How Microsoft can save Windows and maintain its iron grip over IT

How Microsoft can save Windows and maintain its iron grip over IT

Summary: How Microsoft used to do business during the last isn't going to carry it far into this decade. Here are some simple steps that the Redmond giant can take to stay relevant in a post-PC world.

TOPICS: Windows, Microsoft

Microsoft is reliant on PC sales to keep not only the dollars flowing it, but also keep the Windows operating system relevant. But PC sales are in a tailspin, and it looks like no one remembered to pack the parachute. This puts Microsoft on track for a world of hurt.

How long can the Redmond, Wash.-based software giant remain a giant in the face of dwindling PC sales and increasing competition from the likes of Android and iOS? My guess is not for long, unless the company takes some swift and serious action.

What sort of action? Here's a list:

Slash the price of Surface hardware

One of the cornerstones to Microsoft's Windows 8 strategy is its attempt to sidestep dwindling PC sales by creating a new demand for Windows in the form of tablets, and key to this is making its Surface hardware a success.

Problem is, nobody is expecting this to happen. While Apple shifted some 14 million iPads last quarter, Microsoft is only expecting to move between 3-5 million Surface tablets this quarter, and this should be a good quarter given that it is a holiday quarter.

What's the answer? Simple -- drop the price.

There's enough room for Microsoft to do this, especially if IHS iSuppli is right and the Surface is more profitable than the iPad.

A Surface RT tablet for $599 (including keyboard) would be a lot more compelling at $499. And given that the bill of materials including manufacturing costs come in at under $300, there's room for this to happen.

Permanently cut the price of Windows 8

Microsoft currently has all sorts of deals and promotions in place that allow consumers to pick up Windows 8 for less than it will cost in a few months.

See alsoWindows 8: Do you need it?

While these deals are good for boosting initial take up, it's only a short-term measure. What would be better is if Microsoft actually priced Windows 8 upgrades at a more compelling level -- maybe not as low as the $19 that Apple charged for the last OS X update, but perhaps closer to $30 -- and kept that pricing for the life of the product? 

Isn't Microsoft losing money? Sure, but remember that if since this is for upgrades, Microsoft is selling to people who have already paid Microsoft money in the past for a copy of Windows, so this low price is allowing them to upgrade at a competitive price. When users buy a new PC, they will pay Microsoft yet again for a new Windows license, thereby starting the cycle once more.

Bring back the Start Menu and Windows desktop

With Windows 8 Microsoft took the arrogant step of imposing big changes on users -- specifically desktop and notebooks users -- by imposing a touch-centric user interface on people who gain no benefit from it. While Microsoft claims the user interface is fast and fluid, usability experts have slammed it, calling it "confusing," and "disappointing" for "both novice and power users."

The solution is an easy one, but involves Microsoft having to admit to its mistake -- bring back the Start menu, and allow users to boot into the Windows desktop rather than the Start Screen.

If Microsoft were to do this -- say in the no-doubt forthcoming first Windows 8 Service Pack -- all the legitimate fears associated with adopting the new operating system on mainstream devices such as desktops and notebooks are eliminated, and Windows 8 becomes Windows 7, only better.

Get serious about Windows Phone

As ZDNet's Zack Whittaker put is so succinctly earlier, "if Windows Phone actually takes off, it'll likely be more by accident than anything else."

I agree with this statement on so many levels. If Microsoft is serious about mobile, in particular the smartphone market, then it needs to get serious and start splashing some serious cash around by doing a number of things:

  • Buy Nokia. Google has Motorola, so it makes sense for Microsoft to have a hardware partner under its control;
  • Focus on a broad range of hardware, ranging from budget to high-level;
  • Focus on aggressive pricing to encourage adoption;
  • Focus on getting developers on board, and keeping them happy.

Clarify the future

What does the future hold for Windows 8? Is Microsoft planning shift to a yearly release model where updates are cheap, or even free? Will tablets be upgradeable?

These, along with a myriad other questions like them about Microsoft's medium-term plans, are worrying people, and putting off both consumer and enterprise buyers.

