Business After Windows: Why the Microsoft Desktop OS Model is Irretrievably Broken and What the Future Holds, Part I of II

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In 2006, when writing the second edition of In Search of Stupidity, Over 20 Years of Marketing Disasters, I made some observations about the future of Microsoft looked at through the lens of IBM’s fall from the pinnacle of high-tech power through the 90s and early into the millennium.

“…IBM had become too large for anyone to coordinate its various components into a strategic “whole”; the company was simply too big to coordinate the differing agendas of its myriad numbers of divisions, business units, initiatives, alliances, channel, and so on, and so on, into anything resembling a coherent plan. At the end, IBM’s strategic plan had devolved to “grow by 10 percent per year.” Or 5 percent. Or Something. As of 2006, Microsoft was launching or continuing initiatives in the following areas:

  • A renewed push into the small business and personal finance market, an effort that was thwarted by the feds putting the kibosh on an earlier attempt by Microsoft to merge with Intuit.
  • Launch of a renewed assault on Sony and Nintendo with its Xbox system.
  • Announcement of an attempt to create a Microsoft MP3 player to compete with the iPod.
  • Further attempts by Microsoft to make Larry Ellison’s life miserable with a renewed push into the enterprise database with its SQL product line.
  • New initiatives to displace Lotus Notes and Novell’s GroupWise with Exchange.
  • The creation of a new document format that competes with Adobe’s ubiquitous PDF.
  • The development of a new image package aimed at Photoshop as well as a Sparkle, a Flash competitor.
  • The launch of a new antivirus and spyware product that takes direct aim at market leaders Symantec and McAfee.
  • Initiatives into the mobile e-mail market now dominated by RIM, as well as an early stab at VOIP.

The “strategic” goal behind all these initiatives? Grow by 10 percent per year. The strategic plan? Act like a giant maw and attempt to slurp up every $1 billion dollar market in reach in order to continue to fuel growth. The final result of this strategy?

See IBM.

It is now eight years later, and it is easy to judge the success of Microsoft’s various initiatives. Of them all, only the Xbox could be regarded as a success. And this success only leads to the question of whether, in the end, is the delivery of games via optical disks really the future? Looking at all those rail commuters tapping on Flappy and Angry Birds provides a spotlight on the future. In the meantime, while it was thrashing about in search of new markets to consume, the Redmond giant relied on its two comfortable monopolies, Windows and Microsoft Office, to drive revenue and profits.

Microsoft’s linchpin is, of course, Windows. Since 2006, Microsoft, following the 40-year-old on-premise software upgrade model has released Windows Vista, Windows 7, Windows 8, and Windows 8.1. Four upgrades in eight years, only one of which achieved widespread market acceptance. The end result of this product launch cycle broke the Windows release model. Nothing Microsoft can do will save it. The press is currently publishing the normal series of “leaks” and “previews” about what is now being called Windows 10, but any industry observer knows that Windows 10 will be regarded by a huge swath of the market with the same enthusiasm most people extend to a gnat deciding to response on your ice cream cone on a hot summer’s day.

Why Windows 10 Must Be the Last Release Desktop Release (and Really, Windows 8.X Should Be It)

What are the factors driving the death of desktop Windows ? They are:

  • Software as a Service. SaaS competes directly with the traditional on-premise markets and has supplanted them. No new significant on-premise products have been released into the market for years and none will be. SaaS has become the dominant model.
  • Microsoft’s continued refusal to understand the most important computing asset you own is not your software and not your hardware. Instead, it is the personal computing environment you create via your interaction with both. I have just completed my first Sci-Fi/fantasy novel called “Rule-Set.” I give the name “Viron” to this personal environment and describe it thusly:

Viron. Derived from “environment.” A viron is a virtual computing environment that contains an individual’s computing assets in a unified, portable package. The objects contained in a viron include programs, documents, AV files, macros, colors, settings and related items.

A Microsoft Windows reinstallation is always a throat tightening experience (and I say this from intimate personal experience). Any time you buy a new desktop PC, change a major component in your system, or backup up an existing computer and try to restore it to new hardware, the results are completely unpredictable. Windows may reinstall on top of your tidy little viron, or it may crash and burn, requiring an install from scratch. This can take days and people often don’t have the time or patience.

Again, I speak from experience. A few years ago, I custom built a high-performance PC. My attempt to transfer my viron from my existing PC to my new rig failed. For the next two years, my new box sat next to my old, unused, while I scrambled for the time to complete the transition. The various settings and transfer utilities Microsoft does provide are incomplete, inconsistent, and poorly explained and understood. Third party utilities that purport to transfer existing systems to new platforms are also poorly designed and unreliable.

