulative rates on initiation of Windows 7 upgrades ranging from 63% to 72% depending on company size. Figure 4: Intent to start upgrading to Windows 7 within the first 90 days post-launch as measured by company size IT 1 - 19 42% professionals at small 20 - 99 24% businesses are most100 - 249 22% aggressive in 250+ 28% their upgrade plans 0% 25% 50%Spanning the Globe…Another interesting finding is the difference in planned adoption among global regions. On average, 63% ofSMBs in Europe/Middle East/Africa (EMEA) and Latin American/South America (LA/SA )plan to upgrade toWindows 7. This compares to 72% in Asia/Pacific (APAC )and North America (NA) (see Figure 85). In orderto better explain the regional variations, more research about these differences is being considered. 4
  5. 5. Figure 5: Intent to start upgrading to Windows 7 within the first 90 days post-launch as measured by geographic region 73% 62% 71% 64% Plans for Windows 7 Upgrade upgrading to Windows 7 Plans & Timing surpass those Strength in Numbers seen with both As SMB IT professionals more aggressively prepare Vista & XP their networks for upgrades to Windows 7, they are testing applications for compatibility and upgrading memory on existing computers targeted for upgrade. Additionally, they are reviewing their licenses to determine best paths to upgrade: new licenses versus software assurance programs.As a result of these efforts, SMB IT professionals claim that nearly 13% of computers within acompany have already been upgraded to Windows 7. Ongoing upgrade plans reflect an intentto have approximately 37% of systems on Windows 7 within the first six months, and nearly50% by the first year. This increased aggressiveness equates to an intent by SMB ITprofessionals to have 14% more of their systems on Windows 7 at the one year mark ascompared to their original plans (see Figure 6).These rates are significantly higher than those seen with both XP and Vista post their launches(Vista Adoption Rate Predicted to Outpace Windows XP, PCWorld, Nov 2006). 5
  6. 6. Both the six month and one year data points indicate that SMB IT professionals plan to have approximately 6% more computers on Windows 7 than their original plans, as measured prior to launch (see Figure 6). As noted, this represents a 14% increase in systems targeted to be on Windows 7 at the 12month mark. It represents a 19% increase at the six month point. This could have a significant impact onMicrosoft revenues over the next year. Figure 6: Planned penetration rate of Windows 7 in company’s network over time 48% 50% 37% 13% 42% 25% 31% 1% 0% Today 6 Months 12 Months Before Launch After LaunchAs would be expected, SMB IT professionals who state they are Those moving faster willupgrading faster, also plan to upgrade more of their computersto Windows 7. This inclination is evident across all time series also upgrade more of theirmeasurement points. The increase as compared to plans computers to Windows 7before Windows 7 launched is more than 20% (see Table 1). Table 1: Planned penetration rate of Windows 7 in company’s network over time as measured by change in plans for upgrade rate Today 6 Months 12 Months 18 Months 24 Months Before Launch 1% 31% 42%% 55% 67% After Launch + More Aggressive 13% 37% 55% 66% 78% % Increase -- +19% +31% +20% +16% 6
  7. 7. Windows 7 will be a significant driver of new hardware purchasesUpgrade PathHasta la VistaThe second part of the Spiceworks Voice of IT study focused on how SMB IT professionals willupgrade. The findings suggests that Windows 7 will be a significant driver of new hardwarepurchases. Forty-five percent of Windows 7 installs will occur on new computers, while 55% ofthe installs will occur on existing computers (see Figure 7). Older computers will bedecommissioned and replaced, or left ‘as is’ (no upgrade) until they reach their end of useful lifeand are replaced at that time. Figure 7: How plan to upgrade to Windows 7 45% 55% Upgrade Existing Machines Replace MachinesComputers currently running Vista are twice as likely to be kept and migrated to Windows 7than older Microsoft operating systems (see Figure 8). Older computers are more likely to bedecommissioned and replaced, or left ‘as is’ on older operating systems until they reach theirend of useful life and are replaced. Seventy-eight percent of SMB IT professionals plan toupgrade existing computers currently on Vista, versus only 43% of computers on otherMicrosoft operating systems. 7