Bottom line

While Microsoft continues to dominate the PC sector, the ground is shifting underneath it and it seems like Redmond isn't keeping up with the shift from a PC world to a post-PC world. If the company is to maintain its dominance -- and iron grip -- over the IT world, then company has to have to accept that how it used to do business last decade isn't going to carry it far into this current decade.

Topics: Windows, Microsoft

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  • that's bad advice

    take this advice for free as in FOSS:
    Drop windoze in favour of Linux and Android and open up all the software products under GPL v3.
    LlNUX Geek
    • 2013

      Will be the year of the Linux Desktop. I'm sorry... I needed a good laugh, thanks for that.
      Big Sparky
      • Yeah, the year for Linux

        I already bought my Linux for Dummies book (honesty, k); it has five old distros in its back pocket. Got full Debian and Debian Live, got Zorin Ultimate, and in my Amazon shopping cart is a distro bundle os the latest five most popular distros (including Ubuntu 12.10, and again Squeeze). Will try them all, try the various desktops, etc. sometime in 2013.

        I will make my Win98 machines dual boot if I can, else only the XP machines; also, my lone Vista and Lone Win7 I bought at dell auction. For Linux gets me past the UAC problems, so I can do some efficacious file management and burn to DVD (which as you may know, XP can't do). So I can surf and get email, once I can't do that in XP anymore.

        Bought four new, factory-sealed XP Pro OS and SP3 (two retail, two System Builder) so I can buy four more machines if need be, in the future. So gradually as Linux and I mature, I'll migrate to it for everything.

        WHY WAS I SO DUMB TO BELIEVE THAT MS REALLY INTENDED TO IMPROVE? I hated Windows when it first came out, stuck to DOS, only migrated in year 2000 due to a janitor named Jesus finding a Windows computer in the trash and giving it to me. Well, I was meant to learn something.

        And now, I'm meant to move on.
    • No way

      And then, become slaves of "command line linux grand masters". Windows made computer democratic with a simple interface, drop down menus and check boxes. I will not go the Linux way. And by the way, don't try to fool anybody. NOTHING IS FREE!. NOTHING.

      With Windows you pay a fee, but you know what you are getting. Even Windows servers can be setup by non programmers pretty easily. Yes you pay, but then, you are free from IT and grand "Owner of the devine knowledge" that you need to pay on hour basis from simply knowing those magical command lines.

      I own and maintain a small Windows Web server farm of 14 servers. All Dell, all Windows 2008. I am a .net developper but I know very little about networks and server. Windows allows us to do stuff with little knowledge about that. Owning Windows machines, is cheap, reliable and so simple.

      Keep your Linux environnement. I don't need it. Not even a bit.
      • Re

        Your Windows is "free". And you still need to undergo the same rites of initiation with Windows....its just worse because you can't wip out the source code (e.g. for a bash command) when it blue screens.

        .NET is a very garbled mess of a little bit of everything, from what I've seen; I'd rather pick an easy language like say python and do the same thing - put another way, everything in Windows started to make a ton more sense after I'd lived with Linux for a year or so. Your "little knowledge" is actually quit a bit - you kid yourself on how easy it is.
    • Depends on what you mean by Linux

      Free Linux is being deployed in mass, its called Android. Linux has its place, its just not on the desktop for the vast amount of people.
      Rann Xeroxx

    1. If they slashed Surface hardware, it's still junk and nobody would buy it anyhow.

    2. Paying even 15 bucks fo Win 8 is too much, let alone $40. M$ should be paying us to beta test this garbage!

    3. The "Bring back the Start Menu" ship has already sailed. Win 8 is a bust and the consumer world prefers mobile.

    4. If M$ really got "Serious about Windows Phone", it would throw them all in the trash and exit the business altogether. My last Windows Mobile phone was horrible; and M$ royally jilted all Windows Phone 7 users. There is no goodwill left to be had.

    5. I can "Clarify Microsoft's Future" for you: Legacy backend business until the Enterprise fully switches over to the cloud; writing mediocre software for the real mobile players.

