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Windows 7 Is the Fastest-Selling OS Ever...But Who Cares?

We've mentioned this before, but it's been a while, so bear with us. When public companies report quarterly earnings, they love to trumpet "record revenues" as if it's some sort of accomplishment. It isn't, really.

Every company should have record revenues every quarter (measured year-over-year, anyway) because anything short of a record represents a revenue shortfall. And a shortfall could be a signal that the company is in major trouble -- or at least going through perilously tough times. So, chirping about "record revenues" can be a classically corporate, totally overblown, fairly arrogant way of saying, "We still have our heads above water." It's good news, but it's rarely as good as the press release headline makes it sound.

And so it is with new versions of Windows. This week, Microsoft called Windows 7 the fastest-selling operating system in history and announced that the OS had hit the 90 million mark in units sold. Great! But shouldn't every new Microsoft OS be the fastest-selling OS in history at this point? Think about it: Microsoft still has 90-ish percent market share in the OS game, and PC sales tend to increase every year (even in 2009; more on that later). So, each new version of Windows should sell "faster" (that is to say, should move more units in a shorter amount of time) than the last one did.

Remember, Vista was also the fastest-selling OS in history back in 2007 -- according to Microsoft, anyway. And it probably was. Still, within a year or so of its release, Microsoft couldn't possibly run fast enough in the other direction from Vista, which will go down as one of the great tech industry failures of all time (and maybe one of the great product failures, period). So, don't get too excited when Microsoft talks about any version of Windows being the fastest-selling in history. That should be the norm, not the exception. And fastest-selling, as we know, doesn't come close to translating to most-used.

However, we need to give Microsoft some credit here. Windows 7 is an excellent product that has pulled the company out of the Vista doldrums both financially and in terms of reputation. It has surely been a boost for partners, who now have a stronger Microsoft product along with a stronger Microsoft vision and brand to sell. And 90 million is an impressive number at this point in Windows 7's life, especially given that (in all likelihood -- we haven't quantified this), very few users are downgrading from 7 to Vista the way many did from Vista back to XP. Windows 7 is a success, and it'll be Microsoft's next great OS. It's a good thing. Let's establish that now.

Nevertheless, the whole fastest-selling claim is still a tad overblown -- although probably not inaccurate. Granted, the 60 million data point for Vista came from Redmond about six months after Microsoft released the OS. Windows 7, which Microsoft unleashed in October of last year, has been out closer to five months and has already hit the 90 million mark, Microsoft says. But check out the numbers on PC shipments. Gartner says that 271.2 million PCs shipped in 2007, compared to 306 million in 2009 (and 291 million in 2008).

Interestingly enough, the difference between the 2007 and 2009 numbers does come out to more than 30 million -- and 30 million is the difference, Microsoft says, between Vista sales after six months of availability and Windows 7 sales in the same time frame. Now, Vista was available for almost all of 2007, whereas Windows 7 didn't appear until October 2009. (We do realize, too, that not everybody who buys a copy of a new OS buys it pre-loaded on a new PC. But lots of people do.) However, the fourth quarter of 2009 was when PC sales really skyrocketed, which means that most of the computers sold in that time period had Windows 7, not Vista, loaded on them.

Did Windows 7 have an impact on increased PC sales? It's extremely likely that it did. It's a very popular OS among users. But there is a chicken-and-egg argument here. Was it Windows 7 that boosted the worldwide PC market, or did a slightly less horrible economy and a strong fourth quarter for PC sales boost Windows 7's numbers? The answer is likely a little bit of both. But the underlying point here is that nobody should be too excited about Microsoft trumpeting the fastest-selling OS of all time six months into the OS's availability. In fact, if ever a 6-month-old version of Windows is not the fastest-selling OS of all time, Microsoft and its partners should probably panic -- big time.

How impressed are you by Windows 7 sales? How much of a difference has Windows 7 made for your business? Send your thoughts to [email protected].  

Posted by Lee Pender on March 04, 2010