180 Million Vista Licenses Mean What?
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News Analysis. Microsoft shipped about 40 million Vista licenses in the second quarter, or 180 million since the operating system's launch. But how many Vista licenses were on new PCs? Not nearly enough. |
I've been planning to get to this analysis for weeks. But vacation, which ends later today, and other pressing news delayed writing. Bottom line: Vista is shipping on more PCs. That said, 40 million licenses shipped doesn't mean 40 million copies of Vista deployed. But you knew that, right?
According to Gartner, computer manufacturers shipped 72 million PCs worldwide during the second calendar quarter. The number includes x86 servers. Manufacturers typically ship a little more than 2 million servers a quarter (2.2 million in the first quarter), presumably the majority being x86 servers. Rounding up to 2 million x86 servers for math convenience, therefore, PC OEMs shipped about 70 million desktops and laptops.
By a simple calculation, Vista shipped on 57 percent of new PCs during the second quarter. However, OEMs account for only about 80 percent of Vista sales, which makes the number of Vista licenses shipping on new PCs to be 32 million. By my estimates, then, 46 percent of computers shipped with Windows Vista during the second calendar quarter.
That's an impressive number that is smaller in larger context. Based on my earlier estimate, Vista shipped on about 37 percent of new PCs from its Jan. 30, 2007, launch through April 30, 2008. How does that percentage look three more months of PC and Vista shipments later?
Between Jan. 30, 2007, and June 30, 2008, PC manufacturers shipped approximately 370 million PCs worldwide, according to published Gartner figures. I reduced the number by 42 million to account for the estimated number of x86 servers shipped and for the first 29 days of January 2007, when Vista PCs were not available for sale. Gartner's numbers were from Jan. 1, 2007, before my estimated adjustments.
Microsoft shipped the aforementioned 180 million Vista licenses during the same time period. The real number of Vista licenses shipped on new PCs is 144 million, assuming 80 percent of sales go through the OEM channel. By my arguably rough estimate, therefore, Windows Vista shipped on 39 percent of new PCs since its widespread release more than 18 months ago.
Neither percentage is great for Vista, but the second-quarter number indicates a changing trend. More PCs are finally shipping with the operating system, and that number is likely to shoot up in the third quarter. On June 30, Microsoft largely removed Windows XP from the OEM channel. System builders can still ship Windows XP through Jan. 30, 2009. Customers can still obtain an XP downgrade license on PCs with Windows Vista Business or Ultimate. But even if the PC is deployed with XP, Microsoft can count a Vista license shipped.
Third-quarter Vista and PC shipments should be quite revealing, but they won't be. With OEMs selling XP as downgrades, there is going to be a ceiling for Vista shipments—a percentage on new PCs that plateaus and slowly rises over time. That ceiling should be one measure of Microsoft's competing-with-itself problem, meaning customers choosing the older Windows XP over Vista. But there's a devil in the details. Microsoft will count a Vista license even if there is an XP license deployed, either by consumer or business, so the percentage on new PCs with Vista should appear much higher than reality.
Another measure of XP's success is how Vista license shipments reconcile with Gartner data on PC shipments. Sixty-four percent of PCs shipped with another operating system during the second quarter and 72 percent since Vista's launch. Based on eWEEK and Forrester Research surveys, Windows XP is that other operating system for most PCs shipped without Vista.
Something else: The figures for PCs shipping with Windows Vista don't reconcile with other data. According to recent eWEEK and Forrester studies, Vista enterprise adoption is between 5 percent and 8.8 percent. IT organizations expect to have as much as 9 percent of their PCs running Vista by year's end—25 months after release to businesses—according to the eWEEK survey. The number only rises to 28 percent in 2010.
Enterprise Vista adoption hugely trails the percentage of PCs shipping with the operating system. That's without factoring in the 20 percent of operating system sales through volume licensing.
In the Forrester report with the 8.8 percent enterprise adoption figure, analyst Thomas Mendel described Vista as the "new Coke." What happened to the old Coke? It became the new Coke. Enterprises subscribing to some Microsoft volume-licensing plans, mainly the Enterprise Agreement, are allowed to use downgrade licenses to Windows XP. That's Microsoft's Old Coke, New Coke situation: Most businesses strip off many of those 180 million Vista licenses and reimage PCs with Windows XP.
So, to answer the question: 180 million Vista licenses mean what?
