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2/14/2014
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Microsoft Sells 200M Win 8 Licenses: Yawn

Microsoft touts sales of more than 200 million Win 8 licenses. Here are 5 reasons not to be impressed.

7 Mistakes Microsoft Made In 2013
7 Mistakes Microsoft Made In 2013
(Click image for larger view and slideshow.)

Microsoft sold more than 200 million Windows 8 and 8.1 licenses during the controversial OS's first 15 months, Tami Reller, the company's executive VP of marketing, revealed Thursday at a Goldman Sachs technology conference.

Sounds impressive, right? Not exactly.

Sure, 200 million is a big number -- that's about one license for every 35 people on the planet, a level of ubiquity most companies would kill for. But Microsoft isn't most companies. Put into historical or aspirational context, Windows 8 and 8.1 have underwhelmed.

Not convinced? Here are five reasons not to be impressed.

1. Windows 8 sales can't keep pace with Windows 7's precedent.
In January 2013, Reller, then CFO of the Windows division, said Windows 8 had sold more than 60 million licenses since launching the previous October. She said the pace roughly matched Windows 7's progress through the same period. In May, when Windows 8's license sales passed 100 million, Microsoft again said its new OS was performing comparably to Windows 7.

Microsoft's Windows 8 boasts have always been a bit suspect, but the company can no longer argue that Win 8 is selling as well as the previous version. Windows 7 license sales topped 240 million in the OS's first year of availability. In three more months, Windows 8 had moved only a little more than 80% as many licenses.

[Are Android apps coming to Windows? Read Microsoft's Windows Strategy Gets Muddy.]

2. Microsoft defines "sell" differently than most of us.
Microsoft's Windows figures refer to "sell-in" numbers, not "sell-through" numbers. Those 200 million Windows 8 and 8.1 licenses, in other words, derive from the volume sold to OEMs and retailers, not the number sold to actual end-users. The number of Windows 8 machines actually active in the wild is lower.

Microsoft's tally does not include volume licenses, such as those sold to enterprises. But analysts say volume deals have been sluggish, too.

Corporate Windows 8.1 uptake hasn't increased outside of isolated tablet projects, and even within mobility deployments, Windows 8 slates are activated less often than iPads, Forrester analyst David Johnson told InformationWeek last month. "Windows 8 and the enterprise aren't things you usually hear in the same sentence," said IDC analyst Al Gillen in a separate interview.

Microsoft's Windows 8 sales boast isn't as impressive as it might seem.
Microsoft's Windows 8 sales boast isn't as impressive as it might seem.

3. Some Windows 8 licenses are more valuable than others.
Windows 8 Pro launched at a promotional price of $39.99, but some Windows 7 users could purchase it for as little as $14.99. In February 2013, though, the Pro version jumped to $199.99, with the standard version coming in at only $80 less. Though Windows 8.1 was released last fall as a free upgrade to existing Windows 8 users, the $199.99 and $119.99 prices still stand for everyone else.

What's the takeaway? A lot of Windows 8 licenses were sold at a discount. In theory, this tactic shouldn't have hurt Microsoft's bottom line -- by sacrificing licensing revenue, the company hoped to encourage Windows 8 adoption and thus revenue for its new Modern UI app ecosystem. In practice, however, this hasn't worked out.

Here's part of the problem: Many early Windows 8 adopters installed the OS on older PCs that didn't have touchscreens and were ill-equipped for Win 8's touch-oriented Live Tiles. Win 8 also shackled the desktop with knuckleheaded UI changes such as the missing Start menu, which only exacerbated the issue.

Windows 8.1 was an attempt to assuage the user discontent that resulted from these problems, but the OS has mostly continued to flounder. Evidently aware that 8.1 wasn't enough, Microsoft is reportedly planning another Windows update to make its new UI friendlier to mouse-and-keyboard users.

4. Windows licenses don't drive device sales as they used to.
Reports last year claimed Microsoft offered OEMs cheaper Windows and Office licenses in exchange for ramped-up production of smaller Windows tablets. While such reports have never been verified, manufacturers have released a rash of Win 8.1 mini-slates in recent months, most of which come pre-loaded with Office. This suggests that just as Microsoft took an early hit with discounted Windows 8 licenses, the company might also have sacrificed upfront revenue to gain some of its more recent sales.

Regardless of behind-the-scenes negotiations between Microsoft and OEMs, many Windows 8 and 8.1 devices have sold well only following hefty price cuts. Microsoft presumably hopes these low-margin devices will eventually stimulate growth in more lucrative areas such as the Windows Store or Office 365 and other of the company's cloud-based services. But so far, much of Windows 8's modest momentum appears to have come at the cost of profit margins.

5. Windows 8 isn't popular on any form factor.
Microsoft apologists sometimes point out that Windows 8 was predestined to post lower sales numbers than Windows 7 because the latter had the benefit of following Windows Vista, whose infamous flop drove demand for a modern desktop OS. Some have also suggested Windows 8 adoption has been stunted by the slumping PC market. With more people using tablets, some older PCs aren't being replaced, and others are being pushed into longer lifecycles. Both trends, or so the arguments go, decrease demand for a new version of Windows.

While these arguments aren't completely invalid, they ignore an important point: Windows 8 was designed as both a tablet and desktop platform. If the OS had been more appealing, that should have insulated it from fluctuations in the traditional PC market.

Unfortunately for Microsoft, Windows 8.1 tablets are still living off Apple and Google's table scraps. A barrage of holiday sales might have helped Windows tablet makers move a few more units -- but they couldn't stop record iPad sales or the continuing proliferation of low-cost Android slates.