    To sum it all up, M$ is terminal. In 5-years, we will have forgotten the company ever existed!
    • Item 1

      If Windows 8 isn't selling at the price MS wants to charge for it, then a price reduction only makes sense. How much of a price reduction would maximize profit is something an economist would have a better idea of than I would.

      Note that this is an *if*. While reports from sources other than MS indicate that Windows 8 isn't doing so well, I have no idea and neither do most ZDNet Talkbackers.
      John L. Ries
    • Not the problems I noticed

      Surface is decent hardware. Being able to drop it and still use it is something other tablets need to work on.

      Windows 8 is stable, production ready, though there is room for improvement, most "real" problems only occur to advanced users doing less than normal things.

      Start Menu is only a problem for people locked into click here to do this. Learn the new spot to click, it actually is a serious improvement from the start menu.

      Windows mobile wasn't so horrible compared to the other phones before the iPhone rage. Windows Phone 7 is still awesome to use compared to Android and iPhone. Not everyone upgrades their phone every 6 months. Windows Phone usage will only increase this next year, as Verizon finally is on board and Microsoft is spending real money on marketing.

      Microsoft runs the cloud already, I build "cloud" systems (web applications) on Microsoft's systems (Windows Server, ASP.Net). And most of Microsoft's money is still in their servers/office product lines.

      It'll take more than twenty years before Microsoft would disappear and that would require Microsoft to not change anything. Microsoft is proving they can change, the "Modern UI" is something no one else has done and it really is a slick interface for getting things done.

        And by the way you always pop up on the boards, you're also probably Microsoft Employee (Place 5-Digit Number Here).

        :0 |
      • "change"?

        "Microsoft is proving they can change"

        New hires aren't enough to offset bad company policy. I agree, M$ can change (and its desirable that it should), but the overall company strategy has to change. Their attitude of definite success, while understandable, has to go.

        Just because they did do something great (metro ui), and made a competitive peice of hardware at a non-competitive price (surface), doesn't mean they can slap it on the rest of the company (windows 7) and call it a success.

        If I were Microsoft I'd have gotten rid of windows 7 side entirely on the surface, and figured out something in metro that'd make it a great point and click os too.

        I'd have then released Windows 7.5 or somesuch as a security upgrade, later in the year (since 'we' were busy prepping metro), optionally charging a modest fee for the upgrade (5-15$).

        As it stands there is simply not much of a reason for any consumer to upgrade yet, and less of one for someone to buy a surface, as great as it sounds: I really like the idea of surface, however (in part due to personal finance/the economy) I simply won't be purchasing one for the forseeable future; maybe in a year and a half?
        • addendum

          ...however if they still haven't fixed metro/7 integration by then I might just be purchasing for the hardware, and flash linux onto it or something.
      • Win 8...

        well balanced comment from gray knight, Mr...

        I have a dual boot suse linus 12.3 and win 8...i had itunes problems with win 8 in the beginning so i deinstalled and installed previous itune works.

        i think win 8 is far ahead than opinion

        i think folks should try to approach win 8 with an open-minded attitude. why not try Linux and Mac alternatively if you have the means...i like Android but i think more deep work need to be done..

      Sounds like someone's bitter.
    • "Flawed" "Rife with compromise" "Severe design constraints"

      "But while Microsoft has called its approach "no compromise," the strategy is, in fact, rife with compromise. The Surface Pro—officially, the name of the tablet is "Surface with Windows 8 Pro"—is neither a tablet nor an ultrabook, but bits of both.

      "The Pro is an ultrabook, only with more severe design constraints," said Ezra Gottheil of Technology Business Research, who covers both Apple-made and Windows-powered mobile devices, referring to the Pro's thin form factor and light weight.

      Customers who simply want a notebook/ultrabook replacement are not the Surface Pro's target. Those users will keep what they have or, when they upgrade, buy another lightweight laptop like Apple's MacBook Air or any of a growing number of Windows-based options. Instead, Microsoft is betting there's a large number of business computer users who need—or at least want—a two-in-one device that serves adequately as both notebook and tablet."

