Windows 7 Still Lingers and Slowly Upgrading

Microsoft Windows 7 is still seeing around a 23% install base, and upgrades from the now unsupported OS to Windows 10 have slowed down significantly. Amy Hood, CFO for Microsoft, has indicated that China’s health situation and a chip shortage could be contributing factors.

I think, in general, these cycles tend to look similar. But what I would say is this one is certainly more complicated by a number of things that I’ll talk about in a second. What is different about this is there still remains quite a bit of opportunity more than we saw at this point in the prior cycle. A lot of that exists where you would expect it to exist, which is small and medium business segment. Not unusual, but it means that we do have some room to continue to grow and likely means that the curve will look different than last time in terms of its shape.

Now, then you add to it two complicating factors, one of which you brought up, which have been chip supply, which has impacted some of the growth rates over the past bit. And then, the second one which is the supply chain currently in China in terms of bindings and productions. And so those will — and as we’ve talked about, will impact the quarterly results. And so I’m not sure it’ll look like the exact same curve in terms of the prior cycle, not just because we have a little bit more left to go than we have had in prior cycles, but also because it’s been a bit more volatile due to those two issues as we work through them.