Even if the PC slump isn't Windows 8's fault, the OS clearly hasn't helped. In January, Windows 8 and 8.1 accounted for a measly 11.7% of all desktop users, according to Net Applications. Windows 7 runs on almost half of all desktops, and even Windows XP, which will lose support in less than 60 days, more than doubles Win 8/8.1's market share. More than 60% of Win 8/8.1 users are still running the earlier version, indicating that 8.1 hasn't done enough to motivate the market. To add insult to injury, HP has started selling Windows 7 PCs in a "back by popular demand" promo.

Put simply, Windows 8's failure is twofold: It isn't popular among Microsoft's legacy customers, and it isn't popular among the mobile-minded new generation of users.

Engage with Oracle president Mark Hurd, NFL CIO Michelle McKenna-Doyle, General Motors CIO Randy Mott, Box founder Aaron Levie, UPMC CIO Dan Drawbaugh, GE Power CIO Jim Fowler, and other leaders of the Digital Business movement at the InformationWeek Conference and Elite 100 Awards Ceremony, to be held in conjunction with Interop in Las Vegas, March 31 to April 1, 2014. See the full agenda here.

Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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Charlie Babcock
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Charlie Babcock,
User Rank: Author
2/14/2014 | 3:18:46 PM
Windows 8, a decked out legacy system
Good assessment, Michael. I've heard many explanations of why Windows 8 isn't selling beyond its captive OEM audience but the fact that it's a legacy end user system, decked out as a hipster, is the simplest. 
Laurianne McLaughlin
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Laurianne McLaughlin,
User Rank: Apprentice
2/15/2014 | 8:46:56 AM
Important context
Thanks for breaking down the context here, Michael. #2 is one that a lot of people don't mention when they throw around Windows numbers. Based on what we see on our site, many IT pros want to read about Windows 8 tablets, but few are buying yet. Any of you seeing many Win8 tablets in the wild in your enterprises?
awebb199
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awebb199,
User Rank: Strategist
2/15/2014 | 11:47:24 AM
100 million since may 2013
Windows 8.x has DOUBLED its share of desktop OS in use from around 5% 6 months ago to 10.58% now

#3 neglects to account for the 100 million well after the promotional period.   You can't denigrate the 100 million by claiming that they were discounted when the discount period had expired already.

it is neither a great success, nor a disaster; just a transitional product that needs more polishing.

The big question is will enterprise stop buying laptops and cell phones for employees and consolidate with a touch tablet that runs their existing software?  That decision is yet to be made.

 

 

 

 

 

 

 

 

 

 

 

 
moonwatcher
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moonwatcher,
User Rank: Strategist
2/15/2014 | 2:57:51 PM
Re: 100 million since may 2013
awebb, Your comments are well taken, but I wonder how many of those 100 million licenses were FORCED upon consumers instead of actually sought out by them? For instance, a year ago when I wanted to buy a new PC, a Dell XPS 8500, Dell would not sell it with Windows 7, so I was stuck with getting Windows 8 Pro, even though I wasn't very happy about that. But I needed a PC for working from home, so I HAD to buy one. Given the choice, I would have chosen Windows 7 Pro in a heartbeat. Months later, it made me mad to see Dell (and now HP and others) touting that you can still get Windows 7.

If I could downgrade for free I would. Many of us long term desktop users would consider it an upgrade.

 
awebb199
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awebb199,
User Rank: Strategist
2/15/2014 | 5:16:51 PM
Re: 100 million since may 2013
Try before you buy

Dell has an article on downgrading to Win7 for the 8500 if you like.  Search "dell How to Downgrade from Windows 8 Pro to Windows 7 Professional"

Or you do some of the fixes in information week make-windows-8-like-windows-7

Or you can just take the most used programs and pin them to the taskbar.

It was silly for Microsoft to break the way users interacted with Win7 just to promote the tiles interface especially on a machine which does not have touch anyhow.

HP was trying to ship systems with Win7 again, but I have not heard that it was a huge success.

Personally, I had bought a laptop withe Win7 and a free upgrade to Win 8.  I dual booted for a while before switching to Win 8 mostly because the boot up times are faster, and I wanted to be able to run both the old and new programs.
moonwatcher
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moonwatcher,
User Rank: Strategist
2/15/2014 | 6:31:34 PM
Re: 100 million since may 2013
awebb199, I did a search and yeah it can be done (downgrading to Windows 7 Pro), but it isn't cheap...too expensive...$290...from Dell...and you have to have the media installation discs. They won't sell them to you...Guess I'm stuck with Win 8.1 and whatever upgrades they do until Windows 9 comes out. Hopefully they'll cut people a deal if they upgrade to Windows 9 maybe for the same $39 they offered for Win 8. I hope so...

I had thought about upgrading a couple older Dell Windows XP PCs to Windows 7...but am now leaning toward putting Ubuntu on them and being done with it...I do wonder how vulnerable Windows XP will be after April 8th if I only used it for iTunes, maybe streaming MOG audio, and use Ubuntu for other web browsing in a dual boot mode...

The reason I want to keep using my old XP boxes is that much of the software (Roxio and Nero, and utilities I've come to know and love) won't run on the Win 8.1 box and I'm not crazy about buying upgrades at this point that are not *value added*.

Many consumers are in the same boat. Funny thing I've noticed is that the cost of Windows 7 Home Premium keeps going up the closer the date of Windows XP's demise gets....Was $89, now up to $92.

