Do the math: 175 million copies of Windows 7 isn't that impressive

By simply counting the number of new PCs sold, it's obvious that businesses aren't flocking to Windows 7 in droves

Where's the beef? That's what I want to know.

Last week Microsoft reported amazing results for the quarter ending June 30, 2010. The numbers almost defy visualization: $16 billion in revenue for the quarter, up 22 percent from the same quarter last year; $62.5 billion revenue for the year. Key to the quarter's soaring sales: Microsoft sold 175 million copies of Windows 7 since its release on October 22 of last year.

[ A bright spot for Microsoft: 64-bit Windows busts out. | Ready to take the plunge? Download InfoWorld's Windows 7 Deep Dive Report. ]

Microsoft doesn't break out sales figures -- how many licenses crossed store shelves in boxes; how many came gratis with corporate Software Assurance plans; how many went along for the ride with new PCs. But at seven licenses per second, it's hard to question Windows 7's supremacy.

Or is it?

I was playing with some numbers (Excel is a dangerous weapon for inquiring minds) and something odd struck me. The figures don't add up.

In the push-me-pull-you world of new PC sales, Windows 7 is widely credited with spurring record sales of new PCs. Most of those new PCs come with copies of Windows 7 -- which is why the discrepancy really struck me.

Last week, IDC reported that 2Q 2010 PC sales hit 81.5 million units, up 22 percent from 2Q 2009. Rival Gartner pegs 2Q 2010 PC sales at 82.9 million units, up 20.7 percent from the same quarter in 2009. No matter which number you choose, it's obvious that Windows 7 has driven lots of new PC sales. (Not all of those new PCs ship with Windows 7, of course -- both IDC and Gartner include Apple products in their counts and a handful of netbooks still ship with various flavors of desktop Linux.)

Let's do the math. Gartner says worldwide PC shipments in 4Q 2009 hit 90 million; in 1Q 2010 it was 84 million; and in 2Q 2010, as noted above, the number ran about 83 million. As a rough estimate, I would put worldwide PC sales from October 22, 2009, to June 30, 2010, at about 225 million. Lop off 4 percent or so for Macs, and you're left with 215 million new machines, give or take a smidgen. Many manufacturers started shipping new PCs with Windows 7 installed prior to October 22, but let's give Microsoft the benefit of the doubt here.

Conclusion: 215 million machines out the door, 175 million Win7 licenses sold. Shortfall: 40 million licenses.

Part of the 175 million licenses come from corporate upgrades, but the numbers hint that only a tiny percentage of companies have taken the Windows 7 plunge. Tami Reller, Microsoft vice president and CFO, Windows and Windows Live said earlier this month that there are 570 million business PCs worldwide, and 422 million of them are running Windows XP. If just 10 percent of those PCs had been converted to Windows 7, we'd see an additional 40 million licenses sold. That doesn't even count the shrinkwrapped boxes on store shelves.

The numbers kinda take the steam out of the 175 million figure, eh?

There are two obvious conclusions: A whole lotta new PCs -- certainly 25 percent of the worldwide total, but probably more -- are going out the door without Windows 7. And enterprise adoption of Windows 7 can't possibly be as overwhelming as some would have you think -- quite the contrary.

This article, "Do the math: 175 million copies of Windows 7 isn't that impressive" was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog.

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