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  • Blog, Enterprise IT - Written by on Wednesday, November 28, 2012 13:45 - 38 Comments

    Windows 8 sales disappointing in Australia

    blog It won’t come as a surprise to many, given its drastically altered user interface and mixed reviews, but the news is already bad for Microsoft’s new flagship operating system Windows 8 in Australia. The Sydney Morning Herald has down a round-up article talking to the usual suspects and examining local retail and partner sales of the new Microsoft hotness and found that consumers aren’t exactly flocking to get on the Windows 8 bandwagon. The newspaper reports (we recommend you click here for the full article):

    “In Australia, IDC market analyst Amy Cheah, who has spoken to local retailers, vendors and channel partners as part of her work compiling sales numbers, said Windows 8 take-up was “not as strong as Microsoft would like it to be”.”

    Of course, things aren’t quite as bleak for Windows 8 as many people might think. Unlike with Windows Vista, which despite being perceived as a total flop actually sold pretty well for Microsoft, a number of major Australian organisations have already started trialling or have revealed plans to trial Windows 8 in their operations, and there is a broadly positive view from IT managers and CIOs about Microsoft’s approach of providing manageable tablet/convertible laptops for the enterprise.

    Personally I suspect that the situation on the ground for Windows 8 is a little like the Facebook relationship status ‘It’s complicated’. Microsoft is not backing away from this user interface and merging of its mobile and desktop operating systems, and everyone invested with the Microsoft ecosystem knows they will need to get on board with the new paradigm eventually. There’s a sense of inevitability about the whole thing. Retail sales were always going to be disappointing, but that doesn’t mean Microsoft isn’t achieving its aims with Windows 8: And I suspect that many people just don’t understand the more complex ecosystem game Redmond is playing here. Microsoft seldom wins the first round of battles it chooses to enter. But it almost always wins the war (think Xbox 360, Hyper-V, SQL Server, Windows Server, etc etc).

    Image credit: Microsoft

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    1. Aryan
      Posted 28/11/2012 at 2:03 pm | Permalink |

      Microsoft sure knows how to make profit.

      And I also agree with you that few people understand the ‘platform’ game that MS is engaged in with Windows 8.

      But that last sentence about the areas Microsoft has turned into ‘profits’, really needs to be put into perspective: SQL Server is still a distant third in RDBMS market, behind Oracle’s 11g and IBM DB2. Hyper-V, though having made major inroads in the last year, is also still a distant third behind VMWare and Citrix. Also of note is the rising star (Linux-only) KVM, which if my observations in the data centre market is any indication, is giving all the major players a run for their money. Finally, is Windows Server, which again, while successful beyond many people’s expectation, only has a 36% marketshare globally, and most of that is at the lower-end of the server market.

      I think Delimiter’s over-estimation of Microsoft’s success in these markets is mostly a reflection of its main focus (and familiarity) with the SME market, which is much more Microsoft-focused than bigger Enterprise players. Finance, Insurance, Aviation, etc are still largely running big-iron Unix boxes with DB2 and Oracle, and where they are moving, they are mostly moving to Linux on Intel Xeons. Microsoft is mostly a distant player in all these markets.

      • Posted 28/11/2012 at 2:11 pm | Permalink |

        You’re right, Microsoft isn’t dominating in some of those areas I mentioned, but it is gaining ground rapidly — and taking chunks off all the players you mention.

        DB2? DB2? I never hear that word mentioned these days, and I do spend quite a bit of my time talking to IT professionals. I do hear Citrix, but not so much in the server virtualisation market where Microsoft is gaining a stack of ground right now. I mainly hear Citrix in the context of application virtualisation.

        As for your claim that Delimiter is mainly familiar with the SME market, frankly I think that is a pile of donkey twaddle. When talking to people who work in IT, I mainly speak to people who work in large enterprise and government departments; the SME segment doesn’t really interest me and I don’t spend a lot of time thinking about it.

        And I assure you that in those markets, almost everyone is looking into how they can do more with Microsoft, not less. Microsoft’s complete software stack only has more momentum every year in large enterprise, while I don’t think many people are deploying new DB2 instances, for instance. Sure, everyone’s running big iron Unix boxes in the back end, but increasingly those boxes are surrounded by satellite Windows Server machines, and Microsoft is trying to displace the big guys.

        You only need to ask “which Unix” to see this phenomenon in action. Everything “Unix” (Solaris, AIX, HP/UX and so on) is gradually being replaced with Linux or Windows at this point. From my point of view there are only a handful of server operating systems that matter these days — and none of them are the traditional old Unix boxen.

        Kind of a rant, but yours was too ;)

        • Aryan
          Posted 28/11/2012 at 2:35 pm | Permalink |

          We must be operating in different worlds/talking to different people then.