Thanks.

 
rradina
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rradina,
User Rank: Ninja
2/17/2014 | 8:40:04 AM
Re: 100 million since may 2013
Want a cheap solution?  Buy Start8 for $5 to get your start menu back.  Hate Metro?  Buy ModernMix from the same folks for another $5 so you can run modern apps in resizable desktop windows.  $10 sounds a lot better than $290 for Windows 7.
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 8:03:35 PM
Re: 100 million since may 2013
It sounds better to me, too. I'm surprised some of the workarounds haven't appeased more users. I know people increasingly expect things to "just work" out-of-box, but it's curious that some of the current solutions haven't caught on. It doesn't take a lot of time or expense to adjust the necessary settings and install the necessary apps. Makes you wonder about the alleged plans for Windows 9, since it will reportedly integrate some of the UI features the aforementioned apps already enable.
rradina
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rradina,
User Rank: Ninja
2/18/2014 | 8:45:58 AM
Re: 100 million since may 2013
Do you think the issue is awareness or cost?  

Once the special offer grace periods expire, most do not approve of Microsoft's upgrade fees.  A number of folks seem to refuse Windows 8 on the principle of not wanting to pay for an upgrade and then pay even more for a fix.
Brian.Dean
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Brian.Dean,
User Rank: Ninja
2/18/2014 | 4:41:43 PM
Re: 100 million since may 2013
The UI is a big issue. If Microsoft had gone with the model of conditioning users from a win7 UI to a win8 tile UI then it would have allowed them to gain some data on whether users actually wanted it, but the model was to hit everyone with an alien UI out of the box. After using a PC for so many years, I found it difficult to navigate.
rradina
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rradina,
User Rank: Ninja
2/18/2014 | 6:07:17 PM
Re: 100 million since may 2013
Regarding the work-arounds (Start8 and ModernMix), why haven't more folks customized their systems with these tools rather than dissing Win8 and searching for deals on Windows 7?  If one is sticking with Windows, Win8 fitted with these tools is as good or arguably better than Win7.  Some of the modern apps (for instance Netflix, some games, Kindle, Nook, etc.), are even good on touch-challenged desktops.
Brian.Dean
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Brian.Dean,
User Rank: Ninja
2/19/2014 | 12:52:06 PM
Re: 100 million since may 2013
I think on one level it shows that customers do not trust third party tools that are not well know and would open up their system to a possible security threat -- Win 7 has had that problem at times through third party widgets, in the enterprise security becomes a bigger concern. If win 8 was received in a better fashion at the consumer end then most probably it would have also found its way into the enterprise, making for better sales figures.
rradina
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rradina,
User Rank: Ninja
2/17/2014 | 8:27:11 AM
Re: 100 million since may 2013
Forced upon customers?  If you mean made available at the best price that persuaded a customer to purchase, I'd agree.  With Mac, Linux, Chromebooks, Android tablets and iOS tablets, is anyone being forced to purchase Windows?
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/17/2014 | 10:55:23 AM
Re: 100 million since may 2013
You still can't get Win7 on comsumer grade PCs, just business grade.  Because of this Win8 is actually simulating Win7 sales.  I know people that bought a Win8 machine only to buy Win7 to down grade it.  Dell is now selling machines with Win7 with a free upgrade to Win8 just like they once did for XP verse Vista but nobody upgraded to Vista back then.
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 8:23:33 PM
Re: 100 million since may 2013
"#3 neglects to account for the 100 million well after the promotional period.   You can't denigrate the 100 million by claiming that they were discounted when the discount period had expired already."

I don't think so. As the article states in point #4, there's evidence that Microsoft slashed license costs to OEMs-- which would mean some of the licenses after the initial discount period were also beneath historical margins. Not a sure thing, but another point to consider.

And as point #1 details, it's undeniable that Windows 8/8.1 licenses have sold substantially slower than Windows 7 licenses did-- a point that is true of both the discount period, and the time since.

Also, to be clear, this article's premise wasn't that Windows 8 was a disaster; rather, the premise was that Windows 8 is not particularly popular in any meaningful context, and that Microsoft's 200 million license sales aren't impressive. There's a big difference between "disaster" and "not impressive"/"underwhelming." As I indicated in some of the other comments, I think Microsoft could still shake things up. April's Build conference could bring anything from a Windows 8.1 update that makes the OS friendlier to mouse-and-keyboard users, to a version of Office for the iPad, to a converged Windows Phone-Windows RT platform, to a million other potentially helpful things. Microsoft is by no means doomed. But should it be celebrating its Windows 8/8.1 accomplishments to date? Definitely not.
awebb199
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awebb199,
User Rank: Strategist
2/17/2014 | 9:20:15 PM
Re: 100 million since may 2013
We mostly agree on the facts of the matter. 

But you insist the glass is half empty because the glass filled faster last time, and Microsoft wanted the glass to fill faster than it did.  That is the translation of  "Put into historical or aspirational context, Windows 8 and 8.1 have underwhelmed."

 

 

 
proberts551
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proberts551,
User Rank: Strategist
2/17/2014 | 8:38:51 AM
Only a few Tablets so far
I am a technician working for the department, not I.T. of a large corporation.  The managers are starting to install Windowws 8 tablets, and I am having to set them up for the Domain.  The regular I.T. department does not support Windows 8, and has no plans to at this time.  The Windows 8 tablet seems very good Quality, however for password authentication with the touch pad does not always work.  I have verified that all the case letters are correct.  If I plug in a regular USB Keyboard, then login is not a problem.  Staff have been warned.

