Nadella: 8 Million Business PCs Are Running Windows 10

Following the release of Microsoft's Q1 earnings report, company executives offer an update on Windows 10 adoption in the enterprise and other statistics.

Microsoft, Satya Nadella

Windows 10 is gaining ground in the enterprise, despite lingering concerns from IT pros regarding the operating system's patch process.

During an investor conference call Oct. 23 discussing the company's fiscal 2016 first-quarter earnings, Microsoft CEO Satya Nadella said there were "more than 110 million monthly active devices running Windows 10." Most of the upgrades were driven by consumer demand—Windows 10 is essentially a free upgrade for Windows 7 and Windows 8.1 users—he said, noting that the operating system's brisk rate of adoption is "three times that of Windows 7 over the same time period after launch."

In August, during a gathering of technology press at Microsoft's Redmond, Wash., headquarters, Jim Alkove, corporate vice president of Microsoft Enterprise and Security, said that of the 75 million devices running Windows 10, 1.5 million were enterprise devices.

Increased demand spells good news for Windows developers, Nadella suggested.

"Our stores have seen 1.25 billion visits and developer revenue per download has grown four times since the Windows 10 launch," he said. "Developers are responding to the opportunity, including Facebook," which is readying universal app releases of its namesake app, Instagram and Messenger, he added.

Windows 10 is also lifting Microsoft's search engine, Bing.

The latest version of the flagship OS "is also driving increased usage of other Microsoft services, Nadella said. Specifically, Bing's share is up to 20.7 percent in the United States, and advertising revenue grew 29 percent worldwide, helped by Windows 10 users asking Cortana more than 1 billion questions." Cortana, the virtual assistant technology included in Windows 10, is largely powered by Bing.

Another bright spot is Microsoft's commercial cloud business, which now has an annual run rate of more than $8.2 billion, with revenue growing nearly 70 percent year-over-year. Microsoft's productivity-focused product portfolio is also doing well for the company, said Amy Hood, chief financial officer.

"In Office commercial, revenue grew 5 percent in constant currency and was slightly better than we expected," she said. "We saw broad-based Office 365 seat growth across both large enterprises and the SMB [small and midsize business] customer base." (Constant currency is an accounting calculation that adjusts for foreign currency fluctuations.)

Nadella pointed out that Office 365 has more than 18 million consumer subscribers. "We surpassed 200 million downloads of Office Mobile," he said, a sign that venturing beyond Windows and Mac to iOS and Android was a prudent move. More than a billion to-do lists have been created on Wunderlist, which Microsoft acquired in June, and over a half-billion "people manage their documents and photos in OneDrive," he added.

Not all of the company's products are faring as well.

Dragged down by an underperforming phone unit, Microsoft's hardware business took a hit. "In our devices portfolio, revenue declined 49 percent, and 45 percent in constant currency, mainly due to phone revenue, which decreased $1.5 billion." She attributed some of the decline to lower Surface sales as potential buyers held off on purchasing the Windows tablet until the updated Surface Pro 4 goes on sale.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...