          I see heaps of DB2 installations, it’s generally what goes in with WebSphere. IBM’s done a great job of pretending that it’s technology agnostic, while selling buckets of its “bundled” technology stack.

          As for Unix, of course everyone knows that it’s on it’s last legs, but the main benefactor of Unix’s demise has not been Microsoft but RedHat. Nearly every old Unix system that has been de-commissioned has been converted to a RHEL installation (with the occasional Suse installation thrown in by, yet again, IBM). Where I see Windows servers, they are generally either serving up Active Directory, or hosting an Exchange server.

          Speaking of Exchange, that’s one market you forgot to mention, and one that Microsoft has actually ‘won’. Everyone else has packed up and gone home (with Google being the exception, but an exception that doesn’t really count).

          Yeah of course I’m ranting…what else does one end up at Delimiter doing? ;-)

        • Aryan
          Posted 28/11/2012 at 2:57 pm | Permalink |

          For what it’s worth, I tried comparing IBM’s revenue from DB2 vs. Microsoft’s revenue from SQL Server. Unfortunately neither company discloses exactly how much money they are earning from each product, but if you look at the divisions they are in, you can at least compare the divisions.

          Microsoft’s Server and Tools revenue in FY2012 was $18,686M. Server and Tools includes Windows Server, Microsoft SQL Server, Windows Azure, Visual Studio, System Center products, Windows Embedded device platforms, and Enterprise Services. Enterprise Services comprise Premier product support services and Microsoft Consulting Services

          IBM’s FY 2012 isn’t complete yet, so their last annual report is the 2011 one. In that year, IBM’s Middleware division had a revenue of $20,650M. Middleware includes WebSphere, Lotus, Tivoli, Rational and Information Management. (Information Management includes DB2 and Informix).

          While there is no way to compare the two directly, I do think this puts things a bit into perspective. People over-estimate how important Microsoft is. The whole of Windows Server + Visual Studio + Azure + SQL Server + Windows Embeded + Consulting Services can’t match just the revenue that IBM generates from it’s Middleware division.

          • Northern Blue
            Posted 30/11/2012 at 8:26 am | Permalink |

            You’ll get a problem with DB2 revenue due to it being part of the base operating environment on some of their platforms. Some of the Oracle servers a similarly configured I believe.

            As for MS SQL Server – it is everywhere in Health and throughout the SME market in general. If the competition was based on number of licences as opposed to revenue then it would be a mile ahead. Even when you walk into an environment with a central non-windows system you usually find a crop of SQL Server instances running around it. You can literally install into any site with a SQL Server based application and they already have internal support for it.

            Naively, we did offered an Oracle option at one point for our software but by the time we’d converted the business logic to handle their processing requirements (2 months – the real nasty was Oracle treating an empty string as a null!) the primary requesting site had moved completely to MS. The only other site were desperate for us to use Oracle – but that turned out to be because their IT had previously made a dscision to invest in a seriously expensive Oracle box and had the unique situation where all their existing Oracle platform vendor products had switched to SQL Server. So our project was the bunny that got saddled with the Oracle Server expenses to save IT budget embarrassment. Not happy Jan.

      • NPSF3000
        Posted 28/11/2012 at 2:41 pm | Permalink |

        Probably valid, but don’t confuse a lack of absolute market dominance with failure. The xbox for example isn’t that great by pure unit marketshare [IIRC on par with ps3, and substantially less than wii] – but I suspect they’re very happy with it.

        • Aryan
          Posted 28/11/2012 at 3:03 pm | Permalink |

          Xbox 360 has been the best selling console for over two years now. If you take the whole life of this generation of consoles, yes the Wii has outsold it, but Xbox360 has far outsold PS3, and it is in fact getting very close to Wii now. I wouldn’t be surprised if, by the time all three systems are out of market, Xbox 360 turns to have actually shipped more than Wii.

          And let’s not forget that the Xbox360 has a far higher Average Retail Price than the Wii, which means in terms of absolute revenue, it has already been the most successful console of its generation.

          • Stephen
            Posted 28/11/2012 at 3:42 pm | Permalink |

            Your XBox vs PS3 etc are purely Microsofts own and completely denied by everyone else. They also seem to be US market specific. From all other analysis the PS3 has outsold the 360 since release.
            Which is why of course you can never trust analysts figures as they always seem to be working for some one else, they’re hardly independent actors.

    2. Tony Healy
      Posted 28/11/2012 at 2:13 pm | Permalink |

      That SMH article is not really an authoritative reference. It’s just Asher doing the trendy Microsoft bashing thing. Most of it consists of so-called industry figures repeating the stuff they read in the media.

      Mary Jo Foley is today reporting Microsoft statements that they’ve sold 40 million licences in one month, which is about double the take-up rate of Windows 7.

