Windows 8: Does its 1-month report card read pass or fail?

Image: Microsoft.com
Windows 8's start had Steve Ballmer smiling, but he soon hushed up.

The company's one on-the-record comment came during the developer-focused BUILD conference, which kicked off on October 30, just four days after the official launch of Windows 8. There, Microsoft CEO Steve Ballmer said the company sold 4 million upgrade licenses over the opening weekend, along with "tens of millions of units to our corporate customers who can upgrade when they want to."

Since then, silence.

Four million system sales in three days is certainly nothing to sneeze at, but auxiliary evidence suggests that the blistering pace set by early enthusiasts soon tapered off. Data from the Web measurement firm Net Applications showed that at the end of October, only 0.45 percent of computers were running Windows 8. Windows 7 hit a 2.33 percent adoption during the same time frame in its life cycle—a five-fold-plus difference. On the plus side, Windows 8's 0.45 percent slice of the pie more than doubles the measly 0.19 percent stake that Windows Vista managed to snag during its opening month.

Merle McIntosh, SVP of product development for Newegg—a popular electronics e-tailer with billions in annual sales—recently told ReadWrite that Windows 8 software sales have been "slow going," paired with "slow but steady increases" in hardware sales. Windows 8 "did not explode, as I think you know, coming out of the gate," McIntosh said. He went on to say that Windows 8's launch "doesn't even come close" to Windows 7's numbers.

Consumer confusion over the differences between Windows 8 and the more feature-limited Windows RT have been a slight issue, but not nearly as big a concern as some analysts predicted it would be. "The Microsoft stores are doing the best job of positioning the two products and have the lowest return rates as a result," Enderle says. "Other stores have been mixed. Those that didn’t invest in training are having the biggest problems with returns."

So what's it going to be, a pass or a fail in terms of sales? Again, we don't have enough data to make a decisive call. But you can look at it this way: Considering how many tech pundits and long-time Windows users openly mock Windows 8, beating the early adoption numbers of Windows Vista is actually a win—bittersweet and poignant, but still something that passes as a measure of success.

Enterprise adoption: What enterprise adoption?

Image: Microsoft.com
The Surface tablet seems made for the workplace, but IT ain't biting.

Things don't look much brighter on the business side of the sales story, despite the big numbers Ballmer bounced around at BUILD.

"Windows 8 is seeing roughly half of the interest from IT hardware decision-makers that Windows 7 saw at the same point in its release cycle," Forrester's David Johnson reports. The numbers get even scarier for Microsoft once you dig into the details. Only 4 percent of the companies Forrester surveyed plan to switch to Windows 8 in the next year, with another 5 percent planning to migrate sometime after that. An even larger total—10 percent—replied that they plan to skip Windows 8 entirely.

A torrent of other reports echo Forrester's sentiment. It's safe to say that one month in, Windows 8 is a complete nonstarter in the enterprise realm. That was expected, however, considering that many businesses only recently upgraded to Windows 7, and many more are hesitant to take on the training hurdles associated with Windows 8's modern UI.

Grade: Fail.

Don't panic!

Of course, while Microsoft no doubt hoped Windows 8 would be immediately embraced by a loving public, we can't judge the success of an operating system by its first month on the market. Grizzled Windows veterans often refuse to buy in to a new version before the first service pack is released, and Enderle notes that Windows 8 is still an early release experiencing "typical initial teething issues."

Give it time.

Directions on Microsoft analyst Wes Miller also cautions against reading too much into Windows 8 adoption rates this early in the operating system's lifetime.

"This holiday season is critically important to the success of Windows RT in particular, as well as the lower-end market for Windows 8 tablets," he said via email. "We won’t really know until the new year how well those have done in the marketplace."

Along those lines (and despite his less-than-optimistic talk over at ReadWrite), Newegg SVP Merle McIntosh told us via email that "Sales have met our expectations so far. Currently, the majority of our Windows 8 assortment consists of desktops and notebooks so, naturally, those categories are the strongest right now. Tablets are also doing well, and we expect this category to continue to grow."

McIntosh acknowledges that Windows 8 sales are more likely to slowly build steam rather than explode out of the gate. "Windows 8 is a completely new OS, so it will take a bit of time for consumers and businesses to fully embrace it and move away from Windows 7," he says. "Windows 7 was a very successful product, so there will be some consumers who may prefer that OS for the time being."

That single statement may shed the most light on Windows 8's apparently lackluster adoption rates. People couldn't wait to upgrade away from Vista. Everybody loves Windows 7, which offers a damn near ideal desktop experience. Throwing that excellence out the window to focus on tablet functionality hasn't convinced laptop and desktop users that they need to switch to Windows 8 right now and learn a whole new, fairly unintuitive interface.

Windows 8: One month down, many to go

Image: Microsoft.com
Microsoft is all in with the modern UI and Windows 8—just read the slide.

Newegg expects Windows 8 hardware sales to be a major growth factor for the OS as a whole, and therein lies Microsoft's strongest ace in the hole. Even if the operating system struggled a bit during its first month, the overwhelming majority of all laptops and desktops shipped henceforth will ship with Windows 8 installed. No early adopters? No problem. Windows 8 has legs in the long tail, with the IDC estimating 391.1 million PCs to ship in 2013. "It’s still very early to be calling out any definitive sales trends," McIntosh told us, and he's right.

Sure, Microsoft made some missteps with the rollout of Windows 8, but few of the problems are deep-rooted. As adoption rates slowly grow, the apps are sure to come—and Microsoft is courting developers hard to make sure those apps do come. The Windows Store itself needs some usability tweaking, and that tweaking will have to be done under new management. Possible customer confusion issues should clear up as Windows 8 and Windows RT become more widespread, and businesses will be forced to integrate the operating system into their networks when employees start dragging in BYOD Windows 8 laptops and tablets, even if IT departments hesitate to roll them out whole hog.

Windows 8 may—may—be struggling now, but sheer scale means it will be adopted by many more people. Eventually.

Just don't expect the modern UI to disappear anytime soon. Despite the deep-seated hatred that desktop enthusiasts and usability experts toss the interface's way, Microsoft spent a lot of money creating the cross-platform design in a bid to lure tablet shoppers away from Android and Apple alternatives. Remember that PC sales are sluggish and mobile sales are booming. What's a first-time tablet shopper more likely to buy: A tablet with a completely new operating system, or one that looks like and syncs with with the UI on their home computer?

When you look at Windows 8, you're staring at the future of Microsoft, folks. So you might as well get used to it. In the present, however, Windows 8 still has a few kinks left to work out after a month on the market.

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