The Virtuous CIO  

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April 12, 2012 — A Resounding Thud

By this time the media frenzy has pretty much settled down after Microsoft's release of the Windows 8 consumer preview. By this time we can draw some general conclusions from the effort.

This release is very important to Microsoft. The end-user computing landscape has changed radically, even in the short time since the release of Windows 7. The Apple iOS has cut a broad swath through the market, and the sales of personal computers are actually declining. Microsoft intelligently recognizes the market shift, and has developed a strategy to maintain market share. Over the past couple years the people at Microsoft have given a lot of careful thought to an operating system strategy that allows them to embrace tablet computing, yet maintain consistency with their desktop hegemony. Microsoft is clearly attempting to play to their strengths. The desktop Windows code base is the most mature, stable, and well developed body of code Microsoft owns in this space. The Metro GUI, borrowed from Windows Phone 7, is a clever piece of engineering and embodies several novel concepts. The release of the consumer preview shows Microsoft recognizes their situation and is attempting to generate positive buzz in the market.

By playing to their advantages, Microsoft will probably deliver a product that is stable, reliable, and functional (in a very narrow sense of the word). The leadership of Microsoft clearly recognizes they are starting from an unenviable position in this market, and they are trying to minimize risk.

Having said all of this I am now going to go out on a limb and predict the failure of Windows 8. The attempt to merge tablet computing with the desktop is an interesting idea, but ultimately fails to serve either metaphor well. Let's take a look at both sides of this equation.

I think Windows 8 will be a fairly decent tablet operating system. The Metro interface is attractive and appears to be functional. However, the Windows tablet centric computers being prepared by the mainstream manufacturers are overpriced and suffer from Multiple Personality Disorder. I predict that consumers will take one look at these machines, however nice, and immediately run to purchase either an iPad, or a MacBook. Other manufacturers will offer ARM based tablets at a more attractive price point. But, to make money, these tablets will have to be in the same price range as Apple and Samsung. The market has shown that it's impossible to compete with Apple at the same prices. Apple is considered the premium product and the others? Not so much. Survival will be dependent upon Microsoft contracting the Samsung Galaxy disease: it will only survive in the market with data plan subsidies from the cellular carriers.

Further down in the food chain, lower-priced Windows 8 tablets will not be able to compete under Microsoft's current sales model. First of all vendors of android tablets are using a free operating system as opposed to whatever Microsoft is charging for Windows 8 on ARM. Furthermore, Amazon is selling its 7 inch android tablet as a loss leader to bring customers into its Eco-system. Microsoft can only compete in this arena if it is prepared to get into the hardware business itself to draw consumers into its App Store and content store. To succeed at this, Microsoft must be prepared to endure years of losses in the hope that its mobile strategy will eventually catch fire. To be honest, this worked for them with the Xbox. But that was a long shot, and success is not assured in the tablet space, particularly in a market that is rapidly maturing. On the other hand, the original source for the Windows 7 phone interface was the late unlamented Zune, which was an unambiguous failure.

Now, let's talk about the desktop situation. Microsoft has attempted to use the tablet metaphor for the Windows 8 desktop. It lives in uneasy coexistence with elements of the classic Windows legacy. To make things worse there are no clues on the screen to help new users navigate. A combination of mouse gestures, mouse positioning, and frankly odd maneuvering controls the OS. I assume that some consistency has been designed into the interface, but it is not apparent in a cursory overview.

The basic WIMP (Windows, icons, menus, pointing devices) interface has been burned into the tactile memory of hundreds of millions of users over the past 25 years. Consumers were bewildered a few years ago when they rushed to Office Depot to purchase low-cost netbooks, and encountered the Linux desktop. This is a far, far greater change. This will generate a huge amount of consumer resistance to the product.

I suspect Microsoft is counting on young people to start a viral movement towards Windows 8. The young people, whom I have spoken with that have Windows 7 phones seem to like them. But, the generation of young people that slid into the iPod Touch, the iPhone, and then the iPad already had a strong reservoir of goodwill towards Apple. And, this generates brand loyalty. Microsoft does not have this. The college students I interact with have a strong respect for Microsoft Office. But they tend to view Microsoft the company as inept and out of touch.

I'm sitting here tonight playing with a copy of Windows 8, which I have installed in a virtual machine. It is undeniably attractive, clever, and actually pretty stable. But, I cannot expect anyone with modest computer skills to have the patience to spend more than 30 seconds trying to figure the thing out. This thing is a goner.

Everyone agrees that Windows Vista was a massive failure. Even some key Microsoft employees will occasionally admit this in an oblique fashion. The world seems to have forgiven them when Windows 7 turned out to be decent. But, how long can they keep doing this?