- More PCs are shipping with Windows Vista, and that number could easily top 60 percent during the third quarter.
- But enterprises only expect to have 9 percent of their PCs running the operating system by the end of the year.
- It can then be inferred that, at least for enterprises, the majority of Vista licenses shipped on their new PCs aren't necessarily deployed.
- Microsoft's Vista gains through the OEM channel aren't transferring into enterprise deployments.
What data I'd like to see: the number of XP licenses shipped on new PCs and deployed by enterprises during the second quarter. Could you tell us all, Microsoft? I don't expect an answer, so could you tell us? If you're an IT manager, could you share by e-mail or in comments what percentage of new PCs you deployed with Windows XP and also Vista?
[Please send your tips or rumors to watchtips at live.com].
Related Posts:
- Vista PCs: These Prices Are Insane!, Microsoft Watch, Aug. 5, 2008
- The 'Forrester Experiment,' Microsoft Watch, July 28, 2008
- Vista in Enterprise: Boom or Bust?, Microsoft Watch, July 24, 2008
- Vista: Victim of Enterprise Malaise, Microsoft Watch, July 17, 2008
- Vista: DOA in the Enterprise, Microsoft Watch, July 15, 2008
- Eight Things About Windows 7, Microsoft Watch, May 29, 2008
Comments (18)
I personally think that Vista will gain in the enterprise once application compatability improves. My job is proof, as one reason we're holding off on Vista is because we're still tied to AutoCAD 2005, for several reasons. And we're on Exchange 2000 I think... So all that incompatibility really adds up.
Does Microsoft "think" that Enterprises are quick to upgrade??
@Joe
Been a while since the last post, so I guess you're busy. Still, I wish you had included some nice diagrams or pictures into this article. Diagrams and charts would be very helpful for all the number-ing.
Posted by ZzarkLinux | August 12, 2008 4:38 PM
I imagine MS knows the number of XP vs Vista update requests on or just after a patch tuesday and that gives a pretty good idea of relative XP/Vista market share.
Too bad there isn't a way to monitor a central internet trunk to measure this independently. Perhaps AT&T/Verizon/AOL or someone would help? They don't seem to mind spying on customers.
Posted by smist08 | August 12, 2008 5:34 PM
Percentage new computers deployed with Vista: zero
We replace Vista with XP SP3 on every new machine we purchase. Will continue to do that for the next two years at least. We're skippping Vista completely.
Posted by Andrew | August 12, 2008 6:20 PM
Sure MS can claim to sell that many, but most of them have been replaced by XP or a different flavor of Linux....as I did.
Posted by Duke | August 12, 2008 9:02 PM
@Duke :
I couldn't buy a naked notebook w/o Vista.
So count another one paved over by Linux.
Posted by n0neXn0ne | August 12, 2008 9:27 PM
With XP now essentially withdrawn from sale and only allowed on low powered devices we will see that figure rapidly escalate to 100% of Windows based PCs.
Microsoft have it all under their thumb.
Posted by Bernie | August 13, 2008 1:32 AM
Hi,
I work in a Company, www.reimage.com, that has a lot of customers that are worried about the lack of Microsoft XP support and feel that their hand is forced to upgrade to Vista.
Our support product is considered a viable alternative to upgrading to Vista as our technology automates the operating system's repair. It just may help you to avoid that nasty Vista upgrade.
Hope it helps! :-)
Posted by Jason Rain | August 13, 2008 4:45 AM
It still goes back to the case that few consumers are rushing out and saying, "I've gotta have Vista." They are now forced to accept when buying new equipment.
Posted by just-a-drone | August 13, 2008 9:01 AM
@Jason Rain:
I'm impressed. I didn't know about Reimage.com -- I'll have to keep it in mind for future reference. Thanks.
Unfortunately, Windows continues to rule. Whether it's XP, Vista, or Windows 7, we won't be getting out from underneath Microsoft's thumb any time soon.
But Linux is fast becoming a viable alternative for IT, Apple's Mac less so. They will continue to chip away at the corporate Windows market. Microsoft has plenty of reason to worry.
Posted by Richard | August 13, 2008 9:15 AM
Enterprise was slow to adopt Windows XP, so it's no surprise that they are slow to adopt Vista. In the mean time, Vista-preinstalled dominates the consumer market.
