Microsoft Goes Back to Start

By Stephanie Blanchard, Digital Editor — May 12, 2013

Innovation often involves significant change, but  some of the biggest misfires involved fixing a wheel when it wasn’t broken. For example, when New Coke debuted in 1985, the public revolted. Why should the populace suddenly embrace a new taste when it had been enjoying the old formula for a century? The major marketing failure resulted in Coca-Cola forced to return to its “classic” roots — Microsoft looks to be in the same boat, with Windows 8 failing to take off as its predecessors had.

Having missed the mobile mark by a mile, the company is seeking to rectify its misstep. Tami Reller, head of marketing and finance, Windows, recently told the Financial Times that “key aspects” of the software will be changed when the upgrade, Windows 8.1 (Blue) is released this year.

It’s not 100% clear what those changes may be. “Unlike a can of soda, a computer operating system offers different experiences to different customers to meet different needs, while still moving the entire industry toward an exciting future of touch, mobility, and seamless, cross-device experiences,” wrote Frank X. Shaw, Corporate Vice President of Corporate Communications at Microsoft, this week on the Official Microsoft Blog. “We are going to keep improving Windows 8, as we do with all our products, making what’s good even better.”

Where to Start?
The biggest complaint against Windows 8, which is designed with a tiled interface for touch screens, is the lack of the old, familiar start button that has been around since 1995. That’s usually followed by: “Who wants to learn a new operating system?” and “I can work faster with a mouse and keyboard!”

Take away the familiarity, and , for the user, it’s equivalent to taking on the unknown, and many would rather not. Only 100 million licenses for Windows 8 have been sold since it became available last year. In comparison, Windows 7 launched in 2009 and sold 100 million copies in six months. (By mid-2012, more than 630 million licenses had been sold.)

Although its Windows division saw revenues of $5.7 billion, during the recent earnings call, Microsoft did not give specifics on how either the Surface Pro or Surface RT hybrid devices factored into the equation. If Samsung’s decision to pull its ATIV Tablet out of Germany and other European markets is any indication, sales couldn’t possibly be that good. (The Windows RT-powered device was only announced in August 2012, and not even launched in the U.S.)

Not in the Enterprise, It’s Not
Unlike Microsoft Office, which according to the Yankee Group is in use by most employees on a daily basis, Windows 8 is not taking over the enterprise. A recent survey by Dell’s KACE systems management unit shows that only 2% of respondents are choosing the new OS for company-wide upgrades from Windows XP. Most, 69%, are going with Windows 7.

When Vista came along in 2007, it was barely acknowledged by IT departments around the world. Over 18 months after Vista’s launch, Forrester Research noted that only 8.8% of enterprise PCs were using it. In contrast, Windows 7 is being readily adopted (48% of enterprise-PCs in 2012, by Forrester Research’s count).

Windows XP, which debuted in 2001, could actually be called the workhorse of corporate America. As late as last year, 38% of enterprise-PCs were still running on the OS. Official support though is ending, April 8, 2014 to be exact. Companies still running on XP will be forced to migrate sooner or later, but it doesn’t look like they are flocking to Windows 8.

Likewise, Windows 8 may have sold 100 million licenses, but how many are actually in use? Licenses sold means just that — it’s included in a device that hits the market — not how many are flying off the store shelves.

Yes, 100 million is a respectable number in and of itself. Google’s Chromebooks which have been available for two years, has barely sold 500,000 units. Surely someone at Google would be ecstatic with such sales figures. However, the web-based Chromebook, which is adequate for Internet apps and not much else, is never going to be associated with the business process. Microsoft IS the business.

Still, some IT leaders are positive about the new OS, specifically for mobile devices. “Windows tablets and convertibles will support the entire Office suite as well as other enterprise client side apps,” said Sue Kozik, Senior Vice President and CIO, Independence Blue Cross, in an interview with Mobile Enterprise. “With their compatibility and transparency for enterprise applications, we believe that Windows enabled tablets and phones will eventually become ubiquitous,” she said.

Back to the Start
Microsoft’s CEO Steven Ballmer called Windows 8 a “bet the company” moment, with a seamless experience across all devices, whether on a tablet, a smartphone, a PC or a television. What the tech giant was not betting on, was user frustration. Consumer psychology research has repeatedly shown that if consumers are unable to easily use a product, they will simply stop using it.

Julie Larson-Green, Windows Chief, announced that the new Blue will be previewed at the end of June. With the PC market steadily declining, it’s not likely to alter the landscape regardless of what changes will be made. However, if Windows 8.1 brings back the start button, the operating system has a better chance of success. For one, it returns the user experience to the user.

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