  • The Microsoft Vista and Windows 8 positioning disasters. Vista and Windows 8 are the second and third operating system positioning fiascoes Microsoft has subjected itself to since the development of Windows (Windows 95 vs NT being the first and documented In Search of Stupidity, a book I am positive no one at upper management at Microsoft has ever read. Windows Vista was released just after the second edition of Stupidity. Darn. Well, I am working on the Third Edition.) I don’t want to overstate my case. Had Microsoft nailed both Vista and Windows 8, the desktop model still would have cracked, but the company would have several more years of transition time.
  • The commodization of the operating system. Apple has led the way in this area by no longer charging for Mac OS upgrades. Linux, while it has never been a major force on the desktop, continues to provide additional pressure on Microsoft. And fewer and fewer IT departments regard the cost and agony of enterprise reinstalling worth the benefits and gains. Microsoft XP demonstrates this principle in action, with the company reduced to bribing people to stop using the XP, with limited success as noted in Computerworld:

“Microsoft yesterday began pitching another deal at pry-XP-from-my-cold-dead-hands customers, offering them $100 off a new Windows 8.1 device if they spring for one that costs more than $599.

The article goes on to note that “XP powers 29.5% of all the world’s personal computers, and 32.2% of those running Windows.” Let’s extrapolate this out to Windows 7, the reworked Windows Vista that achieved solid success in contrast to its predecessor’s crash and burn. Are you running Windows 7 on your desktop? How about your laptop? Did you feel any compelling need to upgrade either when Windows 8 was released? How about that tablet interface shoehorned onto a desktop form factor. That was useful, right? Touch screens, you say? Can’t wait to add gorilla arm to your carpal tunnel syndrome if you use a desktop? What about Windows 10? Microsoft finally learned its lesson and you can, in theory, upgrade directly from Windows 7 (at least in theory. A significant portion of the installed base will run into technical problems and be forced to endure a full reinstall. What are the odds that this will work and go smoothly? Will you be feeling lucky that day? And just what combination of features must the product have to make you willing to take that chance? The lack of perceived value from new Windows upgrades also tasks Microsoft with the herculean chore of lugging XP, Vista, Windows 7, and Windows 8 installed bases around while offering no compelling reasons to upgrade. Unless you regard threatening (but nicely, let’s be fair), all those XP revanchists with online doom if they don’t move on, a compelling marketing model.

What about Windows 10? Microsoft finally learned its lesson and you can, in theory, upgrade directly from Windows 7 (at least in theory). A significant portion of the installed base will run into technical problems and be forced to endure a full reinstall. What are the odds that this will work and go smoothly? Will you be feeling lucky that day? And just what combination of features must the product have to make you willing to take that chance? The lack of perceived value from new Windows upgrades also tasks Microsoft with the herculean chore of lugging XP, Vista, Windows 7, and Windows 8 installed bases around while offering no compelling reasons to upgrade. Unless you regard threatening (but nicely, let’s be fair), all those XP revanchists with online doom if they don’t move on, a compelling marketing model.

And just what combination of features must the product have to make you willing to take that chance? The lack of perceived value from new Windows upgrades also tasks Microsoft with the herculean chore of lugging XP, Vista, Windows 7, and Windows 8.X installed bases around while offering no compelling reasons to upgrade. Unless you regard threatening (but nicely, let’s be fair), all those XP revanchists with online doom if they don’t move on, a compelling marketing model.

What Does Business After Windows Look Like?

Several candidates have already appeared. Tablets and smartphone are the obvious choices, but because of their form factors, these devices are normally used to consume information, not drive business. For that, here are some early candidates:

  • The Chrome OS/notebook model, for one. Administrators and students in middle and high school are becoming increasingly interested in this system, and to massive numbers of Millenials, Microsoft Office is a distant, clunky mess tarred by its association with the Baby Boomers. Increasingly, the cool kids use Google or other cloud-base apps.
  • New cloud-based systems, such as SkyDesktop from InfoStreet also point to a post-Windows future. Microsoft should not be counted out. Its Azure initiative has spun out online version of Office, created SharePoint, and other technologies. The problem is that Microsoft’s marketing message and pricing are obscure and hard to understand. The company devotes 90% of time and PR to desktop Windows and Office. It must commit soon to a business world after Windows and the stress this will inflict on the company’s culture will enormous. In part II of this article we’ll look at the new business models and architectures that the post-Windows era will introduce and dig into some of the models we’ll see appearing over the next several years.
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