In this reportExecutive Summary

Upgrade Speed

Pockets of Strength

Upgrade Plans & Timing

Upgrade Path

Reasons for Upgrading

Reasons for Postponing or Not Upgrading

Background & Methodology

Respondent Profiles

Conclusions

Microsoft Windows 7 & SMBs:Speeding Up Adoption Rates

Executive Summary

Spiceworks Voice of IT™:

IT Pros Know

The information contained in this

report represents sample data

from the more than 850,000 IT

professionals globally, across 196

countries who use Spiceworks to

manage IT networks at their

companies.

SMBs More Aggressively UpgradingWith 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:

P.1

P.2

P.4

P.5

P.7

P.11

P.13

P.15

P.16

P.17

• 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

• IT professionals at the smallest firms (<20) are most aggressive in their upgrade plans

Over 40% plan to start upgrading within the first 90 days post-launch

• North America and Asia/Pacific countries are most aggressively upgrading

Planned initiation of adoption within first 90 days is 15% higher than EMEA and LA/SA

• By end of the first year, a 14% increase in computers running Windows 7 (versus

original plans) is expected

45% of Windows 7 installs will occur on new computers, significantly driving new hardware

purchases

+ 10%

- 12%

Upgrade Speed

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

that as a necessary prerequisite

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.

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

Figure 2: Percentage change in SMB IT

professionals upgrade timetable

initiation of their upgrade

plans as compared to

prior to launch. This is

double the rate of SMB IT

professionals who have

since determined to slow

down their upgrade plans

(see Figure 1).

Figure 1: Change in speed of upgrade to Windows 7 as

measured before and after launch

20%

9%

0%

13%

25%

Upgrade faster than plans before launch

Upgrade slower than plans before launch

Plans to start upgrading

to Windows 7

‘immediately’, increased

by 10% post-launch.

SMB IT professionals

2

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%

+ 14%

Only after 1st 90 days

Before Launch: 35%

After Launch: 22%

- 13%

+ 41%

- 37%

SMB IT professionals

are accelerating their

plans to start

upgrading to

Windows 7

3

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.

28%

22%

24%

42%

0% 25% 50%

250+

100 - 249

20 - 99

1 - 19

IT

professionals

at small

businesses

are most

aggressive in

their upgrade

plans

Figure 4: Intent to start upgrading to Windows 7 within the first 90

days post-launch as measured by company size

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 8\5). In order

to better explain the regional variations, more research about these differences is being considered.

4

73%

62%

64%

71%

Figure 5: Intent to start upgrading to Windows 7 within the first 90

days post-launch as measured by geographic region

Plans for

upgrading to

Windows 7

surpass those

seen with both

Vista & XP

Windows 7 Upgrade

Plans & Timing

Strength in NumbersAs SMB IT professionals more aggressively prepare

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).

5

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

Figure 6: Planned penetration rate of Windows 7 in company’s

network over time

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.

0%

25%

50%

Today

6 Months

12 Months

1%

31%42%

13%

37%48%

Before Launch After Launch

As would be expected, SMB IT professionals who state they are

upgrading faster, also plan to upgrade more of their computers

to Windows 7. This inclination is evident across all time series

measurement points. The increase as compared to plans

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

Aggressive13% 37% 55% 66% 78%

% Increase -- +19% +31% +20% +16%

Those moving faster will

also upgrade more of their

computers to Windows 7

6

Upgrade Path

55%

45%

Upgrade Existing Machines

Replace Machines

Figure 7: How plan to upgrade to Windows 7

Windows 7 will be a

significant driver of

new hardware

purchases

Hasta la VistaThe 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.

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.

7

Figure 8: Intent for upgrading existing computers to Windows 7

from …

78%

43%

0%

25%

50%

75%

100%

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).

