Microsoft ‘delighted’ by Windows 11 usage, but what is it?

Redmond surfs the demand for PCs and cloud services, reporting huge profits and revenues.
  • Mark Hachman (PC World (US online))
  • 26 January, 2022 11:16

Microsoft has revealed that about 1.4 billion users use either Windows 10 or Windows 11 every month, providing a powerful on-ramp for the company's own services.

"Three months in, and we are delighted by the response to Windows 11," said Satya Nadella, CEO of Microsoft during the company's fiscal second quarter earnings call with analysts. Microsoft reported that revenue for Windows OEM licences shot up a substantial 25 per cent compared to a year ago, prompted by the sudden surge in PC sales during the pandemic. Commercial PC licences helped the surge, given that they generate more revenue.

Nadella didn't break down the number of users for Windows 11 and Windows 10, respectively, and he used some odd metrics to describe Windows 11's success.

"We are seeing more usage intensity and higher quality than previous versions of our operating system," Nadella said, whatever that means. Microsoft representatives didn't immediately respond to a request for comment.

Nadella did say, that Microsoft Windows captured more market share this quarter, presumably against Apple's MacOS. Otherwise, however, he didn't clarify which OS he was referring to.

Sales of Microsoft's Surface devices also benefited, growing eight per cent after two quarters of negative growth that compared poorly to strong sales at the beginning of the pandemic-fuelled 2020 year.

Overall, Microsoft's More Personal Computing, also known as its consumer/PC business, experienced 15 per cent growth to US$17.5 billion. As it has been for the last few quarters, however, it was Microsoft's Azure cloud business that drove revenue, as cloud services grew 46 per cent. 

Microsoft's Intelligent Cloud business grew more slowly at 26 per cent, to $15.9 billion while revenue in Productivity and Business Processes, which houses Office, grew 19 per cent to $15.9 billion. As a company, Microsoft reported profits that grew 21 per cent compared to a year ago, to $18.8 billion. Revenue also increased by 20 per cent, to $51.7 billion.

Nadella also noted that Windows provides an on ramp for Microsoft's own first-party and third-party services. Since adding coupons and price-tracker services within its Microsoft Edge browser, Microsoft has saved consumers $800 million, Nadella said. 

Edge is tightly integrated into Windows, and doesn't easily allow users to choose another browser. That prompted competitors like Vivaldi to complain that Microsoft was locking in users to Edge. Redmond is testing versions of its browser that allow for more choice, however.

In gaming, Microsoft said revenue grew eight per cent. Hardware revenue grew by four per cent, as consumers chased down Series X and S consoles. Microsoft's subscription service, Xbox Game Pass has more than 25 million subscribers, and saw record engagement this past quarter, Microsoft executives said. Over 18 million users have played Forza Horizon 5, and more than 20 million have played Halo Infinite.

Microsoft also said that more than 270 million users actively use Teams per month. Teams is also tightly integrated within Windows 11, to the point it will automatically load when booting up a PC, unless blocked from doing so.