In its first year, Microsoft’s Windows 7 has sold more than 240 million copies, thereby making it the fastest selling operating system and helping the software giant in recording profits despite the recent dip in the sales growth of computers.
Despite the fact that Apple Inc’s OS X and Linux based operating systems have won some market share in the past few years, Microsoft still controls almost 90 per cent of the world’s 1.4 billion personal computers, and is now expecting more and more customers to upgrade to Windows 7.
Microsoft’s most lucrative customers, which are about 89 per cent of companies, are planning to use Windows 7, according to Tami Reller, chief financial officer of Microsoft’s Windows unit. In adopting new operating systems, companies tend to lag behind consumers as they have to go through more testing to make sure that they mesh with the existing software.
In the last fiscal year, Microsoft had reported record sales of $62.5 billion, which was a 7.5% increase from the previous year, majorly powered by Windows. Providing more than one-fourth of overall sales and just over half of its profit, the Windows unit is still Microsoft’s core.
In the next few days, Microsoft is expected to report higher fiscal first quarter earnings, but Windows sales (that closely track PC sales) may disappoint investors to some degree.
According to a research from IDC, PC Sales rose only by 11 per cent in the July to September period, as compared to the statistical figure of 22 percent in the three months before that. This was so because back to school shoppers appeared to hold off on big purchases.
Despite these numbers, there is no denying that the new Windows 7 operating system is a huge hit, and it looks set to continue Microsoft’s 90 per cent plus hold on the operating system market. Apart from that, its server and tools business, which sells the services and software that run companies’ computing systems, is now a giant in its own right, despite the profit margins being about half of those in the Windows unit.
Microsoft executives are of the opinion that the future is of cloud computing, which describes the provision of software, data storage and services over the internet.
This drastic change may be a potential threat to Microsoft, as it represents a shift away from software installed on computers towards a more fluid scenario. This in turn brings forth a valid point – why should one pay for and install MS Office when Google Docs can be used for free over the Internet?