It could be that the Windows 8 sales figures reported include tablets, so any tablet sold with the OS would be reproted and makeup for some desktop / laptop shortfall.  I think the sales for home users with desktops, and corporate desktop sales are low.  I think this is because of the difficult and illogical way the GUI is set up. 
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 12:24:37 PM
Re: Only a few Tablets so far
Thanks for sharing your experiences as an IT professional working with Windows tablets, proberts551. Sorry to hear about the authentication problem (which I fortunately haven't had on any of the five Win 8 devices I've extensively used, though I have had to deal with Microsoft's incredibly long recovery keys when I was inexplicably locked out of a Surface 2).

But how do the employees seem to like the tablets? Are the Windows devices causing a measurable uptick in worker productivity? Do the employees enjoy using the Windows tablets more than older devices? Compared to everyone else, do employees using these tablets call the help desk more often, or less?

Also, yes, you're right: Windows 8 and 8.1 license figures refer to both PC and tablet sales (and possibly Win RT ones too, though I don't believe that's been verified). As you mentioned, this potentially wide user base should have helped Windows 8/8.1 to overcome weakness in the PC market. But as I explored in the article, that hasn't been the case.
bttlk
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bttlk,
User Rank: Strategist
2/19/2014 | 12:45:17 AM
Re: Only a few Tablets so far
I have experienced the logon problem you describe with tablets (Samsung and HP) from time to time, and also an HP Windows 7 Slate when using the touch screen, but not with a USB or bluetooth keyboard.  Doesn't happen on every logon, but when it fails it takes several tries to logon; most of the time I find a keyboard to get logged on and to start working!
moonwatcher
IW Pick
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moonwatcher,
User Rank: Strategist
2/15/2014 | 2:48:18 PM
re: MS Sells 200M Win 8 Licenses: Yawn
The article states, "Win 8 also shackled the desktop with knuckleheaded UI changes such as the missing Start menu, which only exacerbated the issue."

That pretty much sums it up for most desktop users. And I know many people with tablets but I know of NO ONE who has purchased a Win 8 tablet. Seems people are happy with Android or Apple in that regard, and aren't that interested in what MS Win 8.1 would offer. The problem is that Win 8.1's main feature, that of running native Windows programs such as MS Office, is not the "killer app" that MS hoped. People still use tablets as media consumption devices, not creation devices. People still go to lap tops or desktops to create "important" documents. And of course, people like me doing engineering work need the power and interface that only desktops provide. Windows 8.1 brings little to the table in that regard that isn't better served by Windows 7.

Perhaps Microsoft should put Windows 8.1 on sale again for $39 until April 8th for those upgrading from XP (assuming that older 2006 vintage motherboards would even run Windows 8.1, which might be a crapshoot).

At this point I think most enterprise customers think of Windows 8 as either a failure or as a "consumer" oriented OS, and will stick with Windows 7 for a VERY long time, and hope that Windows 9 or 10 will be more oriented for getting work done, or at least have an easy way to turn off the Metro apps and lock them out.

 

 
PaulS681
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PaulS681,
User Rank: Ninja
2/15/2014 | 5:11:17 PM
Numbers
Great article Michael... Numbers can be made to look any way you want them to look. I think this is a good case that illustrates that. MS is hurting from Win 8 sales I think. I also think they will come back. Why they continue to repeat history is a mystery to me.
petey
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petey,
User Rank: Strategist
2/16/2014 | 1:48:39 PM
Unbelievable
It continues to amaze me when I read some type of business analysis by a techie blogger. This case involves analyzing ms sales. I've seen same types of articles from other writers concerning google or apple. In this case your analysis is simply unbelievable. 200m is 200m. Think about that number for a nanosecond. Trying to portray it as anything other than remarkable is insane. What business would not want that number in today's economy?
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/17/2014 | 10:41:04 AM
Re: Unbelievable
@petey, its a Microsoft number and you believe it?  When Dell buys OEM licenses from Microsoft it buys in LARGE volume maybe two to three years worth to cover sales.  Yeah, Microsoft pockets the money but that doesn't mean the licenses are actually being used.  In the case of Vista, Microsoft allowed unsold OEM licenses to be converted to Win7 so Dell's investment is protected and then Microsoft counted them again as Win7 sales.  In addition Dell is now selling Win7 PCs with a free upgrade to Win8 however Microsoft counts them as Win8 sales.  Add these two tactics up for all the numerous PC manufacturers and you have an Unbelievable license count.
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 7:10:57 PM
Re: Unbelievable
petey,

200 million is a big number; as I said at the beginning of the article, 200 million equates to roughly one license for every 35 people on Earth. As your comments suggest, very few products are so widely spread. But it's not "insane" to call Windows 8's sales disappointing.

As the article elaborates, when Microsoft says "200 million," that doesn't mean 200 million customers have actually decided to upgrade to Windows 8 or 8.1. So in that sense, 200 million is not 200 million.

