Bill Gates delivered what may be his last keynote at the opening of CES 2008 last week. Overall, it was entertaining, humorous and full of the usual Microsoft hype. There was, however, one statement he made that bears closer inspection and clarification.
During his keynote, Gates claimed that since the initial launch of Microsoft Windows Vista last year, over one hundred million Vista licenses were sold and one hundred million Vista users were surfing the web. On the surface that seems like a huge number and it is, but in a world with an estimated one billion PCs its relevance is not as impressive as he would have us believe.
It may also not be accurate.
Microsoft may indeed have sold 100 million licenses, but to whom? The number of licenses do not necessarily equal the number of computers sold – or the number of end users actually using them.
They report sales of licenses but they are not reporting the rest of it.
Understand that Microsoft sells most of their product through the channel, not direct like Dell (even Dell is drifting away from direct sales). So to whom are they selling these licenses? To distributors, retailers, VARs, System Builders and other resellers. Those numbers likely reflect raw sales to the very individuals and companies who resell them to businesses and consumers. They may have sold 100 million licenses but more than a few of them are still sitting in inventory for resale, not in actual use.
How many licenses are still in the hands of system builders who had to turn around and purchase Windows XP as well because customers are requesting XP on boxes instead of Vista? How many retailers are stuck with copies of Vista on the shelves that won’t move? To educate those who are not aware of the software market, once a reseller purchases those licenses, with a few exceptions they are usually stuck with an albatross if they are unable to resell them.
If a company purchases volume license upgrades, finds out they can’t use Vista and reverts back to XP, too bad. They bought them.
To add to the spin, Microsoft is reporting sales figures of licenses they sold to the vendors in the marketplace, not downgrades of those licenses or returns of PCs from users to the builders and resellers. If a user buys a new PC with Vista and exercises their downgrade rights to Windows XP, does that deduct from number of Vista licenses or add to the number of new XP sales? Don’t bet on the former, because Microsoft is not refunding the money. Whether the user has Vista or XP in the end, they still purchased a Vista license. Clever, no?
As for 100 million users, the company reporting this figure monitored about forty thousand web sites and discovered around 10% of the visitors ran Vista. Indeed. That would not be difficult to achieve if one considers that those percentages are still estimates based on the reader’s assumption that each one is a unique visitor with a unique IP address and visits the site one time. That is not always the case.
The average user who likes a particular site and uses it often will typically visit it frequently. Certain sites that naturally attract Windows users such as Microsoft’s own site will attract more Windows Vista users than users of Ubuntu and OS X.
That figure can have a negative meaning as well. Is it possible the number of Vista visitors to sites is high simply because they are constantly searching Microsoft’s site or Googling around for resolutions to Vista related issues? Hmm. Just a thought.
From the standpoint of someone who is a system builder on the side, I find Microsoft’s numbers a bit incredulous. Then again, I base that on my own experiences with my customers, not theirs. After all, Microsoft’s numbers are not based on sales to end users, they are based on sales to resellers like me. The actual sales to end users tell the real story.
