How Do 400 Million Windows 7 Licenses Compare Against Windows XP and Vista History?
Steve Ballmer proudly announced that Microsoft has sold 400 million Windows 7 licenses. It's a big number by any measure, but how does it compare to Windows Vista and Windows XP?
It has become a tradition for me that I am looking a bit closer into Microsoft's operating system license shipments every time Microsoft announces a new number with the subtle remark that a certain Windows is the fastest selling operating system ever. I don't know about you, but I never heard Microsoft ever announcing that any of its OSes was not the fastest selling OS in Windows history. Even Vista was, apparently, but we know that Vista wasn't exactly a success which tells us that a big number does not mean necessarily that a particular OS is a big success.
So, do 400 million Windows 7 licenses mean that Windows 7 is a big hit? Let's see.
We need to break this number down and put it in perspective to actual PC sales. Windows 7 launched on October 22, 2009 and has sold, on average, about 20 million licenses per month since then (give or take a few hundred thousand per month to even out the pre-sales event preceding the OS launch in 2009). During those 20 months, the global PC industry sold about 591 million PCs, which means that Microsoft shipped about 68 Windows licenses for every 100 PCs sold (let's forget the upgrades for a moment and take this number as a way to compare sales).
What is particularly stunning about the 20 million-per-month number is the fact that it is very consistent and there seems to almost clockwork in play to achieve those 20 million units. 100 million Windows 7 licenses were sold after 6 months, 150 million after 8 months, 240 million after 12 months and 300 million after 15 months. It is almost spooky. Windows 7 sales may be declining just a tad from the 8 month mark, but it's not significant.
Windows Vista, in comparison, sold 128 million licenses in 9 months, or 12 months, if we include the 3-month Express Upgrade cycle that enabled Microsoft to make the 2006/2007 holiday season (Vista was officially released to retail in January 2007, but was available through a coupon beginning in October 2006). So, a fair comparison would be that Vista sold just over 10 million units per month in the first year. Microsoft then announced 180 million units in August 2008 or 19/22 months after launch, which dropped the average to about 8 million units per month: interestingly enough, that means that Windows 7 has outsold Vista already as Windows Vista sold 384 million licenses in a best case scenario (48 months * 8 million units) until it was discontinued in October of last year.
In its first year Microsoft sold about 88 million retail copies of Windows Vista and an additional 40 million licenses. According to Gartner, 271 million PCs were sold in 2007. Those 128 million Vista units closely compare to those shipments (yes, there are three months that don't match up, but I am not attempting to do a scientific study here, but it's close enough for the purpose of this article). So, in that situation, Microsoft shipped only 47 Vista licenses for each 100 PC sold and there is the clear indication that Windows 7 is vastly more successful than Vista - not just in absolute numbers, but in a market share view as well. We don't know how many Windows 7 and Vista licenses went into upgrades, but given the fact that Vista could not impact Windows XP's market share, I tend to believe that Vista completely failed in the upgrade market and a good portion of Windows 7 shipments are in the upgrade cycle as XP PCs get old (or really old) and are being replaced (and Vista PCs are upgraded).
But what about XP? There are hardly any numbers available as far as XP shipments are concerned. Microsoft said two months after XP launch that 17 million licenses had been sold and Wikipedia quotes an article at ITworld.com (the article is not available anymore) in which an IDC analyst apparently estimated that 400 million XP copies were in use in January 2006 - or about 50 months after the OS's launch.
Assuming that the analyst was somewhat right, that would put XP sales roughly in the area of 8 million units per month (400 million units divided by 50 months) - or the same monthly volume that was achieved by Vista. The difference, however, is that far fewer PCs were sold during those 50 months than during the 48 months of Windows Vista availability. For example, Gartner estimates that about 132 million PCs were sold in 2002, 169 million in 2003, 189 million in 2004 and 212 million in 2005. With a reasonable adjustment for an extra 2 months to compensate for the aforementioned Windows XP sales period of 50 months, it appears that Microsoft sold about 400 million XP licenses during a time when about 730 million PCs were sold (more than 1.1 billion PCs were sold during the lifetime of Vista.) So, Microsoft sold about 55 XP licenses for every 100 PCs that were sold in this example - if the unknown IDC analyst is right - and excluding any double or retired XP licenses that are canceled out by the statement of "active" licenses.
Of course, these are equations that only loosely relate to each other. What they do tell us, however, is that Windows 7 is in fact a tremendously successful operating system for Microsoft.