Programming Windows: Success (Premium)

Windows 7 couldn’t have arrived at a better time for Microsoft: 2009 was a terrible year for the PC industry and, thanks to its financial reliance on the Windows business, it was a down year for Microsoft too.

One day after announcing that Windows 7 and Windows Server 2008 R2 had reached the RTM (release to manufacturing) milestone in July 2009, Microsoft also announced its quarterly earnings, which sunk 17 percent year-over-year (YOY) because of “weakness in the global PC and server markets.” Even its annual earnings---Microsoft’s fiscal year ran from July 1, 2008 to June 30, 2009---were down, in this case by 3 percent.

The next quarter wasn’t much better: In October 2009, Microsoft reported that its earnings were down 14 percent YOY, though an incredible $1.47 billion---or 10 percent of its total revenues otherwise---were deferred as part of the Windows 7 Upgrade Option program and sales of Windows 7 to PC makers and retailers ahead of the product’s general availability (GA). Were it not for this deferral, revenues would have declined just 4 percent YOY.

But Microsoft had weathered this difficult time with the understanding that Windows 7 would right the ship. And despite it being a minor functional upgrade over Windows Vista---a set of updates the previous Windows organization might have given customers for free---Windows 7 was indeed the cure for Microsoft’s ills. And with most enterprises moving at a glacial pace, they could now prepare massive migrations from Windows XP to Windows 7, skipping the poorly received Vista entirely.

Microsoft was ready to move on as well. And with the Windows 7 launch completed, it did just that. At a mid-November annual shareholders meeting just three weeks later, CEO Steve Ballmer revealed record sales of Windows 7, which he said had “already sold twice as many units than any other operating system we’ve ever launched in a comparable time.”

The software giant also got some good news from the European Commission (EC) in December when it revealed that it had accepted Microsoft’s proposed solution to its anticompetitive product bundling practices in Europe: among other changes, Microsoft would allow PC makers and end-users to disable Internet Explorer and make another web browser the default. But the software giant was eager to put that nightmare behind it too.

During his CES 2010 keynote address in early January 2010, Steve Ballmer claimed that Windows 7 was “the fastest-selling Windows version ever” and “the fastest-selling operating system in history,” with a 94 percent satisfaction rate. But he provided no hard numbers beyond the 300 million PCs sold in 2009---75 percent of which shipped before Windows 7 arrived---and the over 4 million available Windows applications. He also noted that it took 3,000 Microsoft engineers and 8 million beta testers to bring Windows 7 to market.

But the hard numbers would come. And they would exceed everyone’s expec...