      • Posted 28/11/2012 at 2:22 pm | Permalink |

        True on both counts, but then ZDNet US is also reporting that Microsoft itself is not quite sure about those stats, and I have to note that Vista, which was a complete flop, similarly outsold its predecessor in that period, Windows XP:

        http://en.wikipedia.org/wiki/Windows_Vista#Reception

        • Posted 28/11/2012 at 2:29 pm | Permalink |

          Windows XP was also a steaming pile when it launched. It didnt even have USB support out of the box on release, it was added 8 weeks after in a Windows Update.

          If we’re comparing Apples to Apples, comparing Windows 7 and Windows 8 would be fair considering they’re near on identical outside of the Startmenu.

          • Douglas
            Posted 30/11/2012 at 6:53 pm | Permalink |

            XP had USB 1.1 support out of the box but didn’t have USB 2.0 support until SP1, but otherwise valid points.

      • Posted 28/11/2012 at 2:26 pm | Permalink |

        At $40 a pop for an upgrade, I’m not surprised.

        • Annoying Old Fart
          Posted 06/12/2012 at 2:38 pm | Permalink |

          I have to wonder how many of those 40M licences were upgrades and retail box copies, versus “sales” to OEMs in coercive bundling deals which have been a feature of PC purchasing for decades now…

    3. Posted 28/11/2012 at 3:35 pm | Permalink |

      Having used it a bit more again over the weekend on my best friends new Aldi Laptop (yes yes, not exactly a shining beacon of hardware, but it’s not bad even so) I have to say, I could quite easily get used to it. And I think most people will.

      The fact that sales are low only seems to indicate to me that people are, as yet, unsure of the jump from XP to Win 8, preferring still Win 7. I think Microsoft knew this, as has been discussed before here.

      I’ll be watching closely, but I’d expect the new hardware (Like Lenovo’s Yoga and Asus’ Tai Chi) to be the main driver for Win 8 over the next 12 months.

    4. adrian
      Posted 28/11/2012 at 3:48 pm | Permalink |

      think of windows 8 as vista and windows me was, it a new stinking pile of software crap that microsoft will polish into something useable by windows 9 – much like windows 7 has turned out to be a good solid upgrade option to windows XP and windows 98se

      • Posted 28/11/2012 at 3:54 pm | Permalink |

        Yeah I dont agree at all.

        Theres nothing that SHOULD stop you from going to Windows 8.

        Security improvements? Check
        Stability Improvements? Check
        Drivers the same? Check
        Faster boot and response times? Check
        Faster for gaming? Check
        The GUI? Debateable – can you fix it with a mod? Check – easy 5 minute install.

        Reasons for not upgrading are looking shaky.

        • Harimau
          Posted 28/11/2012 at 6:37 pm | Permalink |

          How do you fix the GUI? Because I’m pretty interested if I get to keep the Win7 GUI.

          • Posted 28/11/2012 at 6:52 pm | Permalink |

            I don’t understand this “fix” thing. There’s nothing WRONG with the GUI. It’s just DIFFERENT.

            If you REALLY want to, you can make it boot into desktop on startup:

            http://www.7tutorials.com/how-boot-desktop-windows-8-skip-start-screen

            Then pin everything to the Desktop that you use, including shortcuts to Control panel etc.

            Otherwise, hitting Windows+D as soon as you boot in, isn’t exactly taxing….

            • Harimau
              Posted 28/11/2012 at 7:53 pm | Permalink |

              It was a deliberate choice of word(s). It wasn’t accurate in a literal sense; instead it was loaded, as it was meant to be.

              Thank you for the link.

        • adrian
          Posted 28/11/2012 at 7:24 pm | Permalink |

          Actually no

          Corporates user training required (lost productivity and costs) – Check
          Compatibility issues with ‘fringe’ software that really makes my business work – check

          The last issue for a number of people will kill it until they get a fix or two.

          • Posted 28/11/2012 at 7:31 pm | Permalink |

            @adrian

            And yet MANY Enterprise sections are trialling Win 8…..

            • adrian
              Posted 29/11/2012 at 4:24 pm | Permalink |

              Trialing yes – implementing maybe in 12 months or so

              Enterprises would be nuts not to try and see – it will be the only way then can elevate there direction moving forward.

              I personal fear the enterprise which take a she will be right attitude.

              • Posted 29/11/2012 at 4:46 pm | Permalink |

                @adrian

                And yet we didn’t here about that many Enterprises lining up to Trial Win 7 when it came out. It’s still only about 50/50 these days with XP.

          • Posted 29/11/2012 at 3:43 pm | Permalink |

            And yet you’ve still got more pros than cons.

            Whats stopping you from upgrading? Personal opinion. You know its better, people outline its better yet you’re holding back for a ‘fix’ thats unlikely to eventuate.