Moreover, if we look at the OEM numbers that enable Microsoft to claim 200 million, we find additional concerns. As the linked article is this story elaborates, reputable publications such as The Wall Street Journal have reported that Microsoft might have substantially slashed Windows and Office licenses fees in order to stimulate OEM production of ~8-inch Windows tablets. Admittedly, we don't know if this is true, but manufacturers produced a lot of smaller Windows tablets last fall, and most of them came with Office-- so that's at least circumstantial evidence than some behind-the-scenes dealing occurred. Certainly, key executives at many Windows OEMs were publicly criticizing Windows 8 throughout last spring and summer.  The trash talk from Microsoft's alleged friends doesn't suggest many of them were eager to invest more in Windows 8 without some motivation. If we assume, for the sake of argument, that Microsoft did indeed reduce license costs, then the company is clearly earning less money on each Windows 8 license than it did on licenses for previous versions of Windows. If this tactic eventually stimulates Windows Store revenue, then perhaps Microsoft's gamble will end up paying off. But for the present, the Windows app ecosystem is problematic. All of this reinforces that 200 million Windows 8 sales are less valuable than 200 million sales of previous versions.

The preceding point is somewhat speculative, but turning back to verifiable facts, we know many early Windows 8 licenses were delivered at a discount. So again, some of the Windows 8/8.1 licenses are more valuable than others. This point doesn't rely on the OEM reports; if those reports are true, they'd simply exacerbate an objectively problematic situation. As I indicated above, it would be moot to talk about the relative value of different license types if Microsoft's various tactics had resulted in blockbuster device sales or stimulated developer interest in the Modern UI. But Microsoft has seen disappointing progress on these fronts. The company might still have some cards up its sleeve (stay tuned for Build in April), so the Live Tile interface might not be down for the count. But currently, Windows 8 has sold more slowly than Windows 7, and probably at lower margins. It also hasn't provided tangential benefits. In all ways, that sounds like a product line headed in the wrong direction.

To be clear, Microsoft is very strong overall. Outside of Windows 8, most things are going well. Azure, for example, could become for the cloud era broadly what Windows was to the PC era. But Windows has been a traditional cornerstone of the company's strategy, and no small part of the influence it's been able to wield among customers, competitors and partners. 200 million licenses might sound like a lot, and in certain ways it is-- but from a sales perspective, the OS hasn't lived up to its heritage. Some people say that Microsoft is doomed. That's ridiculous. But that doesn't mean that Microsoft isn't experiencing disruption, with Windows at the epicenter.
petey
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petey,
User Rank: Strategist
2/17/2014 | 9:08:52 PM
Re: Unbelievable
Micheal I don't understand your point of highlighting the 200 number and then proceed to explain that's it's not 200? Is your point; 1) they are lying never to be trusted? 2) windows 8 is a bad product, they are losing Os sales to some phantom platform? 3) Microsoft is a dying company and win 8 sales prove it? 4) you are really smart and analytical with a lot of free time to analyze useless facts that mean virtually nothing to anyone but yourself. Option 4 is not unique to you, no disrespect, most tech writers suffer the same affliction. Break out of the mold, away from the pack and take a chance.... If the world ends tomorrow, don't let your legacy be 200m is not really 200m
Michael Endler
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Michael Endler,
User Rank: Author
2/18/2014 | 9:48:57 PM
Re: Unbelievable
No disrespect taken, petey, I suppose it's a fair enough question, and I appreciate your active participation in the conversation. The article wasn't necessarily meant to be legacy-defining, though. ;)

Benjamin Disraeli is alleged (by Mark Twain, rather apocryphally) to have said, "There are three kinds of lies: lies, damned lies, and statistics."

Regardless of the phrase's true authorship, I generally agree with its commentary; numbers are used all the time to mislead. As you rightly suggested, it's not an issue of life or death in this case, but the point remains: A lot of statistics get simplified, especially when companies use them for marketing purposes. Granted, Microsoft revealed the 200M figure in fairly low-key fashion this time-- but they (like most big companies) have been guilty before of trying to pass off creative accounting as legitimate financial successes.

Some customers are appropriately skeptical of these statistics, but others not only accept them, but also use them to make purchase decisions, or to otherwise inform their opinions about a certain product or company. As a result, I find it useful to examine provocative statistics from multiple angles, and to encourage a healthy conversation (like we are fortunate enough to have here) about what the numbers actually mean. To some people, 200 million sounds unequivocally impressive under all circumstances. But this is demonstrably not the case; the value of a number is usually, if not always, contextual. What is the appropriate context in this case? Well, that's what I attempted to answer with the article.

Also, if recent InformationWeek comments threads have shown everything, it's that our readers are passionately divided about whether Windows 8 is any good, and whether tablets are really surpassing PCs in relevance. It's fun water cooler discussion, and this article was intended to tap into this vein. If people are going to have "Mac vs. PC" or "Windows 8 vs. Windows 7" or "tablet vs. laptop vs. hybrid" arguments anyway, I hope articles like this one can enrich the debate!

Also, just to make sure I wasn't understood (per #3 in your mesage), the point was not that Microsoft is dying. Outside of Windows, most of the company is actually doing really well. But Windows has been a traditional cornerstone of the company. I don't think Windows is going to die, per se, but it's changing in relevance, which means the whole company's emphasis is changing. I think this is relevant to many people who use Microsoft products, especially those with investments that will be impacted by the company's future strategies.
petey
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petey,
User Rank: Strategist
2/18/2014 | 10:13:16 PM
Re: Unbelievable
I've read information week for over 25 years. It is amazing the transformation of digital information during this time. Even further, this transformation has exploded this past 6-7 years and I expect this trend to continue. Companies like Microsoft, while dated, in the eyes of this generation, are the foundation for this revolution. Not that their products are or were ever perfect, I think it's important to realize just how much of today's technology depends on their products. I think we take for granted how well some of these older tech companies have integrated their products. This is not about win 8 taking over the world, but more about ms still being profitable and viable all these years later given their legacy status. I'm impressed.
Michael Endler
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Michael Endler,
User Rank: Author
2/18/2014 | 10:26:22 PM
Re: Unbelievable
Thanks for the follow-up, petey.

