Microsoft Windows 7 & SMBs - Speeding Up Adoption Rates

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 prerequisite
Spiceworks Voice of IT™:
• IT professionals at the smallest firms (<20) are most aggressive in their upgrade plans
IT Pros Know
Over 40% plan to start upgrading within the first 90 days post-launch
The information contained in this
• North America and Asia/Pacific countries are most aggressively upgrading
report represents sample data
Planned initiation of adoption within first 90 days is 15% higher than EMEA and LA/SA
from the more than 850,000 IT
professionals globally, across 196 • By end of the first year, a 14% increase in computers running Windows 7 (versus
countries who use Spiceworks to original plans) is expected
manage IT networks at their 45% of Windows 7 installs will occur on new computers, significantly driving new hardware
companies. purchases

2. Upgrade Speed
Ready, Set, Go…
The first part of the Spiceworks Voice of IT
study focused on what SMB IT professionals’
upgrade plans were, and how those plans
have changed since Windows 7 launched.
Overall, SMB IT professionals are
accelerating their Windows 7 upgrade plans.
Twenty percent of SMB IT professionals
report that they have decided to speed up
initiation of their upgrade Figure 1: Change in speed of upgrade to Windows 7 as
plans as compared to measured before and after launch
25%
prior to launch. This is
double the rate of SMB IT
20%
professionals who have
since determined to slow
down their upgrade plans 13%
(see Figure 1). 9%
Plans to start upgrading
to Windows 7
‘immediately’, increased 0%
by 10% post-launch. Upgrade faster than plans before Upgrade slower than plans before
launch launch
SMB IT professionals
planning to wait 90 days to one year before starting decreased by 12% (see Figure 2). This indicates that the
SMB 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. SMB IT professionals
are accelerating their
plans to start
upgrading to
Windows 7
SMB IT professionals planning to start upgrading to Windows 7 showed a significant increase at
the 90-day post-launch delineation point. Measured before launch, 34% of SMB IT
professionals stated they planned to start their upgrade within the first 90 days. When asked
post-launch, the rate jumped to 48% (see Figure 3). As noted earlier, the largest single
increase 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 to
start 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%
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4. Pockets of Strength
Big 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 most
100 - 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% of
SMBs in Europe/Middle East/Africa (EMEA) and Latin American/South America (LA/SA )plan to upgrade to
Windows 7. This compares to 72% in Asia/Pacific (APAC )and North America (NA) (see Figure 85). In order
to better explain the regional variations, more research about these differences is being considered.
4

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 a
company have already been upgraded to Windows 7. Ongoing upgrade plans reflect an intent
to have approximately 37% of systems on Windows 7 within the first six months, and nearly
50% by the first year. This increased aggressiveness equates to an intent by SMB IT
professionals to have 14% more of their systems on Windows 7 at the one year mark as
compared 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).
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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 12
month mark. It represents a 19% increase at the six month point. This could have a significant impact on
Microsoft 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 Launch
As would be expected, SMB IT professionals who state they are
Those moving faster will
upgrading faster, also plan to upgrade more of their computers
to Windows 7. This inclination is evident across all time series also upgrade more of their
measurement points. The increase as compared to plans
computers to Windows 7
before 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%
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7. Windows 7 will be a
significant driver of
new hardware
purchases
Upgrade Path
Hasta la Vista
The second part of the Spiceworks Voice of IT study focused on how SMB IT professionals will
upgrade. The findings suggests that Windows 7 will be a significant driver of new hardware
purchases. Forty-five percent of Windows 7 installs will occur on new computers, while 55% of
the installs will occur on existing computers (see Figure 7). Older computers will be
decommissioned and replaced, or left ‘as is’ (no upgrade) until they reach their end of useful life
and are replaced at that time.
Figure 7: How plan to upgrade to Windows 7
45%
55%
Upgrade Existing Machines
Replace Machines
Computers currently running Vista are twice as likely to be kept and migrated to Windows 7
than older Microsoft operating systems (see Figure 8). Older computers are more likely to be
decommissioned and replaced, or left ‘as is’ on older operating systems until they reach their
end of useful life and are replaced. Seventy-eight percent of SMB IT professionals plan to
upgrade existing computers currently on Vista, versus only 43% of computers on other
Microsoft operating systems.
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8. Figure 8: Intent for upgrading existing computers to Windows 7
from …
100%
Computers on
78%
75% Vista are nearly
twice as likely
50% 43% to be kept and
migrated to
25%
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
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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 of
100-249 employees say they will replace their existing computers. The largest companies
surveyed are divided among the methods (upgrade, replace, both), most likely because of the
various 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 Replace
It makes sense that Vista computers are better candidates for upgrades versus replacement as
they are less likely to be at the end (or near the end) of their useful life. Small businesses have
nearly 12% of their computers on Vista. This compares to a 3% average across all business
sizes (see Figure 11). Thus, the increased ‘upgrade existing computers’ rate by SMB IT
professionals may reflect these different operating system penetration rates.
9