Posted by JohnJ | August 13, 2008 9:27 AM
I am waiting for the MS wags to explain this one away. You would think that by the way they talk you should be seeing Vista all over the place. However, I have only met two users with heavy IT experience using Vista (and they don't like it). My company is only deploying XP right now. We just don't have the resources this year to replace thousands of PCs just to deploy Vista.
Posted by JM | August 13, 2008 10:36 AM
Three laptops with Linux here, one of them was Vista. For Linux fans..the Addlogix USB Network G Adapter works with Ubuntu 8.04 quite nicely with those older PIII laptops with the 256 MB Ram limit.
And if anyone is interested, those Pentium II laptops with 64 meg of ram....DSL Linux runs quite nicely on them. The Network LAN adapter will work, where Windows 98 SE never could find the internet with the same adapter on that same computer.
Sudo -s
Posted by Ralph | August 13, 2008 3:17 PM
Joe,
Our company has roughly 7000 workstations on a 3-year (or so) lifecycle. That means that we have replaced about half of them since Vista's release.
What do we have deployed?
Number of Vista workstations (excluding lab toys, just to see what it's about) - Zero
Plans to try to deploy Vista - None.
Deferring the problem of enterprise migration and compatibility issues until we're forced to deal with it (likely when hotfix support ends for XP or when we can't get new hardare to work with XP) - Priceless..... :)
Posted by Jeff | August 13, 2008 4:14 PM
Joe,
One more thing....
Number of workstations where we have paid for Vista licensing - all of them.
Gotta love EA agreements.....
Posted by Jeff | August 13, 2008 4:28 PM
180 million... Pretty good for inferior product like Windows Vista.
Posted by SV | August 14, 2008 4:49 AM
I've been using and deploying Microsoft products since Windows 3 and NT 3.51, and I've always told people that the problems with Windows will never get better, only worse - security violations , viruses, vulnerabilities, crashes, data corruption, and outright bizarre behavior, etc. But they get suckered in by the Microsoft Marketing Machine, and then complain about the support and maintenance costs that appear after a short while (which MS told them wouldn't happen). As a consultant I'm pretty blunt and tell them that it was their decision to ignore my recommendations and go with the Microsoft's sales guy (often a VAR) and ignore the alternatives.
The company I'm employed with now has it's Production and Corporate systems on Unix & Linux (where we count uptimes in months and years) with only two Windows 2k/2k3 servers (which require monthly forced reboots), no Vista anywhere, absolutely no plan to use. Since many of our Staff are on Mac OSX (including the CEO & CIO) we'll probably move to Mac's and use the PC's in the Lab for Linux testing. We have one consultant with a Vista laptop, and he doesn't like it at all. Money isn't the issue, we just can't waste anymore time with Microsoft's ridicules bullshit. People forget that Microsoft is first and foremost a marketing company, it also sells software, and the bulk of its marketing literature is packed with falsehoods, trickery, and FUD (if you don't believe me take a look at their Clustering "solutions" website, after digesting all that wonderful stuff then read the technical docs for deployment, for anyone experienced with Unix/Linux Clustering and Compute Farms, Microsoft is a joke) - "promise the world, deliver the Winnebago".
Vista is a severe case of the Emperors New Clothes! People just aren't getting suckered anymore.
Posted by Mike | August 15, 2008 12:59 PM
No matter how you look at it, licensed, deployed, XP, Microsoft is raking in revenue from it. The future will be bright for Windows Vista when those Company's or individual decide to take advantage of the OS. I ma not predicting every single PC user on this planet will upgrade to Windows Vista. But it sure is likely that people who have licensed the OS, either through Enterprise Licensing, or just downgrading a Vista installation bought through retail, will see the need for Vista and the new positive experiences it will bring to their work flow. I can understand ZzarkLinux's reason for not upgrading to Vista yet because of AutoCAD, I had to invest in version 2009 to get a working version Vista. But it does not mean that others are not benefiting from the rich capabilities of Vista and what it offers so many.
Posted by Andre Da Costa | August 15, 2008 1:48 PM
Windows XP Still Outselling Windows Vista
http://tech.slashdot.org/article.pl?sid=08/08/07/1854242
quotes: " Hewlett-Packard (HP) was busy smacking Microsoft down — reportedly shipping PCs with a Vista Business license but with Windows XP pre-loaded in the majority of business computers sold since the June 30 Windows XP execution date established by Microsoft — casting a lot of doubt over how many copies of Vista have actually been sold."
Posted by chips | August 17, 2008 11:53 AM