Customer Success Testimonial: Recovery is Everything

Microsoft has released information about sales of Windows 8 and apps from the Windows Store, plus data on users' interactions with the new operating system.

News of Windows 8 sales appeared in a blog post summarising Chief Marketing Officer and Chief Financial Officer Tami Reller's presentation to Wednesday's Credit Suisse Annual Technology Conference. In both the post and the webcast of the presentation, Reller offers a single line of sales data.

40 million sounds like a lovely big number, what with being more than a million a day since Windows 8's October 26th launch. And that's on top of the previously-revealed sale of four million upgrades.

But the post, and the webcast are both silent on just what Microsoft means by licences sold, which we'll come back to later because it bears examination.

Another item from the post discusses the performance of the Windows Store, again with some ambiguous language, namely:

“The launch of Windows 8 at the end of October also saw the grand opening of the Windows Store. There were more apps in the Windows Store at launch than any other app store at their launch and since then, the number of apps in the Windows Store has doubled.”

Doubled sure sounds impressive, but let's remember the low base from which to double.

Things then get a little ominous with the next sentence from the post:

“A number of apps in the Windows Store have crossed the $25,000 revenue mark”

In the webcast, however, Reller tells a happier story, saying several apps have passed the million-download mark. Given the minimum price for a paid app in the Windows Store is $1.49, that means apps that have passed the million-download mark are probably free.

We make that assertion because at $1.49 just 16,778 paid downloads are required to hit the $25k mark, and if developers had racked up a million in sales Redmond would surely point that out, given the post does say “developer[s] keeps 80% of the revenue they make off downloads for the life of their app.” So even though there are apps that have been downloaded a million times, it seems safe to assume there are no new millionnaires whose fortunes derive solely from the Windows Store.

Perhaps the most revealing portion of Reller's talk offered data on how Windows 8 users are wielding the OS and the Interface formerly known as Metro (TIFKAM), derived from Microsoft's logs.

85%, she said, use the vestigial desktop on the first day. In the first three weeks, the average user adds 19 tiles to the Windows 8 start screen. 25% have added 30. 90% of customers use Charms on the first day they get the product.

Reller also said Redmond has logged “1.5 billion impressions of customers using the home screen.”

That pattern of usage, Reller said, “is as it is intended to be” and users are exploring TIFKAM and learning its ways at decent pace, without frustration.

What's a licence?

To come back to the 40 million licences sold claim, it seems worthy of further inquiry given IDC's most recent PC sales data for Q3 2012, suggests about 87 million PCs were sold worldwide in the last quarter, or 29 million a month.

It's not entirely inconceivable that excitement about Windows 8 saw that number kick up to 40 million for the last 30 days, and that all the sales Reller mentioned are therefore brand new shiny Windows 8 PCs. It's surely more sensible to assume that not all the PCs sold in the 30 days since Windows 8's launch run the new operating system, given the amount of Windows-7-laden inventory in the channel.

That brings corporate licences into the picture, as perhaps Redmond has clocked up a few million Windows 8 sales to big corporate customers even if they are yet to be deployed. If that's the case, Redmond's PR teams are yet to secure permission to publicise the wins, as the Windows newsroom and Windows 8 enterprise case study pages aren't replete with news of such sales.

The 40 million figure therefore looks a lot like an optimistic number compiled from many sources of sales, including OEM sales that may count for financial purposes but could be a long way from deployment or even reaching a warehouse or shelf.

Another nugget of information revealed in the talk is that January will see the launch of Surface tablets running Windows 8 professional. ®

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