How you define success influences how you measure it. Microsoft has come some way since its blunders in the mobile market and change in CEOs.

The company's recently announced recently announced success with Windows 10 at the operating system's first anniversary seems definite. Microsoft says that the roll-out has been the "fastest-growing version of Windows ever" and that the software is running on 350 million devices.

But some IT management analysis from managed service provider Softchoice suggests that Microsoft may be facing a potential crisis of a lack of appeal to businesses with Windows 10. Given that the corporate market is of immense importance to the company, it could be bad news. But are things really grim? I looked at the data and got some answer from Microsoft. The answer is that there could be some concerns and that the growth record also may not be all it initially seems.

Low business uptake?

According to information sent to me by Softchoice, its asset management system looked at 400,000 personal computers at 169 businesses. Only 2,999 of the machines, or 0.75 percent, ran Windows 10. Instead, companies have adopted Windows 7, three versions back (counting Windows 8.1). And at almost 2,400 PCs per business on the average, these aren't tiny companies. The numbers would suggest on the surface that businesses have yet to be interested in this software that is a major component of Microsoft's strategy.

But there are caveats on both sides. The Softchoice-calculated business adoption rate doesn't take into account how slowly companies are in taking on new operating systems. The problem is predictability and testing. IT departments have to test the new software against all their applications, both internal and third-party, to be sure of compatibility. You don't start upgrading and hope that things work out. This is a long process, which is why companies don't do it casually, especially if upgrading means a need for new hardware because older machines are largely in place. In other words, don't spend money when you don't have to.

There's also a question of conflicting data. A study from early this year from Spiceworks, an IT professional network, suggested that 18 percent of businesses were using Windows 10. But what exactly did that data mean? Did adoption mean to the surveyed IT professionals that their organizations were using it throughout, or could the term mean testing a small set? And two-thirds of respondents said their organizations were happy with what they had.

[Update: Spiceworks emailed me to say that they had more recent numbers showing that 38 percent of global organizations had adopted Windows 10, with 58 percent of those having implemented and the remaining 42 percent still testing. However, that still doesn't explain what percentage of the company were using it.] 

Whittling down Microsoft's numbers

On Microsoft's side, the 350 million devices sounds impressive. But in 2015, global PC sales were 289 million units, according to Gartner, and that was an 8 percent decline from the previous year. Even assuming the same rate of decline, that would be, at most, 266 million PCs sold worldwide. Factor out Apple's approximate 21 million Macs and you have 245 million PCs. Approximately 70 percent of the Windows 10 machines were new PCs sold with the operating system. That leaves 105 million device upgrades, including PCs, tablets, phones, and Xboxes, according to information a Microsoft spokesperson sent me.

According to an estimate from gaming company Electronic Arts combined with other data, there may have been 19 million Xbox Ones sold, according to The Verge, and they would have received the Windows 10 upgrade. Now we're down to 86 million devices, less however many tablets and smartphones might have been sold with or upgraded to Windows 10. Pretend for a moment that all of those are upgraded PCs.

Gartner estimates that the PC installed base is 1.4 billion. Now let's be pessimistic and say that Gartner's 2015 Q4 numbers hold true for the installed base and 7.5 percent are Macs. That would mean an installed base of roughly 1.3 billion, making the upper bounds of the Windows 10 upgrades 86 million out of 1.3 billion, or roughly 0.7 percent. Suddenly the Softchoice number doesn't look so wacky. And that's with the year of free upgrades.

Now, some large portion of the new PCs are probably replacements for older ones, so treat all the 245 million new Windows 10 PCs sold as upgrades and add them to the 86 million existing machine upgrades. You get 311 million, which is about 25 percent of the Windows PC installed base. The range between 0.7 percent and 25 percent is enormous. The question at this point will be how much the numbers will grow now that a free upgrade is no longer available.

Published on: Aug 3, 2016
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