Microsoft CEO Steve Ballmer in January. (Microsoft photo)

Microsoft CEO Steve Ballmer is back in the news, setting tech news sites abuzz this week with the prediction that up to 500 million users — half a billion people — will be running Windows 8 by the end of next year.

It’s a bold statement about the company’s aspirations for the next version of its flagship PC operating system, which will dramatically change how people use Windows.

Except Ballmer didn’t quite say that. We were able to get our hands on this excerpt containing the remarks that prompted the flurry of coverage from Ballmer’s speech this week in South Korea.

“I think there’s also then never been a better time to be not only working with Windows, but there’s never been a better time to be in this industry.  We see a lot of activity here in Korea.  In the last three years we’ve been involved with over 600 startup companies here in Korea and we’ve worked contributing over $60 million of software to help those businesses get off the ground.  And we think it’s that kind of innovation and creativity, applied against the big opportunities, machine learning, form factors, Windows 8, new scenarios that will really power this industry.

“With something like 400 to 500 million users expected in the next year, the best economic activity for people building machines, and the best economic opportunity for people writing applications will be around Windows. And, as we’ve said, from small to medium, to large, to portable, it’s a phenomenal opportunity.”

Reading that, it’s easy to see how the AFP new service (which sparked the flurry of attention) came to the conclusion that Ballmer believes “up to 500 million users will have Windows 8 next year,” quoting from their report.

However, given the way Ballmer actually couched it, it’s going to be hard to realistically hold his feet to the fire on this one. Ballmer appeared to be referring generally to overall expectations for PC sales next year, and it’s significant that he referred to Windows in that context, not to Windows 8 specifically.

The new Windows 8 start screen

Even if 500 million PCs are sold next year, it takes time for a new operating system to ramp up and become a significant part of the market. As Michael Dell explained on his company’s earnings conference call yesterday, “corporations are still adopting Windows 7, so we don’t think there’ll be a massive adoption of Windows 8 by corporations early on.”

Computerworld’s Preston Gralla does a good job explaining why the notion of 500 million Windows 8 users by the end of next year simply isn’t realistic.

In the bigger picture, the more significant question is whether Windows 8 will mark the “rebirth” of Windows that Ballmer promises, as quoted by AFP.

The new operating system is a radical change from existing Windows versions, leaning on web-style “Metro” applications and shifting to a default Start screen that contains tiles similar to those found in Windows Phone and the restled Xbox Live interface.

The traditional desktop is still there, but based on the reaction to the early previews of Windows 8, the changes could cause some users to stay away. (See: ‘Real user’ tries Windows 8: ‘They trying to drive me to Mac?‘)

Microsoft plans to issue a “Release Preview” of Windows 8 next month. The company hasn’t yet announced a final release date for the finished version, but Windows 8 is widely expected to hit the market this fall.

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  • Guest

    Kudos for getting Ballmer’s actual comments. But based on that, Gralla didn’t do a very good job and actually owes Ballmer an apology. 400MM Windows users in the next year is not unreasonable, even with the economic slowdown and tablet disruption.
    Part of the problem is that Ballmer no longer has much credibility with either the media (Gralla, in particular), analysts, or the investment community. That’s deserved imo, but it means few are willing to give him the doubt and are quick to assume the worst, like Gralla did here. That in turn reflects badly on not just Ballmer, but the company, and is yet another reason he has become a liability and should be replaced.

    More important, the numbers out of Dell are concerning. While some of this can be attributed to Dell’s own lack of execution, clearly tablets are disrupting PCs and that doesn’t bode well for MS, either in the short term or especially the longer one. And as Dell accurately pointed out, this is now not just a consumer phenomenon but an enterprise one as well. And that’s where MS, Dell, Intel and others make their highest margin sales. Plus for MS a loss there means losing a high margin Windows license sale, a high margin Office license sale, and very likely various other client access licenses for Server products as well. And having followed/used W8 since its earliest public previews, I can’t say I’m very confident that W8 is going to take much share in tablets. Had it arrived several years ago it might have had a chance. Now it’s simply too late and too far behind. And there’s a real risk that it will alienate PC users, which would be a lose/lose. MS has serious challenges ahead.

    • arcana112

      Lenovo just announced an amazing 35% growth on PC shipments, so the post-pc era will have to wait (my guess: for Win8 tablets).

      • Guest

        I said that some of this was Dell’s own execution. There was no doubt that both HP and Lenovo took share during the quarter. But individual companies taking share != PC sales overall are strong, nor does it negate that we’ve entered a post-PC era where tablets have the momentum and are disrupting traditional PCs and those whose businesses are dependent on them.

      • Guest

        “HP’s Personal Systems Group, which houses its PC business, saw
        zero revenue growth, year over year, and had a 5.5% operating profit margin, HP

  • Scott McDonnell

    My last 2 PCs for home were am Acer desktop for my home office and a Lenova touch screen all in one for the kitchen. Dell and HP just did not have the product at the right price. From my perspective Dell and HP need to do a better job. Also my wife has a Macbook and it really is not the machine that Apple fans brag about – replace battery ($120), Genius bar had to reformat hard drive due to OS failure, locks up periodically, and there is no SD slot so super slow in uploading photos via the USB. So I think Win 8 most likely has a 500m per year future !

  • Guest

    Gotta love the echo chamber. Ballmer is misquoted, the stories go out accusing him of everything from being out of touch to lying, the real quotes come in and are defensible, but most of the stories are never retracted. Even Gralla’s “update” is the weakest possible and accepts no blame for contributing to the “stir”, despite relying on a single-source. Rinse, repeat. Internet journalism at its finest. At least Todd/GW bothered to get the facts.  

  • Guest

    Anything that begins with “Microsoft CEO Steve Ballmer is back in the news”, usually ends badly.

  • Bob

    I’m not a Ballmer supporter, but I don’t see anything wrong with his comments here. This isn’t the “W8 will be great. Bet on it” pitch. He learned not to go there after saying that about Vista and being wrong. This is the “Windows is the largest ecosystem” answer to why developers/OEMs/partners should care and invest.

    Of course the hole is this logic is that developers aren’t stupid. They realize that while Windows sales after 30 years might increase 20-50 million next year to 400 million total, iOS and Android, which didn’t exist five years ago, will add more than 100 million new users each during the year. But since this is the only card that Ballmer is left with, that’s what he’s playing.

  • Win*Disgust

    500m Users? Really? Hmmm. Certainly not converts. A third party has to come up with the functionality that should have been there all along. Although now we no longer click start to Shutdown. By the way I could not conceive of putting finger prints all over my 22″ screen. Ever heard the phrase horses for courses?

  • Win*Disgust

    By the way it would appear the Ballmer has a simply sensational face for radio.

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