My Comments: Why, you may be asking, is Tony Kendzior devoting a blog post to Windows 8. One reason is that Microsoft is a major player in the computer industry and if you are an investor, then knowing what is happening in the computer industry may help you make better decsions about investments.
Another reason is that I switched my office and personal computer over to Apple about three years ago. I doubt that I’ll ever go back to Microsoft except for an application or two that for some unkown reason demand that I use MS Explorer to gain access to. Whoever wrote the application fails to understand that Apple is making significant inroads into the business community. And don’t forget Google’s Android.
And besides, this is interesting and you too may find it so.
By John Gapper | May 8, 2013
In the browser wars that began in the 1990s, it took more than a decade for regulators to stop Microsoft exploiting its dominance with users of Windows software. In today’s mobile battles, customers have done so themselves in six months. Microsoft’s rapid retreat over Windows 8 – the latest, mobile-inspired, version of its operating software – shows wise flexibility rather than its traditional obstinacy. But it also demonstrates that Steve Ballmer, the company’s chief executive, has lost the power to “embrace and extend” the Windows hegemony into new fields.
Nearly three decades of technology history have ended. From the moment in 1985 when Bill Gates released the first version of the Windows operating system for the new IBM personal computer, Microsoft has had a huge entrenched advantage against its competitors. Many of them – from Lotus to Netscape and, for a time, Apple – were flattened.
But that won’t happen to Apple or to Android, the big players in the new world of software for smartphones and tablets. Mr Ballmer’s use of a trusted strategy – to push Microsoft’s latest piece of software on consumers via the Windows desktop – has just backfired badly.
By overplaying his hand, he has spoilt what should be a moment of pride for Microsoft. Windows 8 is widely regarded as a clever piece of software – by no means a repeat of the Windows Vista fiasco. It works reliably and it combines a computer operating system with one for tablets and smartphones, matching Apple’s iOS operating software.
It is also a strategic necessity. Unless Microsoft can somehow thrust its way into mobile computing – a challenge that looks increasingly steep – it will be stuck with its old monopoly in a shrinking part of the market, while the growth is captured by Apple and others.
So far, so good. Had Microsoft launched Windows 8 with the traditional look for PC users and its new tile-based interface for phones and tablets, as it easily could have, all might have been well. It would have kept its existing customers happy while gaining itself a foothold in mobile.
But hubris intervened and it decided to give everyone the mobile interface, no matter whether they were mobile users or – as with 99 per cent of customers – using a PC. They were offered a product designed for another use and, unsurprisingly, they were baffled.
“Windows 8 is a remarkable piece of engineering but the world does not buy remarkable pieces of engineering. It buys useful products,” says Michael Cusumano, a professor at MIT Sloan School of Management. A computer that people do not know how to switch off (it lacks a Start button) and cannot find their way around is not useful.
Far from revitalising a sluggish market, Windows 8 has made things worse – PC shipments fell 14 per cent in the first quarter of 2013 after its launch in October, according to IDC, a consultancy. Windows 7, which rescued Vista, is now installed on two-thirds of corporate PCs and Microsoft has to fix Windows 8 to catch the next cycle.
It is telling that Microsoft has reacted to customers’ resistance to Windows 8 by saying they are using the wrong computers. It hopes that as laptops and desktops with touch screens replace the traditional sort with trackpads and mice, people will learn to love tiles.
This attitude says it all. It would be convenient for Microsoft if, as Mr Gates put it in a CNBC interview this week: “It will be harder and harder to distinguish whether [computers] are tablets or PCs.” Microsoft has been trying to blur the line with its keyboard-enabled Surface tablet, and by persuading PC makers to produce laptops that convert into tablets.
Were it true, Windows 8 would be just the ticket and Microsoft’s dominance would transfer seamlessly to mobile. But, as Mark Anderson, a long-time analyst of the company, wrote last month: “There is absolutely no indication that desktops should have the same operating system and user interface as phones and pads. In fact, the opposite is true.”
Microsoft is wishing away the split between “lean-forward” and “sit-back” devices – between intensive work applications and casual entertainment apps – but it exists for a reason. Apart from anything, it is more comfortable to use a mouse on a PC than to prod a screen.
Steve Jobs, Apple’s founder, could sense what consumers wanted before they did, but Mr Ballmer is trying to make them want something they don’t. “If we soften them up on desktops,” one can almost hear Microsoft’s strategists whisper: “They’ll buy our phones.”
Microsoft’s hardware partners, including Dell and Hewlett-Packard, have also suffered but are complicit. The beauty of Windows 7 was that it was an efficient utility that could be bundled with cheap PCs, offering a rational alternative to Apple’s premium products.
Windows 8 was designed to create an old-fashioned upgrade cycle – a new operating system built for a new set of chips, allowing manufacturers to produce a range of touch devices, with everyone gaining getting higher margins. Consumers were not only confused by Windows 8 but also shocked by the higher prices.
Microsoft hasn’t said how Windows Blue, the update to be unveiled in June, will amend Windows 8. But it is clear what it has to do: give its customers back their desktops, stop trying to force everyone to use touch, and lower prices.
Who is to blame for the setback? Mr Ballmer, obviously, but also Mr Gates, who is Microsoft’s chairman. The pair have worked together since 1980 and Mr Ballmer employed a strategy pioneered by Mr Gates to force the greatest value out of Windows. It just failed.