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 quickly
Comparing groups that have diverged in the speediness of their upgrade plans since Windows 7 has launched
provides some interesting insights. When grouping SMB IT professionals whose upgrade plans have
remained the same, with those who plan to move faster, 82% report that they will upgrade Vista computers to
Windows 7. This compares to only 44% of SMB IT professionals whose plans are slowing down now that
Windows 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
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11. Reasons for Upgrading
Go Speed Racer
The final part of the Spiceworks Voice of IT study investigated why SMB IT professionals will
upgrade 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 IT
professionals 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 Launch
Comparing 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 upgrading
within 90 days of release, cite speed as a reason, versus only 48% for late adopters, defined as
SMB IT professionals who will start upgrading later than 90 days but within two years (see
Figure 14). This twenty-two percentage point difference equates to a 45% increase among
early adopters recognizing the improved speed of Windows 7 as a primary driver for upgrading.
11

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 Adopters
citing improved speed
are strongly
correlated 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 Manageability
Early Adopters 70% 60% 59% 57%
Late Adopters 48% 44% 46% 42%
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13. IT professionals at small businesses select security (58%) almost as often as speed (64%), as a
reason 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 a
switch from their current OS are the top three reasons, at 73%, 69% and 57% respectively.
Switching from their current OS experienced the
largest increase: 3% versus baseline
established before Windows 7 launch.
With the significant difference speed
represents as a reason to upgrade across
all respondent subsets, one hypothesis is
that SMB IT professionals who select speed
as a key reason for upgrade have higher
installation rates of Vista within their networks. Further research is being considered to test this.
Reasons for Postponing or Not
Upgrading
Whoa, Nelly…
The primary reason cited for not upgrading is more often a cost/benefit reason, 48%, than a
hardware or software compatibility reason, 32% (see Figure 15). Rates between SMB IT
professionals who will postpone upgrading versus those who have no plans to upgrade find that
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14. the two groups share similar reasons. Only among SMB IT professionals who are late adopters is it seen that
there is a higher likelihood to be concerned about hardware compatibility (29%) than among those with no
plans 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 don't 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%
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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
software
report that they are primarily concerned about software compatibility. These 9% of SMB IT
professionals 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 plans
whatsoever, while 33% say they will upgrade when Microsoft no longer supports their current
operating system. Thus, there will be a 10% increase in upgrade candidates primarily when
Microsoft’s XP operating systems require Extended Support contracts.
Background &
Methodology
Putting IT all Together
The Spiceworks Voice of IT™ Market Research Program publishes data collected from a panel
of IT technology professionals that are among the 850,000 users of the free Spiceworks IT
Desktop.
15

16. To measure Windows 7 adoption plans, two online
surveys were administered to the Spiceworks Voice of
IT™ panel members. The first survey, administered
during the first two weeks of October 2009, measured
testing and adoption intent leading up to Windows 7
launch. The second survey, administered the last two
weeks of November 2009, measured adoption intent
post Windows 7 launch.
Respondent Profiles
Making IT Representative
More than 1,500 IT professionals participated.
Responses were collected from more than 85 countries
across the globe. Forty-four percent of respondents are
from NA, while 30% are from EMEA. APAC countries
represent 21% of the respondents, with LA/SA making up
the 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 of
respondents come from companies with more than 250 employees.
16

17. Globally, ~60% of
computer systems are
deployed in
businesses with
fewer than 100
Fifty-five percent of Figure 17: Number of total employees
employees at company (Estimates based on IDC, Gartner data)
respondents have six or more
servers in their network, with
19% having more than twenty
20%
servers (see Figure 18). On
average each IT professional
who responded to this survey 80%
has twelve servers in their
100 or Fewer
network. More than 100
With nearly 60% of all
desktops and laptops
deployed in companies with fewer than 100 employees, this market is a significant driver of
revenue for technology companies.
Figure 18: Number of servers
on 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 that
the product is on the market. In addition, upgrade plans are significantly stronger than seen
with both XP and Vista post their launches.
17

18. Additionally, SMB IT professionals plan to upgrade to Windows 7 faster than their original plans
indicated before the product launched. This indicates the Service Pack 1 (SP1) sales barrier
will not be as important for
Windows 7 as prior operating
system launches.
The next six to twelve months
show signs of potential strength for
Microsoft and hardware
manufacturers. Microsoft direct
sales will be robust, with 55% of
computers targeted for Windows 7
installation. Sales through
hardware manufacturers will be
strong as IT professionals scale
to have nearly 50% of all systems on Windows 7 one year post-launch, and as older computers
are 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 medium
business technology professionals that are among the 850,000 users of the free Spiceworks IT Desktop. Survey
panelists opt-in to answer questions on technology trends important to small and medium businesses.
For more information visit http://www.spiceworks.com/voice-of-it. To receive updates on future research, follow
Spiceworks Voice of IT™ on Twitter at http://www.twitter.com/VoiceOfIT or @VoiceOfIT, and sign up for Spiceworks
Voice of IT™ research e-mails at marketresearch@spiceworks.com.
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