            The Desktop era will come to an end, this is just one (albeit big) step closer to that end.

            The product is near identical in function and form to Windows 7. You couldnt argue otherwise.

            • adrian
              Posted 29/11/2012 at 4:32 pm | Permalink |

              Nothing stopped me – It is running in my test lab as I need to test it with customer applications etc – but since you asked, my first 8 hours of using it was mind numbing, do I like it now – I’m still on the fence on this question.

              with reference to ‘near identical in function’ – maybe so but the user interface is not there.

              • Ray
                Posted 01/12/2012 at 1:04 pm | Permalink |

                Took me 5mins in total to learn the interface, it isn’t that difficult, and i’ve never used it before.

                It’s like the whole ‘ribbon’ complaint people were making with Office 2k7, i found it easier to use than the old file menus, toolbars and other big messes that had been piled into applications over the years.

    5. Tinman_au
      Posted 28/11/2012 at 6:03 pm | Permalink |

      Actually Adrian, Windows 8 isn’t anything like Vista, it’s much, much closer to Win7 without the Aero interface (I hardly even see/use the tiled UI at all).

      I suspect the sales will pick up once people realise that Win8 isn’t the train wreak some people were saying it would be, I know I’ve switched from “Wait and see” to “Give it a go” recommendations since using it for a while…

      • adrian
        Posted 28/11/2012 at 7:20 pm | Permalink |

        You missed the point, in vista and windows me Microsoft went out on a lim and introduced new ideas and technology, Windows 8 is no different. As I said they will continue to polish and get it to a point where in windows 9 people will like it more whan the current acceptance level by the greater comunity.

        • Posted 28/11/2012 at 7:23 pm | Permalink |

          @adrian

          I’d agreer with that on Vista….but not ME.

          ME was nothing but a train wreck. Vista at least had an all new UI and Kernel.

          • adrian
            Posted 28/11/2012 at 7:29 pm | Permalink |

            true cus if they got it right there would be no vista/winxp/7 or 8

          • Tinman_au
            Posted 29/11/2012 at 1:18 am | Permalink |

            Actually, Vista wasn’t so bad once they released SP1 for it….ME was always a dog from what I remember about it, drivers especially had a lot of issues.

            • Mike
              Posted 29/11/2012 at 11:01 am | Permalink |

              For me, ME was the only choice because a lot of the hardware in the PC I had at the time simply wouldn’t play nice with 98. It worked and it worked well (for me).

              Back on topic. I think people probably look at Windows 8 as being their ‘and 1′ in that they’ll skip it for Windows 9. It’s not because Windows 8 is a bad OS but that there aren’t enough compelling reasons for people to migrate from Windows 7 (yet).

    6. Liron
      Posted 29/11/2012 at 2:09 pm | Permalink |

      Many people would have upgraded to Windows 8 Professional via an online upgrade, rather than going to a retailer and paying up to $30 more for a DVD. Did the Sydney Morning Herald take these upgrades into account when doing their research?

      • adrian
        Posted 29/11/2012 at 4:27 pm | Permalink |

        Maybe – but how many people took the attitude it’s $30 dollars and spent the afternoon playing with windows 8 and then removed it?

        $30 can be movie ticket and popcorn, 2/3 slab of beer, dvd or two from the shops, cone of dope – how do you want to spend your afternoon on a weekend?

      • Bob.H
        Posted 30/11/2012 at 11:24 am | Permalink |

        I tried to download an update from MS but after working out that my system could do the job and starting the buy process I found that unless you had an American Express Card or a Paypal A/C then MS weren’t interested in selling to you? I told them what they could do with their sale.

        I will be damned if I am going to pay nearly twice the price for Win 8 update on a 10c plastic disk bought from one of the local big retailers ( read rip-off merchants). Thanks I will wait for Win 9 when I should be about due for a computer upgrade and there might be something even more exciting than the current offering.

    7. Jules (Melbourne)
      Posted 01/12/2012 at 11:02 am | Permalink |

      Hehe I bought Windows 8 Pro for $15 the day it came out – I never thought the day would come!

      I had been using the retail preview for about 6 months before the full Win 8 release and was quite happy with it.

      The start bar really isn’t gone – it has just been transformed into a start screen which is easier to navigate as you don’t have to go through the folders – the end point executable files are there…at the start!

      That is the only real significant change as everything else are just improvements. Very happy with Windows 8 and think people should get over the removal of the classic start bar. There was a YouTube released that had a 3 year old using Windows 8 and when you see it from a ‘fresh’ point of view it just makes so much more sense.

      • Duke
        Posted 03/12/2012 at 12:26 am | Permalink |

        Yep, those 3 year olds are very big in enterprise workplaces these days…




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