"Not that their products are or were ever perfect, I think it's important to realize just how much of today's technology depends on their products."


Very valid point. Commentators sometimes act like Microsoft is dying, and I know I've sometimes described its problems too aggressively (such as my use of the word "failure" at the end of this story!). But as you suggested, the company is damn-near indispensable to the way the world works today. A lot of people don't realize how much of our business and societal infrastructure relies on Microsoft technologies. Windows 8 is problematic, but legacy Windows software is incredibly important, as are a number of other Microsoft products.

Windows is important to the company's overall strategy, but Microsoft is actually pretty diversified. We can debate how much power and influence Microsoft is positioning itself for, and what that might mean for customers and partners. But it will remain powerful and influential in almost all scenarios I can foresee.

You seem to feel strongly that Microsoft should be given its due respect as a phenomenally important company-- and I agree. Windows 8 is a legitimate sore spot that could open some of the company's strategies to disruption, but most companies would kill to have Microsoft's "problems."
bttlk
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bttlk,
User Rank: Strategist
2/19/2014 | 12:30:47 AM
Re: Unbelievable
Articles with titles such as "hate Windows 8" or "failure" are poor journalism.  You may not like the new product, or worse yet not understand it and criticize it wrongly, but hate or fail do not belong in a reputable article.  I am offended by InformationWeek and ZDNet's approach in many articles, which I classify as "opinion" not reporting.  I often pass on reading them due to the titles, or the same titles running for weeks.  After a few days, it's old info, not news.  Take it down.  More objective articles should be written, not some bash Apple or MS or any other company or platform.  These two companies are doing nicely with their billions of profits. Not every product is a hit.
rradina
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rradina,
User Rank: Ninja
2/19/2014 | 8:49:40 AM
Re: Unbelievable
That's the challenge in today's "digital magazine" era.  As consumers of this media, we have to make sure we understand what we're consuming.  Is it reporting or editorial.  I think there's also a new class of media which is blogging.  Blogging can be reporting, editorial or what I call ranting/venting.  The latter category is quite broad and it's generally easy to spot because it begins with a sensational title designed to call attention to itself.

Since print died, I believe this is a natural outcome of our expectations of magazines to be more like a daily newspaper.  We want new daily content.  We want to know about new product announcements TODAY, not a month from now as is typical when trying to schedule a weekly paper publication (or far longer if it was a monthly publication.)  That puts tremendous pressure on sites to create new daily content.
danielcawrey
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danielcawrey,
User Rank: Ninja
2/18/2014 | 4:46:46 PM
Re: Unbelievable
I'm sorry, but the real reason why Microsoft has to fudge around these number is because of the fact that Windows 8 is just not a very good OS. I applaud them for trying something different, but as a very mass market product this version is just not very good. 

Windows 7 was much better because it was built specifically for a PC. Windows 8 is not sure what it wants to be. 
Johnnythegeek
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Johnnythegeek,
User Rank: Strategist
2/17/2014 | 5:30:52 AM
Windows 8 is a dud
Well its not like Microsoft has never had a Windows dud before. We had Windows ME, and Windows Vista. Both of which never inspired any real improvements or simply annoyed users to a point that any improvements were a mute point. I do not see Windows 8 being any different. The minor improvements is 8.1 is meant to acknollege mistakes but don't go far enough to really address them. In all honesty Windows 8.1 is usable but compared to Windows 7 its like asking do you want to pay again to drive a Chevy when your already driving a Benz? To get anyone to upgrade or buy a new product that product must appear and show to the buyer that its better then what they have. I don't believe Microsoft has proven to anyone Windows 8 is better only different. That in itself does not sell anyone but the curious and techy geeks who generally embrace anything new.  Apple has already proven that a new version does not guarantee interest in a operating system. Its most likely why Apple's latest OS X was given away because Apple indeed wanted as many users on the same version but knew that many would not feel compelled to buy it. I don't expect Microsoft to begin handing out Windows 8 upgrades for free, but I do think they need to rethink how frequently users are willing to shell out $120 to do so. Also, how many are will to pay that $120 to accept a totally new concept with a learning curve. 
kgreenhow530
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kgreenhow530,
User Rank: Strategist
2/17/2014 | 9:57:27 AM
Really...this again?
I can't help but feel like all the snarky writers who are jumping on the "Microsoft is dying band wagon" are missing/ignoring some important details. First of all, in an age, where Google is drawing millions of people to Android at an impressive rate, one must ask them self, "do you know how many billion dollars 200 million licenses amounts to?" Compare that to Apple selling 28 million Mountain Lion licenses as of last summer. Microsoft may not be dominating the way some would expect, in fact maybe Windows 8 is not as good as people were hoping, but there is a bigger picture. One must considering how resistant the majority of people are to change as well as a understanding of why Windows was made the way it was. And maybe many us XP techies are not noticing the inevitable and unilateral move to mobile devices. Seems like we need some new writers that aren't stuck in the old XP way of doing things. Microsoft is big enough that they will dictate the future of computing and no amount of banter or whining will change that.
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 7:58:44 PM
Re: Really...this again?
Thanks for the thoughts, kgreenhow530.