      - In other words, it's not a device employees are going to want. Making the influence of a Windows-based backend less and less "grippy."
    • Why do you bother?

      You hatred for Microsoft clearly prevents you from any objectivity.

      Surface is not junk, it's simply overpriced. I'd happily pick up a Surface Pro if the price were right. I have an Android tablet and I've used iPads. They're fine for what they are, but their capabilities are so constrained as to make them little more than toys.

      $40 is a fine price for Windows 8, but I would agree with the author that they should make that price permanent. Software costs money to develop, programmers need to be paid, they need to work at desks with computers inside buildings. Expect everything for free... and you'll get Linux. Don't get me wrong, I love Linux and always have a system or VM running it for the tasks it excels at, but user friendly and easy to maintain it ain't.

      I'll agree that Microsoft didn't do themselves any favors with the non-upgradeability of WP7. Despite this, I'd be willing to give a Windows Phone a try... if it offered a truly compelling reason to do so. Live tiles are a nice idea, but they're not the end-all-be-all of an OS. An operating system is a means to an end - running applications, not an end in itself.

      Microsoft is certainly not the company it was, but it's far from irrelevant. Even if Windows 8 is an abject failure, they'll still sell hundreds of millions of licenses, and they still have several divisions that are immensely profitable. I would bet their 5 year outlook includes the retirement of Ballmer, and a very successful Windows 9.
  • Too bad MS only has 1 billion dollar division

    Oh wait, that isn't true at all.

    These articles might actually be more interesting if we hadn't had the likes of AKH predicting that THIS was the year MS dies for the last 15 years.

    To admit that MS's best days are behind them isn't damning considering how absolutely incredible MS's best days were. Every company out there would kill to have best days as good as MS's current days, forget about dreaming of achieving what MS achieved in the 90s.

    MS made a horrible mistake by resting on their laurels and letting Apple come in with marginally better versions of MS tablets and smartphones. The good news for MS is that Apple is now making the exact same mistake. iTunes 11 is a UX disaster and iPhone and iPads are boring, completely out innovated by the likes of Surface, WP8, and even Android. This innovation has not yet turned into massive sales but if the market is working properly, MS will be rewarded with the massive sales that they deserve. My Surface has completely changed the way I work, it is THAT much better than my iPad. My Nokia Lumia 920 is a shining example of the new smartphone, making iOS look like an amateur joke.
    • This is more like it

      I suspected that toddbottom5 wasn't the real thing.
      John L. Ries
    • good article

      Could not agree more. Can the forced UI. We are not saying get rid of it, just have a choice. As technology like touch penetrates then the modern UI is ready to roll. It has its place but don't hold me to ransom. Give me an option that does not involve stardock.
      Yes, the price should remain low for upgrades. Reward those who stuck with you especially if the cycle of is reducing.
    • "Steve Ballmer's Nightmare Is Coming True"

      "2. Employees gradually switch away from using Windows PCs for work.

      This trend has not played out that dramatically in 2012. However, British bank Barclays bought 8,500 iPads at employees' insistence this year.

      And a recent survey showed that the iPhone has overtaken RIM as the smartphone of choice for enterprises. As more people get comfortable with Apple's mobile products at work, Microsoft will have to worry about them converting their Windows-based computers to Macs at work, too.

      Microsoft has a plan to combat this but ...

      3. Windows 8 fails to stop the iPad.

      Gulp. It's still early, but every most data points say Windows 8 is not going to make a dent in the iPad.

      -- NPD says Windows tablet sales were "nonexistent" between 10/21 and 11/17.
      -- It also says Windows sales were down 21 percent over that period on a year-over-year basis.
      -- Piper analyst Gene Munster was in a Microsoft store for two hours on Black Friday and saw zero Surface sales.
      -- Microsoft reportedly cut its Surface order in half.
      -- Ballmer said Surface sales were "modest."

      Jay Yarrow, Business Insider