Microsoft claims 200M Windows 8 licenses sold, but how many are in use?

Calculations show that between 165M and 184M are being used to access the Web

Microsoft last week said that it had sold 200 million licenses of Windows 8 since the operating system launched more than 15 months ago. But how many copies are actually being used?

An analysis of available data showed that while not all 200 million licenses are powering systems that did the most basic of PC tasks -- access the Internet -- the number of Windows 8 devices in operation was much closer to Microsoft's claimed mark than nine months ago.

Last May, after analyst Patrick Moorhead of Moor Insights & Strategy questioned Microsoft's then-number of 100 million licenses sold, Computerworld calculated that Windows 8 was actually being used by just 59 million devices.

How does the 200-million claim -- voiced last week by Tami Reller, Microsoft's marketing chief, at a Goldman Sachs-sponsored technology conference -- stack up?

Microsoft counts a license as sold when it provides a customer an upgrade or one of its OEM partners a copy for a new PC, tablet or 2-in-1 device, like Microsoft's own Surface Pro 2. Licenses to OEMs make up the bulk of what Microsoft sells. According to the company, the numbers it regularly cites for Windows 8 licenses exclude those sold to enterprises as part of volume licensing agreements.

But because Microsoft considers a license sold -- and accounts for it on the books that way -- as soon as a Windows-powered device comes off the factory line, it's added to the "sold" column even though a customer hasn't purchased the machine. Licenses installed on OEMs' inventory, whatever is in retail or a warehouse, or for that matter, in transit from factory to destination, count as sold.

Nine months ago, Moorhead argued that a more accurate representation of Windows 8's success -- or failure -- was to count differently. "How many Windows 8 PCs have sold and are being used?" Moorhead asked then.

If he asked that same question today, what would be the answer?

One way to figure that out is to use Web analytics company Net Applications' data, which estimates the "user share" of each operating system. Caveats apply: Net Applications' statistics are based on accessing the Internet, so it cannot account for hardware that doesn't go online, and the firm massages its raw data, weighting users by their country of origin, to come up with what it believes is a more accurate representation of operating system usage.

Net Applications counts both traditional personal computers and tablets running Windows 8 or Windows 8.1 to arrive at its monthly averages. Combine Net Applications' number with estimates or claims of the number of devices worldwide running Windows, or the same for all personal computers and tablets running a desktop OS, and one can guess at Windows 8's in-use total.

The last time Microsoft made a global Windows claim was in May 2013 when Julie Larson-Green, who then led Windows development, said there were 1.4 billion Windows PCs.

Allowing for the intervening nine months -- and the fact that most new systems are not additive, but replacements for older machines discarded or retired -- assume that there are now approximately 1.5 billion Windows devices in use.

In fact, the 1.5 billion matches the number IDC analyst Rajani Singh has pegged of "active devices, fully operational PCs, and not those that are placed in the attic or closet," a figure she said in an email included pirated or non-paid Windows licenses.

Net Applications' staked Windows 8's user share for January at 11.66% of the computers running one edition or another of Windows. Multiply that by 1.5 billion and one gets:

11.66% x 1.5 billion = 174.93 million Windows 8 devices

To check the validity of Net Applications' user share numbers and in-use hardware, one can call up a Dec. 6, 2011, Microsoft claim that there were then 1.25 billion Windows PCs. Alongside the 1.25 billion data point, Antoine Leblond, a vice president of Windows Web services, said Microsoft had sold 500 million licenses for Windows 7.

Microsoft's claimed it has sold 200 million Windows 8 licenses, marked by the red bar at the left. The others are various estimates of actually-in-use machines. (Data: Microsoft, Net Applications, StatCounter, IDC, Benedict Evans.)

According to Net Applications, at the end of November 2011, Windows 7 powered 37.51% of all Windows devices. So ...

37.51% x 1.25 billion = 468.94 million

Another way to generate an estimate of the number of Windows 8 devices is to use Windows 8's user share of all computers. There, Net Applications put the OS's number at 10.58%. (Windows 8's share of all computers is smaller than its share of Windows-only devices because the latter accounts for about 91% of the whole.)

Estimates for the installed base of all in-use personal computers range from 1.6 billion (by Benedict Evans, now an analyst with venture capital firm Andreessen Horowitz) to 1.63 billion (Gartner, last fall, in a take on the number likely to be in place by the end of 2013) to 1.74 billion (IDC's Singh).

10.58% x 1.6 billion = 169.28 million

10.58% x 1.63 billion = 172.45 million

10.58% x 1.74 billion = 184.09 million

So, the estimates for Windows 8 active devices ranges from a low of 169.3 million to a high of 184 million -- out of the 200 million licenses Reller claimed -- with the 175.9 million based on the 1.5 billion Windows PCs about in the middle of the range.

By comparison, the same calculations result in a range for OS X -- which last month had a user share of 7.68% of all devices -- between 122.9 million and 133.6 million active, in-use Macs:

7.68% x 1.6 billion = 122.88 million

7.68% x 1.74 billion = 133.63 million

Net Applications is not the only metrics company to publish public statistics that can be used to calculate the number of in-use Windows 8 devices. Ireland's StatCounter tracks "user share," a measurement that uses a different methodology to count page views. Unlike Net Applications' figures, StatCounter measures online activity rather than the number of online individuals.

Using StatCounter's January 2014 user share of 10.31% of all PCs and tablets, the number of Windows 8 and Windows 8.1 devices is:

10.31% x 1.6 billion = 164.96 million

10.31% x 1.63 billion = 168.05 million

10.31% x 1.6 billion = 179.39 million

The numbers produced with StatCounter's user share for Windows 8 are slightly less than those generated using Net Applications, but they're in the same ballpark, with a low and high of 165 million to 179.4 million.

All these calculations point in the same direction: Windows 8, which powered just 59 million machines out of 100 licenses sold in May -- for an in-use rate of 59% -- now powers about 176 million devices out of 200 million licenses sold, for an in-use rate of 88%.

But where's the remaining 12%? Where are the missing 16 million to 35 million devices, the difference between 200 million licenses and the active 165 to 184 million machines?

In transit, in inventory, on retailers shelves. And some were likely bought as Windows 8 or 8.1 systems, but then subsequently "downgraded" to Windows 7 Professional by savvy individuals or small businesses, counting as a sale to Microsoft but not showing up in Net Applications' or StatCounter's user or usage share statistics.

In any case, Windows 8, while putting a larger percentage of its licenses to work, continues to lag behind its Windows 7 predecessor on uptake, not surprising what with the apathetic-to-antagonistic customer reaction to the former, the historic slump in PC sales, and Microsoft's inability to spur significant tablet sales with the new OS.

According to Net Applications, Windows 8's user share of 11.66% last month (of only those devices running Windows) was less than half of Windows 7's 24.87% at the same time (the 15th month after launch) in its sales cycle.

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 gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about windows in Computerworld's Windows Topic Center.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Microsoftoperating systemssoftwareWindowsgoldman sachs

More about AppleGartnerGoldmanGoogleIDC AustraliaMacsMicrosoftTopic

Show Comments
[]