I think it would be more accurate to say "Microsoft is big enough to influence the future of computing." But is it inevitable that Microsoft will "dictate" the future? I don't think so. Given the Windows weaknesses I discussed in this article (and further elaborated in some of the comments), I think Apple and Google have much more influence in terms of mobile computing, and might (among others) have as much or more industry influence overall. Microsoft is a strong company. Outside of Windows 8, a lot of things are going well. But its clout (and thus its ability to dictate) isn't as strong as it used to be. The company is powerful, but no longer a monopoly. The current state of Windows has played a big role in that distinction. It's ridiculous to say that Microsoft is dead or dying. But in terms of resources and existing assets, it's lost important ground.

As for comparing Windows 8 to OS X in terms of profitability, I think the battle is probably closer than you think. As I mentioned in this article, Microsoft is making less upfront money than it used to on many Windows licenses. Microsoft partners, meanwhile, are dealing not only with lower sales, but also lower margins. And though legacy Windows software remains indispensable, Windows 8/8.1 haven't yet generated tons of new revenue via apps or accessories. Apple, meanwhile, gets to keep 100% of the profits from hardware, and its machines boast an average selling price around $1300. Among computers over $1000, Apple machines have regularly outsold PCs for years. Many PC brands lose money or subsist on slim margins. Macs are not only profitable-- they're very profitable. Apple doesn't have a ton of PC market share, but when it comes to the most desirable customers, Apple cleans up. I'm not trying to say that OS X is somehow vastly more valuable than Windows. But OS X is much more valuable than its market share might suggest.
Rob Peterson
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Rob Peterson,
User Rank: Apprentice
2/17/2014 | 11:56:36 AM
200Million Licenses ??
Do you think that the number of Win8.1 downloads is more representative of the actual total number of Windows 8 users ?

After all it was a free download so I guess most would have downloaded it.

If this is so then there must be an awful lot of licenses still with the OEM/Manufacturer ie sold by Microsoft but not yet bought by the end customer.

Makes you think!
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 12:44:36 PM
Re: 200Million Licenses ??
I think that download (as opposed to OEM sales) figures paint an incomplete picture but still mostly reinforce that desktop users haven't been impressed by Windows 8.1.

Windows 8.1 is free to everyone with a Windows 8 machine, but among desktop users, only around 37.3% of Windows 8/8.1's January traffic came from the update. This traffic would include newly-bought machines, which means the upgrade rate among existing Windows 8 users was most likely even lower. 

What does this suggest? Well, a contrarian might argue that people aren't upgrading to Windows 8.1 because many of them are happy enough with Windows 8. Most other evidence (as this article elaborates) suggests Windows 8's word of mouth is so-so at best, however, so it's pretty hard to argue too many Win 8 users are satisfied. It could be that many consumer Windows 8 users rely on tablets or other devices for many needs, and only use Win 8 for Office or other specific legacy applications. That could keep Win 8 machines active in usage share statistics while also allowing for a lack of upgrade urgency among seemingly unhappy users. But this is one of the strange data intersections. People seem dissatisfied with Windows 8, so you'd think most users would have jumped at the free Windows 8.1 upgrades. But they haven't.
Rob Peterson
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Rob Peterson,
User Rank: Apprentice
2/17/2014 | 4:25:32 PM
Re: 200Million Licenses ??
Where do you get your figures from to calculate only 37.3% came for the update, as far as I know Microsoft are keeping tight lipped about actual numbers, they are only stating how many licenses they have sold and most of these could still be held by OEMs and machine builders. It is entirely possible that the entire Windows 8/8.1 user base could be even smaller than current predictions. The accurate figure is how many Windows 8 product keys have been activated but microsoft won't reveal these numbers (which suggests the number is dire). I will stick with my theory that most Windows 8 users updated to 8,1 and that this would suggest that the total number of windows 8/8.1 users is a lot lower than current estimates.
Michael Endler
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Michael Endler,
User Rank: Author
2/17/2014 | 7:43:30 PM
Re: 200Million Licenses ??
That figure comes from the most recent Net Applications numbers: http://www.informationweek.com/software/operating-systems/windows-81-still-resisted-by-desktop-users/d/d-id/1113682


These figures aren't official, but they come from a pretty large sample (as the linked article elaborates). If I recall, Microsoft has referred to Net Applications figures before, at least for marketing purposes. Net Applications only tracks desktop traffic and users in this report, soit wouldn't include all activity from all new Windows devices.

Net Applications does provide insight into a very specific group, however: desktop users. These users were ostensibly the ones who took the most umbrage with Windows 8's UI departures. One would think these disenchanted users would have downloaded 8.1 the second it became available. But Windows 8.1 only accounts for 3.95% of desktops overall, or 37.3% of combined Windows 8/8.1 share. That seems strangely low, given people were unenthusiastic about Windows 8, and that Windows 8.1 addressed many of the problems. It could be that people just relegated their Windows machines to niche use, as I suggested in another comment, or that Windows 8.1's changes simply don't go far enough (e.g. why isn't boot-to-desktop enable by default on non-touch devices, and where is the start menu? etc).

For reference, OS X Mavericks, which is free to most Mac users, is running on over 40% of Apple computers. Mavericks and Windows 8/8.1 aren't perfect comparisons-- but users of previous Mac versions weren't vocally voicing discontent, or declining to update, like Windows users were. It seems reasonable to infer that Mac users had less urgency than Win 8 users to upgrade. Nonetheless, Mac users have done so at a faster clip.