  8. 8. Figure 8: Intent for upgrading existing computers to Windows 7 from …100% Computers on 78%75% Vista are nearly twice as likely50% 43% to be kept and migrated to25% Windows 7 0% Vista Other Microsoft OS Given that more than 90% of Microsoft operating systems are still XP, it is important to highlight that just below half (48%) of SMB IT professionals across all companies will upgrade computers running XP. Computers on Vista, which are only 3% of the total operating systems, will be left ‘as is’ 14% of the time vs. decommissioned 3% of the time. This is most likely because computers running Vista are newer and not as close to their end of useful life. The plans for any computer not on Vista (the remaining 97% of total Microsoft operating systems) will be left ‘as is’ (no upgrade) or decommissioned at similar rates, approximately 27% and 23% respectively (see Figure 9). Figure 9: Intent for computers that will not be upgraded to Windows 7 50% 27% 25% 23% 14% 3% 0% Leave as is (no upgrade) Decommission & buy new Other Microsoft OS Vista 8
  9. 9. Over half of IT professionals at small businesses plan to only upgrade their existing computers(56%), rather than replace them with new computers (23%) or combine both approaches (21%).As businesses increase in size, SMB IT professionals are more likely to take the opposite route.Forty percent of IT professionals at companies with 20-99 employees, and 56% at companies of100-249 employees say they will replace their existing computers. The largest companiessurveyed are divided among the methods (upgrade, replace, both), most likely because of thevarious device ages and operating systems deployed in these networks (see Figure 10). Figure 10: How companies plan to upgrade to Windows 7 as measured by their size Small businesses 250+ 37% 33% 30% will be good for Microsoft business, 100 - 249 30% 15% 56% but not as nice for 20 - 99 35% 25% 40% hardware manufacturers 1 - 19 56% 21% 23% 0% 20% 40% 60% 80% 100% Upgrade Both ReplaceIt makes sense that Vista computers are better candidates for upgrades versus replacement asthey are less likely to be at the end (or near the end) of their useful life. Small businesses havenearly 12% of their computers on Vista. This compares to a 3% average across all businesssizes (see Figure 11). Thus, the increased ‘upgrade existing computers’ rate by SMB ITprofessionals may reflect these different operating system penetration rates. 9
  10. 10. Figure 11: Vista penetration rate as measured by company size 25% 12% 13% 3% 0% < 20 20 + SMB IT professionals’ intent is to upgrade from Vista to Windows 7 quicklyComparing groups that have diverged in the speediness of their upgrade plans since Windows 7 has launchedprovides some interesting insights. When grouping SMB IT professionals whose upgrade plans haveremained the same, with those who plan to move faster, 82% report that they will upgrade Vista computers toWindows 7. This compares to only 44% of SMB IT professionals whose plans are slowing down now thatWindows 7 has launched, an 86% difference between groups (see Figure 12). Figure 12: Intent to upgrade computers from Vista to Windows 7 as measured by change in plans for upgrade rate 100% 82% 75% 50% 44% 25% 0% Upgrade faster than or same as Upgrade slower than plans before plans before launch launch 10
  11. 11. Reasons for UpgradingGo Speed RacerThe final part of the Spiceworks Voice of IT study investigated why SMB IT professionals willupgrade or not. Given the perceived sluggishness of the Vista operating system, it is no surprise that speed is cited more often than the other reasons. For SMB IT professionals who plan to Windows 7 has upgrade, speed ranks first, followed overcome by security, user interface, and manageability. Sixty two percent of concerns about the IT professionals who plan to sluggish speed of upgrade cite speed as the primary Vista that is reason for their upgrade. This increases to 73% among those IT prevalent among ITprofessionals who are upgrading faster than their original plans (see Figure 13). professionals Figure 13: Improved speed of Windows 7 is a primary reason for upgrading, as measured before and after launch 73% After Launch 62% Before LaunchComparing early and late adopters, again the most significant difference for upgrading is speed.Seventy percent of early adopters, defined as SMB IT professionals who will start upgradingwithin 90 days of release, cite speed as a reason, versus only 48% for late adopters, defined asSMB IT professionals who will start upgrading later than 90 days but within two years (seeFigure 14). This twenty-two percentage point difference equates to a 45% increase amongearly adopters recognizing the improved speed of Windows 7 as a primary driver for upgrading. 11
