Windows 10's slowing growth: Should Microsoft be worried?

The number of new installs of Windows 10 each day appears to have more than halved since the OS's launch.


Image: Microsoft

When Windows 10 launched in July 2015, Microsoft predicted it would be installed on one billion devices within two to three years.

Today, a few months shy of Windows 10's two year anniversary, the OS is installed on half that original target, about 500 million devices.

Microsoft CEO Satya Nadella said that figure is a milestone for Windows, telling the recent Build conference: "The opportunity for us as developers to have impact on all parts of society and all parts of economy has never been greater."

Yet the rate at which new Windows 10 devices are being added has fallen to the point where the OS may now not hit Microsoft's original one billion target until June 2020.

That slip is the result of slowing growth, with the average daily increase in the number of Windows 10 devices dropping by more than two thirds since Windows 10's 2015 launch, as shown in the graph below.


Image: Nick Heath / TechRepublic

The graph shows the average daily increase in the number of Windows 10 devices during five periods since Windows 10's 2015 launch, based on the figures released by Microsoft.

The effect of that growth slowdown is also reflected in the chart below, showing the number of active Windows 10 devices.


Image: Steve Ranger / TechRepublic

The actual average rate of growth will differ slightly, because Microsoft doesn't provide exact figures for the number of Windows 10 devices, instead releasing either round numbers or 'more than x'.

However, the graph reflects the extent to which growth in Window 10's uptake is slowing.

So should Microsoft be worried? If Windows 10's current growth trajectory were to hold true, or even to worsen, then maybe it should be. It would mean Microsoft would miss by several years its original target of one billion Windows devices by the end of Summer 2018. That timeframe for Microsoft hitting that target was dropped last year, when Microsoft acknowledged it would take longer than expected, due largely to its decision to reduce its focus on making Windows 10 smartphones amid lacklustre sales.

SEE: Windows 10: The smart person's guide

Hitting that one billion target isn't just a point of pride, it's a business necessity. Microsoft faces tough competition from the likes of Google and Apple, with almost 430 million Android and iOS smartphones estimated to be shipped in the final quarter of last year. While the Windows desktop is unlikely to be displaced in the enterprise market, if Windows drops too far behind competing OSes in the consumer space, the platform will become less of a priority for developers designing new software. This hasn't happened yet, but in the UK home market smartphones are now the most popular device for accessing the internet.

Yet there are several reasons why Microsoft may not be too troubled about Windows 10, which it has previously described as the "the fastest growing version of Windows ever released" and is still adding hundreds of thousands of devices each day.

It could be that Windows adoption is currently in a lull between two spikes. Microsoft's offer of a free upgrade to Windows 10 for non-enterprise users ended in July last year, and you can certainly see a significant drop in the rate of increase for Windows 10 in late 2016.

At the same time, most businesses are yet to begin large-scale migrations to Windows 10, with analyst house Gartner predicting that 85 percent of organizations will start a Windows 10 production deployment by the end of this year. A separate survey of IT pros from Dimension Research said that 77 percent of organizations surveyed say they will complete their Windows 10 migrations within the next two years.

Once enterprise migrations get underway, so the growth rate might pick back up. Microsoft also has less riding on the success of Windows than it once did, with Microsoft repositioning itself to sell software and services via its Azure cloud and across a range of platforms, not just on Windows.

Some analysts believe that uptake of Windows 10 will be boosted by the broad spread of devices it will be installed on in the coming years, from single-board computers like the Raspberry Pi to mixed-reality headsets.

"The diversification of Windows 10 devices could have a significant positive impact on adoption, as Windows 10 is used to power non-traditional PC devices, like HoloLens or IoT devices," said Chris Voce, research director with analyst house Forrester.

Voce feels adoption remains strong, and that it's important not to let that original one billion devices target overshadow the success Microsoft has had with Windows 10.

"The mid-2018 target was ambitious, by their own admission, but they wanted to make a bold statement about the prospects for the future of Windows. Windows 10 adoption is still quite good," he said.

Read more on Windows 10