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Microsoft's focus on Windows 10 upgrades is a mistake

Gregg Keizer | April 8, 2016
The most important customers to Windows 10's success are those who buy new PCs, analyst argues.

But since Windows 10 is essentially PC-only -- Milanesi said Windows tablet sales were flat, and the state of Windows on phones was dismal -- if users aren't engaged with a personal computer, they're not engaged with Windows 10.

And Microsoft should be paying more attention to that engagement.

"While [customers] might upgrade to Windows 10 -- the upgrade is free, after all, if they have kept their software up to date -- they might not be curious enough to experiment and discover," Milanesi said. "This is especially true when it comes to Universal Windows apps. In return, this will create less stickiness to the OS and lower even more the need to upgrade to new form factors like 2-in-1s."

Microsoft is counting on Windows 10 usage to bolster its bottom line through app purchases, ad sales on Bing and service revenue. But sans engagement, that goal may be unattainable.

"The mix still skews heavily to software upgrades. If [Microsoft] had good numbers for new machines they would have certainly mentioned those," Milanesi said in an email reply to questions today. "My point is that looking at how many software downloads there are does not paint the full picture. Microsoft cannot risk to be blinded by software upgrades. If people do not have new machines in their hands, Windows 10 will not make a huge difference long term when it comes to consumers loving Windows, not just using it."

About a quarter of the PC users surveyed by Creative Strategies used a system five or six years old. Of those respondents, 61% said that they had no plans to upgrade their machine in the next 12 months, reinforcing the engagement decline.

But even those with newer PCs lose interest in over time. "There is an increase in managing files and content, but a decrease in social [networking] and editing photos," said Milanesi of consumers with PCs aged two to four years. "You see users doing more at the start but then keeping [to the more] traditional PC tasks [on] the PC, diverting the rest mostly to the phone. This makes engagement even more important for Windows 10."

Microsoft has talked about Windows 10 engagement and cited some statistics on the subject, but not with enough consistency for outsiders to analyze and interpret. At Build, for example, Myerson claimed, "Customers are more engaged than ever before," and touted the statistic of 75 billion total hours of activity logged by Windows 10 users since launch.

While Microsoft has called out hours of activity previously -- in early January it said the OS had logged 11 billion hours during December -- as part of an effort to cast Windows 10 as a service, it had not issued a total number before. That makes it impossible to get a sense of whether usage has been increasing, decreasing or flat when compared with the number of devices.

 

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