  12. 12. Figure 14: Improved speed of Windows 7 is a primary reason for upgrading, as measured by early and late adoption intent Late Early Early adoption and Adopters Adoptersciting improved speed are stronglycorrelated reasons for upgrading The 70% of early adopters who state increased speed as a reason rank this factor significantly higher than all other reasons. Second through fourth are selected at similar rates, with user interface, security, and manageability at 60%, 59%, and 57% respectively (see Table 2). Among late adopters, no one category stands out from the others as a reason to upgrade. Most reasons to upgrade range between 42% and 48% (see Table 2). What is interesting to note is that when comparing early adopters to late adopters, IT professionals who are late adopters clearly do not see the benefits as strongly as early adopters in any category. Table 2: Primary reasons for upgrading as measured by early and late adoption intent Speed User Interface Security ManageabilityEarly Adopters 70% 60% 59% 57%Late Adopters 48% 44% 46% 42% 12
  13. 13. IT professionals at small businesses select security (58%) almost as often as speed (64%), as areason they are upgrading to Windows 7. For larger companies (250 or more employees),manageability (64%) becomes the number one reason to upgrade - a rate that is slightly higher Additionally,than speed, at 61% (see Table 3). there is a strong Table 3: Primary reasons for upgrading as measured by company size correlation Speed User Interface Security Manageability between citing 1-19 64% 55% 58% 50% improved speed and upgrading 20-99 54% 50% 44% 50% faster post- 100-249 47% 43% 48% 40% launch 250+ 61% 50% 54% 64%Among SMB IT professionals who plan to accelerate the upgrade, speed, user interface, and aswitch from their current OS are the top three reasons, at 73%, 69% and 57% respectively.Switching from their current OS experienced thelargest increase: 3% versus baselineestablished before Windows 7 launch.With the significant difference speedrepresents as a reason to upgrade acrossall respondent subsets, one hypothesis isthat SMB IT professionals who select speedas a key reason for upgrade have higherinstallation rates of Vista within their networks. Further research is being considered to test this.Reasons for Postponing or NotUpgradingWhoa, Nelly…The primary reason cited for not upgrading is more often a cost/benefit reason, 48%, than ahardware or software compatibility reason, 32% (see Figure 15). Rates between SMB ITprofessionals who will postpone upgrading versus those who have no plans to upgrade find that 13
  14. 14. the two groups share similar reasons. Only among SMB IT professionals who are late adopters is it seen thatthere is a higher likelihood to be concerned about hardware compatibility (29%) than among those with noplans to adopt (11%). Figure 15: Primary reason for postponing or not upgrading to Windows 7 75% 48% 50% 32% 25% 0% Cost / Benefit Reason Compatibility Concern Reasons selected for not upgrading reflect interesting differences in viewpoints along the cost/benefit continuum among geographic regions. North American IT professionals express more concern over cost (27%) than EMEA (13%) and APAC (18%). Conversely, 34% of EMEA IT professionals claim they dont see benefits in Windows 7, their primary reason for not upgrading (see Table 4). This latter EMEA rate is more than ten percentage points higher than cited by either North America or APAC IT professionals, a 41% difference. Table 4: Primary reasons for not upgrading as measured by geographic region North America EMEA APAC Cost/Benefit Cost 27% 13% 18% Benefit 22% 34% 24% Compatibility Hardware 9% 8% 21% Software 19% 21% 24% 14
  15. 15. IT professionals at companies with 20 to 99 employees are most likely to express cost/benefit concerns versus compatibility concerns, at 52% and 33% respectively. The gap is smaller among IT professionals at companies with more than 100 employees (50% versus 42%) and small businesses (44% versus 30%) (see Table 5). Out of the subset of SMB IT professionals who are decelerating their upgrade post-launch, 72% Table 5: Primary reason for postponing or not upgrading to Windows 7 as measured by company size A majority of SMB IT 1-19 20-99 100+ professionals cite concerns across the Cost/Benefit cost / benefit 44% 52% 50% continuum as opposed to concerns Compatibility 30% 33% 42% about compatibility of hardware or softwarereport that they are primarily concerned about software compatibility. These 9% of SMB ITprofessionals also cite migration hassles and hardware compatibility second and third at 50%each.Of the 30% of SMB IT professionals who don’t plan to upgrade, 66% report they have no planswhatsoever, while 33% say they will upgrade when Microsoft no longer supports their currentoperating system. Thus, there will be a 10% increase in upgrade candidates primarily whenMicrosoft’s XP operating systems require Extended Support contracts.Background &MethodologyPutting IT all TogetherThe Spiceworks Voice of IT™ Market Research Program publishes data collected from a panelof IT technology professionals that are among the 850,000 users of the free Spiceworks ITDesktop. 15
