Windows 8’s ‘failure’ is still a win for Microsoft

I was in Dubrovnik, Croatia (or King’s Landing for Game of Thrones fans) when Tami Reller, Windows division CFO announced that Windows 8 had sold 100 million licenses. Since I’ve been back in the UK I’ve had a chance to catch up on what the internet thinks, and it’s fair to say Windows 8’s accomplishments continue to divide opinion.

Some pundits claim the big number proves the doubters wrong, and shows Windows 8 is a roaring success. Others, like my colleague Joe Wilcox, argue 100 million is nothing. I have my own view, and it’s somewhere in-between.

100 million licenses sold to date means Windows 8 is a success. But it’s a success for Microsoft’s bean counters, rather than Windows 8. It’s money in the bank for an operating system that a lot of consumers and a fair few PC builders don’t want.

100 million sales is also a number I would expect Microsoft could now comfortably achieve with any operating system -- good or bad.

Windows has been the OS of choice for PCs since the early 90s. The vast majority of PCs from every manufacturer (and by "PC" I use the modern definition, meaning desktop systems, laptops, tablets and hybrids) run on Windows, and to stay relevant most system builders have to offer the latest version, whether they want to or not. They have to follow Microsoft’s lead.

So Microsoft brings out Windows 8 and every PC manufacturer that wants to compete in a tough, stagnant market has to buy licenses for the new OS. They can’t afford not to (sure, they could hold on to Windows 7, but then their systems would appear outdated. They could go with Ubuntu, but most average consumers have never heard of it, nor Linux).

Provided whatever OS Microsoft comes up with works and doesn’t trash the systems it’s installed on, those PC manufacturers are going to buy licenses for it.

It’s like owning a gas station with one supplier. If you want to stay in business, you have to buy your gas from that supplier, even if they change the formula to benefit motorbikes, and car drivers buy less of it (a rubbish analogy, but you get the idea).

The problem with the much discussed 100 million licenses is, of course, that they aren’t actual sales to users. If Windows 8 was a true hit across the board, Microsoft could dazzle us by announcing how many activations it has processed and silence the naysayers. But it can’t do that, because Windows 8 isn’t a hit -- or at least not a big enough one.

By stating it’s sold 100 million licenses (and 60 million before that), Microsoft has made a rod for its own back. By following that up with an activation number that’s less than stellar (my guess would be a still-respectable 30-40 million users), the scope of the operating system’s "failure" will appear greatly magnified.

Oh Blue

By not making them public, Microsoft can’t be thrilled with user numbers, and all of those companies failing to shift PCs with Windows 8 on them can’t be happy either. But that’s OK, because Windows 8.1 (codename Blue) is around the corner ready to save the day.

By switching to a yearly update release schedule Microsoft can make some quick course corrections to appease hardware makers and consumers alike ("we’re listening") while sticking to its guns and keeping touch and the Modern UI as priorities.

Of course the big question is, when Microsoft brings out Windows 8.1 is it going to be a free upgrade? A lot of tech writers and analysts say yes. And certainly if Microsoft wants to overcome much of the negativity that exists regarding Windows 8, that price point is perfect. But no one at Microsoft has confirmed this yet, and personally I think it will be priced cheaply like a Mac OS-style upgrade, which will bring in yet more money for the software giant.


Windows 8 was always a gamble for Microsoft. It’s an operating system with a foot in the past and a foot in the future. There are elements about it that touch fans don’t love, and elements that traditional PC owners don’t want or need. It’s trying to appease -- and appeal to -- two different user bases at the same time. Which was always going to be a tricky feat to pull off successfully at the first attempt.

But the perceived failure of Windows 8 doesn’t, ultimately, matter all that much to Microsoft. What matters is the financial bottom line. Windows 8 has sold 100 million licenses, meaning the operating system will still be viewed as a win on the balance sheet, and a good foundation to build on.

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