Skip to main content

Windows 8: Too big to flop?

Unlike your typical Apple event, there are very rarely surprises at a Microsoft product launch. Everyone suspected Apple would release a new iPad mini on Tuesday, but the new MacBook, iMac, and Mac mini were surprises.

Compare that to Thursday's Microsoft's Windows 8 launch: The OS had been available as a free download for almost a year, and reviews of the systems had been online for weeks. This was the first time most of the world got to see a working Surface tablet, but the rest of the Windows 8 launch seemed predictable. My only surprise was that I came away from the event predicting Windows 8's inevitable success.

There are two reasons for that assertion. Firstly, although Apple's market share is growing, if you look at the US, it still only has about 13 per cent of the market. Granted, it's an incredibly lucrative 13 per cent, with nearly all of the four figure unit sales, but it is still a minority player. That means Microsoft will continue to dominate the laptop and desktop space, and not just in the US of course. This traditional "PC" market is declining, but people still buy a lot of laptops and desktops.

Microsoft CEO Steve Ballmer said yesterday that there are now "670 million Windows PCs just waiting to be upgraded to Windows 8," while analysts are predicting sales of another 400 million new PCs in the next year. Most of those new PCs "will run Windows 8," Ballmer noted.

And he is right. Windows 8 is the new standard now. Businesses may take a while to jump on board, but Windows is too deeply ingrained in corporate infrastructure to be avoided. (Though I do think that Microsoft may have to seriously rethink how it prices and licenses both its OS and applications).

Given its dominance of the laptop and desktop segment, it is impossible for Windows 8 not to attract many millions of users in the next year. As one Microsoft executive dryly understated: "It is going to sell a few copies next year."

Of course, that won't be enough for Microsoft to grow and innovate. The laptop and desktop markets are in decline, while the mobile segment is ballooning. And this is where Microsoft has been in freefall. In 2008, Windows was running on 70 per cent of all personal computing devices, according to Forrester Research. In 2012, after the smartphone and tablet revolution, Windows is on just 30 per cent of devices.

Windows 8 was designed to solve this problem. It wasn't designed for laptops and desktops, it was designed for phones and tablets. The Metro, Modern, new-style, or whatever you want to call the active tiled interface was taken directly from Windows Phone. Windows 8 wasn't made for your current laptop; it was designed for the weird hybrid thing that you are going to buy next.

Microsoft is soft-selling this transition because it doesn't want to spook conventional users. Indeed, executives will tell you this was all by design. "With Windows 8, we have brought together the best of all worlds, the PC and the tablet, your work and your life," Ballmer said at the New York debut. This simply isn't true.

Trade-offs have to be made. "Having the best of both worlds" is something a salesperson will assure you about, but an engineer will tell you it is impossible. When you are designing a computing interface, you are faced with multiple choices. Some options will work better with a touch interface, others will work better with a mouse and keyboard. When Microsoft hit those crossroads in Windows 8, it chose touch, and given the way things are headed, can you blame it?

App gap

The big sore spot for Microsoft at this point is its paucity of apps. Google Play now has 675,000 and Apple's App Store has 700,000. Microsoft has about 10,000. It clearly has some catching up to do.

But this is entirely normal. Apps are typically the last thing to fall into place for a new platform. Until there are users, there is no incentive for developers to build apps. Up to now, the only users developers could reach were tech journalists and the handful of early adopters who downloaded the preview code. (And we are a pretty broke lot).

As Steve Sinofsky put it, "the Windows Store has more apps than any competing app store had at its opening."

There is no doubt that Microsoft is late to the mobile game, but there is just as little doubt it won the PC game. That comes with all sorts of advantages. Windows generated $18 billion (£11.2 billion) in revenue last year and made $11.5 billion (£7.1 billion) of pure profit. It also has a global user base of 1.5 billion folks. Granted, a billion isn't what it used to be, but it is certainly nice to have when you are playing catch up. Even if Microsoft doesn't quite catch Apple and Google, surely this is enough to make it a strong number three player.

Microsoft has some real challenges ahead of it. Truth is, people are going to be confused by Windows 8 and Windows RT. Windows 8 is a little awkward with a mouse and keyboard, and the touch interface will require users to learn a whole new way of interacting with their devices (see our Windows 8 review here, incidentally). This isn't going to be pretty.

Put aside what you think about a PC today and try to imagine what it might look like tomorrow. What do you see? Touch-based, low-power, actively streaming information, and compatible with thousands of peripherals.

It might look a lot like Windows 8.