Incidentally, while looking up the link for the Net Applications story, I found a slight inaccuracy in this article. Windows 8 and 8.1 accounted for 11.7% of Windows desktop systems in January, not 11.7% of desktops overall. Windows 8 and 8.1 were 10.58% overall. Not a significant difference in the context of the point I was making, but better to correct the mistake.
owade83
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owade83,
User Rank: Apprentice
2/17/2014 | 12:20:58 PM
your own information site
My Uncle Elijah just got an awesome six-month old Audi Q5 just by some part time working online with a pc. read this

>>>>>>>> www.bay91.com
Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
2/17/2014 | 11:42:07 PM
"Failure" seems a bit much
I'll stipulate to "underwhelming," but I'm not sure "failure" is the right word here.  Rome wasn't built in a day, and it's all part of Microsoft's mobile strategy of integration -- and it will take some time to wrest the power away from Android and iOS.

Besides which, no doubt the release of 8 has helped provide a much-needed kick in the pants to get customers to migrate from XP to at least 7 -- where threats to cut off support have not worked.
Michael Endler
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Michael Endler,
User Rank: Author
2/18/2014 | 9:57:22 PM
Re: "Failure" seems a bit much
I'll concede that one, Joe. I stand by "underwhelming," which I think the analysis supports, but "failure" is too harsh, at least at this point. I think Microsoft can still turn it around, but we're reportedly at least an update away from a tenable model for balancing the Modern and desktop UIs-- and that's only if the alleged "Threshold" updates are a) real, and b) more motivating to customers than Windows 8.1 has been. It will take a while to wrestle market share away from iOS and Android, as you pointed out, but Microsoft can't afford to move at a glacial pace forever. Microsoft might not have totally failed with Win 8, but given the intrinsic advantages the company wields and the aggressive manner in which it has tried to push the new OS, Windows 8's achievements to date have to fall on the lower end of the expectation spectrum.  
Joe Stanganelli
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Joe Stanganelli,
User Rank: Ninja
2/19/2014 | 2:11:47 AM
Re: "Failure" seems a bit much
FWiW, and maybe this is just me, but I think the rush among UI designers to make everything "tablet-friendly" (whatever that means) is based upon an imagined, false demand.  We're not at a point where everyday users want big things to slide around.  We're happy with little and medium things to point and click.  Obviously, tablets present some interfacing issues when it comes to this, but there must surely be a happy medium.  I don't think MSFT has found that with Windows 8.
Whoopty
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Whoopty,
User Rank: Ninja
2/18/2014 | 7:08:33 AM
Stats
Game developers use similar stat blurring to make them seem more successful. They talk about games "shipped," which sounds impressive, but in reality just means ones sold to retailers - it has nothing to do with consumer purchases. 
David LC
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David LC,
User Rank: Apprentice
2/19/2014 | 8:30:00 PM
Great news!
Funny how everyone always discounts Microsoft as a company.  Come on....can I actually get any work done on my iPad?  I have had an iPad for several years and mostly use it to check email, linkedin/facebook, read articles and read magazines.  I must have around 40 apps but they just don't compare to the productivity of using my laptop with 3 large monitors attached.  The high end HP Elite laptops have display ports.  I'm also switching over to a Windows 8 Pro tablet to replace my iPad.  The HP laptop Split X2 to be exact.  i5 Intel and 12 hours of battery life AND can run all my Windows software.  I use as an Ultrabook or detach and use it as a tablet.  I love it.

I recently updated my main machine to Windows 8.1 a few months ago.  I was worried because of all the negative press but Window 8.1 is actually great.  The tiles are much better than the start button.  I can now configure exactly how my tiles (shortcuts) are organized.  With the start button, you are stuck looking at every single thing you ever installed, even thou you may only use 5% of those shortcuts during a normal week.  I would also love to get a nice 24 or 27inch TOUCH  screen to go with windows 8.1.  The experience is just great.  I would still use a mouse for regular activity but what a nice convenience to just use touch at times.  I'm looking forward to it.
SachinEE
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SachinEE,
User Rank: Ninja
2/20/2014 | 5:14:08 AM
Re: Microsoft Sells 200M Win 8 Licenses: Yawn
Windows 8 and Windows 8.1 sales may have fallen short of Windows 7 sales but 200 million is still a healthy figure to talk about standalone.  Your analysis is a valid one, but we have to take into account the post-Bill Gates problems faced by Microsoft. Overall slump in PC market and Microsoft's recent debut in tablets world are also things to be considered.

 
SachinEE
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SachinEE,
User Rank: Ninja
2/20/2014 | 6:00:35 AM
Re: Microsoft Sells 200M Win 8 Licenses: Yawn
@ Joe Stanganelli, well that's a fairly balanced analysis I must say. Microsoft is playing its cards very carefully it seems. They are trying to penetrate the mobile market (Tablets and Smart Phones) slowly but surely deploying different techniques like lowering the prices of their tablets etc. Although we can't be sure, yet we can see some gains for Microsoft if they could persistently try to boost their tablets and smart phones and come up with smooth integration of all their devices with one platform.

 
SachinEE
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SachinEE,
User Rank: Ninja
2/20/2014 | 6:00:55 AM
Re: Microsoft Sells 200M Win 8 Licenses: Yawn
@ Brian.Dean, It is really amazing how many times we have to read about difficulty to use new UI of Windows 8 from people fairly well conversant with technology. I have used Windows 8 on a non-touch display and found it not-so-difficult to use, though one can enjoy full features of Windows 8 on touch displays.
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