The computer industry will make billions of dollars when Microsoft's Longhorn operating system hits the market, Will Poole, the company's senior vice president for the Windows Client Business told delegates at WinHEC in Seattle.

Microsoft plans to launch Longhorn by the end of 2006.

"It is not hard to imagine that the excitement around the Longhorn wave will be causing a lot of people to replace systems that they would not have [replaced] otherwise," said Poole.

Longhorn promises improvements in notebook features, such as synchronisation technology and easier setup of wireless networks.

But the software also offers new functionality for desktop users, such as improvements in security and the ability more easily to hook up a PC to a high definition television.

However, vnunet.com learned today that Microsoft has further watered down the Next Generation Secure Computing Base technology that will ship with Longhorn.

If five per cent of consumers decide to replace their desktops one month earlier than they would have done otherwise, this would lead to $1.4bn in increased revenue, Microsoft promised.

But the most money will be made from enterprise customers, according to Poole. Longhorn promises enterprises a 25 per cent decrease in the cost of managing a PC.

It also aims to increase worker productivity through the adoption of visual information management, allowing users more easily to retrieve and organise the information on their computers.

Enterprises currently stick to their systems for five years, replacing on average 20 per cent per year.

"If that changes to 22 per cent per year, that's a $1.7bn opportunity in 2007 alone as a result of the increased productivity and security. That is something they want to spend money on a little bit faster," said Poole.