A senior Microsoft executive on Tuesday said the company has sold 40 million licenses for Windows 8, essentially matching the first month performance of Windows 7 in late 2009.
"We have sold 40 million Windows 8 licenses so far," said Tami Reller, the new head of the Windows division's business side, at the Credit Suisse Annual Technology Conference. "The 40 million is roughly in line with Windows 7."
Analysts on Wednesday put Reller's numbers into context, and tried to divine what she meant by "sold."
"That's good, but not great," said Patrick Moorhead, principal analyst with Moor Insights & Strategies, in an interview, implying that the debut of Windows 8 was not going to be enough, as some industry watchers had expected, to turn around the PC business.
Still, Moorhead said the 40 million figure was impressive. "Think about that. When Windows 7 released, everyone was eager to get away from Vista," he said. "But you don't see people running to upgrade to Windows 8."
Rob Helm, an analyst with Directions on Microsoft, agreed. "It looks like license sales are on par with Windows 7, at least," Helm said in an email Wednesday. "That's a good result given other signs of distress in the PC market."
As Helm noted, PC sales have been flat or down year-over-year, due to continued economic issues and fierce competition for technology dollars from smartphones and especially tablets.
But at the same time, Reller seemed to dial back early expectations for Windows 8, instead arguing for a long-haul look. "Windows 8 wasn't built for just any one single selling season," she said. "It really was built for the future, the future concept for the future. And so it will take a few selling seasons to get sort of all the designs we all like into the marketplace, all the apps that we want into the Store."
Like Moorhead, Reller also noted the special circumstances around Windows 7, although she refused to utter the word "Vista," as if the name of that problem- and perception-plagued OS had been excised from the Microsoft lexicon.
"I mean, if you think about the timing of Windows 7, there was a lot of anticipation. And you can sort of fill in the blanks on why there was such great anticipation for Windows 7, but there was," Reller said when asked to compare Windows 8's start with its predecessor's.
Microsoft declined to elaborate on Reller's 40 million number, or define what licenses had been included in her tally.
Analysts, however, were not so shy, noting that the count included licenses for PCs that have not yet been sold.
"Microsoft recognizes licensing revenue as an OEM builds and ships [PCs] to a distribution point or to end customers," said Moorhead. In other words, machines that have been assembled and shipped, but not yet sold or deployed, would include licenses that Microsoft can legitimately count among the 40 million.
Without sales figures from Microsoft's OEM partners, it is impossible to tell how many PCs with already purchased licenses are not yet in customers' hands.
But the number could be significant. Last month, Microsoft said it had sold $783 million worth of Windows 8 licenses to OEMs prior to the OS's release, a figure up 40% over the same quarter prior to the launch of Windows 7. If that increase in licenses purchased has not been matched by a corresponding increase in PC sales -- and there's evidence that the latter have been disappointing -- Microsoft's "sold" total could be substantially higher than the number of machines actually in use.
Helm suspected as much. "It's possible that Microsoft has given OEMs incentives to order early and often," he said of Windows 8's high pre-order volume.
One thing is clear, however: The 40 million doesn't represent the number of PCs currently running Windows 8. "It's system sales as opposed to upgrade sales," said Moorhead of the difference.
So, too, for other licenses, which could be tied to PCs that, although purchased, are not running Windows 8 but instead have been downgraded to Windows 7, a common strategy by enterprises.
Still more of the 40 million can be attributed to the upgrade program Microsoft kicked off last summer that lets buyers of Windows 7 PCs acquire an upgrade to Windows 8 Pro for just $14.99. Microsoft recognizes that revenue, and thus moves the license to the "sold" column, when the upgrade is purchased.
Windows 8 had a slight advantage there over its precursor: Microsoft kicked off the Windows 8 upgrade offer June 2, 2012, three weeks earlier than the corresponding Windows 7 deal, which began June 25, 2009.
In the end, Reller's number may be relatively meaningless to Microsoft's core constituency.
"For enterprise customers, what matters is deployed Windows 8 units," Helm said. "That's what is going to determine the ramp-up of the new Windows 8 development platform, WinRT, which companies need to evaluate for use on tablets now and pretty much everything long term."
On that metric -- copies of Windows 8 being run -- Microsoft has always been moot. Others, such as Net Applications, have tried to step into the gap to estimate usage, but the numbers are always extrapolations.
By Net Applications' statistics, Windows 8 is playing catch-up with Windows 7, sporting a usage share of all Windows systems in October that was five times smaller than Windows 7 at the same point in its release cycle.
A transcript of Reller's comments at the Credit Suisse conference can be found on Microsoft's website.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is [email protected].
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