  16. 16. To measure Windows 7 adoption plans, two onlinesurveys were administered to the Spiceworks Voice ofIT™ panel members. The first survey, administeredduring the first two weeks of October 2009, measuredtesting and adoption intent leading up to Windows 7launch. The second survey, administered the last twoweeks of November 2009, measured adoption intentpost Windows 7 launch.Respondent ProfilesMaking IT RepresentativeMore than 1,500 IT professionals participated.Responses were collected from more than 85 countriesacross the globe. Forty-four percent of respondents arefrom NA, while 30% are from EMEA. APAC countriesrepresent 21% of the respondents, with LA/SA making upthe remaining five percent (see Figure 16). Figure 16: Business location by geographic region 5% 21% 44% NA EMEA APAC LASA 30%Eighty percent of respondents to the Windows 7 surveys are from companies with fewer than 100 employees.The remaining 20% represented companies greater than 100 employees (see Figure 17). Six percent ofrespondents come from companies with more than 250 employees. 16
  17. 17. Globally, ~60% of computer systems are deployed in businesses with fewer than 100Fifty-five percent of Figure 17: Number of total employees employees at company (Estimates based on IDC, Gartner data)respondents have six or moreservers in their network, with19% having more than twenty 20%servers (see Figure 18). Onaverage each IT professionalwho responded to this survey 80%has twelve servers in their 100 or Fewernetwork. More than 100With nearly 60% of alldesktops and laptopsdeployed in companies with fewer than 100 employees, this market is a significant driver ofrevenue for technology companies.Figure 18: Number of serverson the network Conclusions Keeping an 19% eye on IT SMB IT professionals are more 44% confident in Windows 7, and upgrading more aggressively 37% 1-6 to the new operating system 6-20 post-launch, with 71% of SMB >20 IT professionals planning to upgrade to Windows 7 now thatthe product is on the market. In addition, upgrade plans are significantly stronger than seenwith both XP and Vista post their launches. 17
  18. 18. Additionally, SMB IT professionals plan to upgrade to Windows 7 faster than their original plansindicated before the product launched. This indicates the Service Pack 1 (SP1) sales barrierwill not be as important forWindows 7 as prior operatingsystem launches.The next six to twelve monthsshow signs of potential strength forMicrosoft and hardwaremanufacturers. Microsoft directsales will be robust, with 55% ofcomputers targeted for Windows 7installation. Sales throughhardware manufacturers will bestrong as IT professionals scaleto have nearly 50% of all systems on Windows 7 one year post-launch, and as older computersare decommissioned and replaced.About The Spiceworks Voice of IT™The Spiceworks Voice of IT™ market research program publishes data collected from a panel of small and mediumbusiness technology professionals that are among the 850,000 users of the free Spiceworks IT Desktop. Surveypanelists opt-in to answer questions on technology trends important to small and medium businesses.For more information visit To receive updates on future research, followSpiceworks Voice of IT™ on Twitter at or @VoiceOfIT, and sign up for SpiceworksVoice of IT™ research e-mails at Notice The contents in this report are a result of primary research performed by Spiceworks. Unless otherwise noted, the entire contents distributed as part of this report are copyrighted by Spiceworks. As such any information made available by any means in this report may not be copied, reproduced, duplicated, published, displayed, transmitted, distributed, given, sold, traded, resold, marketed, offered for sale, modified to create derivative works or otherwise exploited for valuable consideration without prior written consent by Spiceworks. This report contains information of fact relating to parties other than Spiceworks. Although the information have been obtained from, and are based on sources that Spiceworks believes to be reliable, Spiceworks does not guarantee the accuracy, and any such information might be incomplete or condensed. Any estimates included in this report constitute Spiceworks’ judgment as of the date of compilation, and are subject to change without notice. This report is for information purposes only. All responsibility for any interpretations or actions based on the information or commentary contained within this report lie solely with the recipient. All rights reserved. 2009. For more information on this report or other services from Spiceworks please contact us at +1.512.346.7743 or e-mail us at 18