Computers on

Vista are nearly

twice as likely

to be kept and

migrated to

Windows 7

27%23%

14%

3%

0%

25%

50%

Leave 'as is' (no upgrade) Decommission & buy new

Other Microsoft OS Vista

Figure 9: Intent for computers that will not be upgraded to

Windows 7

8

56%

35%

30%

37%

21%

25%

15%

33%

23%

40%

56%

30%

0% 20% 40% 60% 80% 100%

1 - 19

20 - 99

100 - 249

250+

Upgrade Both Replace

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 sizeSmall businesses

will be good for

Microsoft business,

but not as nice for

hardware

manufacturers

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

12%

3%

0%

13%

25%

< 20 20 +

Figure 11: Vista penetration rate as measured by company

size

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

82%

44%

0%

25%

50%

75%

100%

Upgrade faster than or same as plans before launch

Upgrade slower than plans before launch

SMB IT professionals’ intent is

to upgrade from Vista to

Windows 7 quickly

10

Reasons for Upgrading

surprise that speed is cited more

often than the other reasons. For

SMB IT professionals who plan to

upgrade, speed ranks first, followed

by security, user interface, and

manageability. Sixty two percent of

IT professionals who plan to

upgrade cite speed as the primary

reason for their upgrade. This

increases to 73% among those IT

Figure 13: Improved speed of Windows 7 is a primary reason for

upgrading, as measured before and after launch

Go Speed RacerThe 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

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.

Windows 7 has

overcome

concerns about the

sluggish speed of

Vista that is

prevalent among IT

professionals

Before Launch

After Launch62%

73%

professionals who are upgrading faster than their original plans (see Figure 13).

11

Figure 14: Improved speed of Windows 7 is a primary reason for

upgrading, as measured by early and late adoption intent

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.

Early adoption and

citing improved speed

are strongly

correlated reasons for

upgrading

Late Adopters

Early Adopters

Speed User Interface Security Manageability

Early Adopters 70% 60% 59% 57%

Late Adopters 48% 44% 46% 42%

Table 2: Primary reasons for upgrading as measured by early and

late adoption intent

12

Speed User Interface Security Manageability

1-19 64% 55% 58% 50%

20-99 54% 50% 44% 50%

100-249 47% 43% 48% 40%

250+ 61% 50% 54% 64%

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

than speed, at 61% (see Table 3).

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

Additionally,

there is a strong

correlation

between citing

improved speed

and upgrading

faster post-

launch

Table 3: Primary reasons for upgrading as measured by company size

installation rates of Vista within their networks. Further research is being considered to test this.

Reasons for Postponing or Not

UpgradingWhoa, 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

13

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%).

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.

48%

32%

0%

25%

50%

75%

Cost / Benefit Reason Compatibility Concern

Figure 15: Primary reason for postponing or not upgrading to

Windows 7

North America EMEA APAC

Cost/

Benefit

Cost 27% 13% 18%

Benefit 22% 34% 24%

Com

patibili

ty

Hardware 9% 8% 21%

Software 19% 21% 24%

Table 4: Primary reasons for not upgrading as measured by

geographic region

14

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%

A majority of SMB IT

professionals cite

concerns across the

cost / benefit

continuum as

opposed to concerns

about compatibility

of hardware or

software

Table 5: Primary reason for postponing or not upgrading to

Windows 7 as measured by company size

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.

1-19 20-99 100+

Co

st/

Ben

efit

44% 52% 50%

Com

patibili

ty

30% 33% 42%

Background &

Methodology

Putting IT all TogetherThe 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

44%

30%

21%

5%

NAEMEAAPACLASA

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 ProfilesMaking IT RepresentativeMore 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

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

Figure 18: Number of servers

on the network

Figure 17: Number of total

employees at company

Globally, ~60% of

computer systems are

deployed in

businesses with

fewer than 100

employees(Estimates based on IDC, Gartner data)

Fifty-five percent of

respondents have six or more

servers in their network, with

19% having more than twenty

servers (see Figure 18). On

average each IT professional

who responded to this survey

has twelve servers in their

network.

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.

44%

37%

19%

1-6

6-20

>20

80%

20%

100 or Fewer

More than 100

ConclusionsKeeping an

eye on ITSMB IT professionals are more

confident in Windows 7, and

upgrading more aggressively

to the new operating system

post-launch, with 71% of SMB

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

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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 marketresearch@spiceworks.com.

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.

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

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

to have nearly 50% of all systems on Windows 7 one year post-launch, and as older computers

are decommissioned and replaced.

18