Update: Microsoft tries to dazzle EU with Vista's benefits

Microsoft tried to dazzle the antitrust regulators in Brussels on Thursday with new research that illustrates how immense the effect of Windows Vista will be next year on Europe's IT industry and the broader economy.

Microsoft warned earlier this week that the launch of Vista might be delayed in Europe because of the regulators' concerns about its impact on competition. On Thursday it used research conducted by IDC -- and sponsored by Microsoft -- to illustrate how much Vista is set to benefit Europe in terms of revenues and jobs next year.

Within a year of going on sale, IDC said, Windows Vista will be installed on more than 30 million computers in the six E.U. countries included in the study: Germany, France, the U.K., Spain, Poland, and Denmark. More than 100 million computers worldwide will run Vista within a year of its launch. The predictions come from a research paper titled "The economic impact of Microsoft Windows Vista."

Vista-related employment will account for more than 20 percent of all IT jobs within a year of its arrival, IDC predicted. That translates into around one million IT professionals in the six countries, including 100,000 new jobs by the end of 2007, assuming that Vista is launched on time at the beginning of next year.

The European Commission, Europe's top antitrust regulator, is concerned that new features planned for Vista, like its improved security software, will fall foul of the same antitrust rules the company was found guilty of breaching two and a half years ago with its bundling of Windows Media Player.

Jean-Philippe Courtois, president of Microsoft International, said the impact of Vista will be much greater than the direct benefits to Microsoft. "The economic opportunity Windows Vista creates for small and large companies across the region is clearly much more significant," he said at a press conference to unveil the study.

Some commentators saw the unveiling of the IDC research as a way of pressuring the Commission to back off. Last week, four members of the European Parliament wrote to competition commissioner Neelie Kroes warning her not to scupper the launch of Vista.

"It looks like operation shock and awe," said one person following Microsoft's antitrust travails in Europe, who asked not to be named. Microsoft is "losing the legal argument, so it's turning to political means to maintain its abusive monopoly," said the person, who is close to some of Microsoft's nearest competitors.

Gary Barnett, an industry analyst with Ovum, disputed that Microsoft is losing the legal battle. The company's appeal of the E.U. antitrust ruling has not been heard yet, he noted. And the daily fines that Microsoft faces for not being quick enough to comply with all aspects of the Commission's ruling have also not been adjudicated by a court, he said.

Any company that is being regulated by government is "entitled to make its case" in the form of such a study, Barnett said. He declined to comment on the figures in detail, having not seen IDC's full report, but said the estimated financial benefits "don't seem outrageous."

For every euro ($1.27) Microsoft generates in its own revenues from Vista, other firms in the six countries that are involved in distributing the OS, building applications for it or servicing computers using Vista will generate €14 ($17.76) in sales, IDC said.

These companies should sell "over €32 billion ($40.6 billion) in products and services revolving around Windows Vista," IDC said.

"Rapid and widespread adoption of Windows Vista means that its launch ... will have a pronounced positive impact on local economies throughout Europe," IDC said. The six countries in the study account for over 65 percent of all IT spending in the European Union, Croatia, Norway and Switzerland.

(IDC is owned by International Data Group, the parent company of IDG News Service.)

(James Niccolai in Paris contributed to this report.)