Economist says that Windows 10 is stalling, but is it, and does it matter?

Economist says that Windows 10 is stalling, but is it, and does it matter?

Whither Microsoft 10? That's what the Economist is wondering, in a somewhat blistering review of rather dismal, if questionable, statistics on adoption of Microsoft's latest and greatest operating system.

The basic contention is that Windows 10's growth has slowed, and that Windows 7 is still dominant:

Suffice it to say that, as far as the breakdown of operating systems is concerned, the trends all point in the same direction. Namely, that Windows 10’s share has inched up several percentage points since the free upgrade ended, while Windows 7’s has remained rock steady and still nearly twice as big. The task Microsoft faces is how to persuade all those Windows 7 fans to dump their friendly old operating system for what is widely perceived to be an overly complex program with a fairly steep learning curve.  ...

For Microsoft, the obvious answer is to focus primarily on getting enterprises to upgrade. Rather than offer incentives, the company has resorted to spreading FUD (fear, uncertainly and doubt) among its corporate customers—as IBM did back in the 1970s whenever customers threatened to desert Big Blue for rival suppliers. Since the start of the year, Microsoft’s corporate users have been warned that, even with security updates, Windows 7 simply does not have the architecture to cope with today’s threats. The remedial work needed to recover from malware attacks can only drive up operating costs. The message to sceptical systems managers: postpone the inevitable upgrade at your peril. 

There's a number of legitimate criticisms in the piece — from Microsoft's slow embrace of ads on the desktop to strong-arm tactics — but the piece also misses that Microsoft has bet heavy on services and, to some extent, where selling Windows isn't critical to the identity of what Microsoft is, at least not as it once was. Now Microsoft's office suite is not just on Mac, but on Android and iOS. As the traditional computing market continues to struggle, Microsoft is boldly forging into chatbots and virtual reality.

And for many users, Windows is now a recurring subscription, not just a purchase. That's understandably not an easy pill to swallow, particularly if you've been a long-time Windows users. But it's a strategy that actually seems to be working quite well: If adoption metrics from a somewhat sketchy analytics company are dismal, Microsoft's service revenues are not.

In its first 2017 quarterly earnings report, Office revenues were up 5 percent, and Azure revenues were up 116 percent. And while Windows 10 isn't free anymore, once you have a licenses Microsoft promises free updates "for the life of the device," largely as a way to fuel other revenue streams and make sure that the challenge with this current migration — somewhat akin to challenges the company faced with Vista — is the last mass migration battle they need to fight.

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