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.

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TOPICS: Windows, Microsoft
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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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41 comments
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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.
        brainout
    • 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.
      gbouchard99@...
      • 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.
        smaudet
    • 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
  • 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.
    toddbottom3
    • 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.
      ttremeth
    • "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
      http://finance.yahoo.com/news/steve-ballmer-s-nightmare-is-coming-true-181558610.html
      gregv2k
  • Surface is the best Tablet I have used

    My wife and my kids use Windows 8 and they love it. The Surface is always being used, getting movies and music on to it is a breeze. Not to mention being able to access share folders on other PCs in the house. The Surface is is the only tablet on the market right now that is useful out of the box without the need for apps. Need more memory? It's dirt cheap USB flash drives, microSD. Waiting to buy an unlocked Windows phone 8. We will be dumping our iPhones for WP8 as soon as our carrier have them.
    TD_2003
  • Some may argue this bit but I don't think it can be argued right now

    that MS has an IRON grip on IT these days. I would also say and that is a good thing even for MS. If MS is suffering, and I'm not saying it is, it could very well be because of it's past iron grip. In the end I wish MS well for the more competition the better.

    Pagan jim
    James Quinn
    • If every Fortune 500 company now employs iPad in its operations,

      and if Barclays Bank just "kicked open the doors to banking adoption" with the purchase of 8,500 iPads,

      and if the US Military just dropped BlackBerry in favor of iPhone,

      and if businesses around the world are allowing employees to make BYOD choices which significantly favor iOS and Android devices,

      and if major recording artists like Radiohead and Gorillaz are recording full albums on iPad tablets,

      and if businesses such as mine are optimizing their web sites to iOS specs for full access by mobile iOS and Android devices (aka dumping Flash player, etc.),

      then tell me, is there enough evidence to argue whether MS has an iron grip on IT these days?
      gregv2k
  • STOP THE BUGGY TYRANNY, MS

    Charge what you like, MS. I don't fault your pricing, but rather your buggy tyranny. The increasing lack of transparency in the name of 'protection' was a shell game I bought into until your 'protection' cost me three days a week in Windows UPDATE glitches interfering with my operations. Valid copies all, my Windows machines routinely experienced all kinds of glitches after some patch was downloaded from MS. No details of course, or have to run through REAMS of links in reams of KB articles to sift through the jargon and find out you changed features which wrecked your own programs working on my machines (i.e., the certified add-ins for MS Word). But I was merely baffled.

    Now I see the strategy from Day One: you are paranoid about pirating, so you penalize the patient, your customer. YOU are protectionist, it's YOUR protection you think you are guaranteeing. Well, that didn't work for Goulart, it doesn't work when any polity imposes restrictions and tariffs and other trade barriers, and it is fatal to a business using your software.

    No more. I'm outta here. I would have RATHER paid you more for your products, if they didn't cause me so much trouble. I wouldn't be remotely interested in hacking your code; I'd instead write my own. But I don't do code for a living. I do pension accounting and legal work related to it.

    So now, well I got Linux, and it's no longer as arcane as before. I would rather it be priced than free, so I can talk to a real vendor when I have problems. Because, I don't want to hack it or write my own code. But, c'est la vie.

    Staying on XP, not ever moving to Win8 with its upgraded TYRANNY versus Vista and Win7. Will learn Linux and dual boot. Unless and until, you realize that your good customers -- 99% versus the 1% hackers who after all make incompetent pirated copies -- your good customers, are betrayed.
    brainout
  • IT Costings

    Last year we moved over to Microsoft from Linux. Management gave themselves a big pat on their backs for how innovative and amazing their decision was. Now this year those same managers are standing outside the Dept of Finance's doors with hats in hand begging for extra money to pay for the price hikes that Microsoft have just dumped on the Corporations. Microsoft were never an innovative company, and they're just proven once again they're as greedy as heck.

    Oh, BTW. We're now having a staff review to slash jobs to pay for the extra over-heads. Could it be directly related to Microsoft's price hikes, even I doubt it but man its is a badly time coincidence. I'm sure the Labor government have a hand or two in this one as well.
    Spartan-Runner
  • here's my to do list for Microsoft

    1. retire Ballmer and reboot the HR department
    2. make a single flavor of Windows for consumers called simply Windows. Focus it on media, entertainment, internet and ease of use. everything should work and play out of the box. remove any kind of piracy protection and release regular updates for both legit and pirated versions. release also UI enhancements and new features rather than just security updates and patches. forget about major overhauls at every new windows version, just do incremental changes.
    3. make the above Windows dirty cheap: $10 - 20$
    4. gather all the business tools (monitoring, policies, services, IIS, etc) and make them as a plus pack on top of the above Windows aimed at corporate and business needs. the focus here should be security, support and multi user administration. charge a premium for this but give back a handful
    5. buy nokia, release only flagship phones focused on good build quality, battery life and ease of use. even if your app ecosystem is not yet there. that's what made nokia great to begin with.
    6. drop the Surface price and make sure that A. is extremely easy to use for what people do the most on tablets (watch, play, browse, read). B. market it as something easy and cheap to expand instead of something sandboxed. Create a market of accessories for it
    7. make the windows live store the de-facto way of getting apps for the entire windows ecosystem
    8. release an overpowered next-gen xbox console with loads of connectivity options, open it up with lots of APIs and offer incentives for game and app developers to develop for it.
    9. found a proper microsoft university aimed at giving bursaries to talent in any microsoft interest field. hire the resulting talent.
    10. revive internal R&D as something done by small talented teams focused on new products with no traditional top to down corporate structure. if the products are unsuccesful release them for free and open them up to enthusiasts and developers. if the products are succesful, release them.

    there's more, but these are the main points
    deprimat
    • Great post

      All of this would work. I really don't think any of your points can be argued.

      I have a lot of friends whose paychecks read "Microsoft" (or a related agency that supplies workers to Microsoft) and I know all of them deserve to keep their jobs. All of them would agree with your list.

      Unfortunately your list requires forward thinking and innovation and Microsoft has clearly established itself as a tech dinosaur in "me-too!" mode.
      gregv2k
    • .

      Ditto on Balmer ... it's time for him to go.
      roteague
  • How Microsoft can save Windows and maintain its iron grip over IT

    m$ pricing is a calculated risk to avoid cannibalizing its own market. if it will price out of the market its own customer (pc makers), the whole ecosystem will collapse, and m$ will be the biggest loser. besides, it is too early to drop prices considering the market penetration at the moment. as production ramps up the amortized cost of development and production will be evenly distributed to more units and thus lower the cost in the long term. and by that time, other manufacturer will have entered the market to sustain the new paradigm/ecosystem. then market forces will dictate the fair price for each devices, and consumers will be the end beneficiaries.
    kc63092@...
  • But this is about IT...

    IT doesn't buy Windows upgrades. It buys Windows licenses from Microsoft and then installs whatever version it wants on its machines. Dropping the price of Windows upgrades will have absolutely no effect on Microsoft's "iron grip" on IT.

    I'm curious about your Windows Phone advice. First you suggest that Microsoft buy one of the major OEMs and then you say "Focus on a broad range of hardware, ranging from budget to high-level". I suspect that if Microsoft were to buy Nokia, the other OEMs would quickly exit the scene (the WP ecosystem is very different from either Windows or Android, and all of the other WP players are invested in Android-land and probably wouldn't be interested in competing with MSFT/Nok). I think that having many OEMs is key to having a range of hardware choices.

    I'd love to see a wide range of Windows phones. However, in the US, it's hard to get a low cost phone into the picture when a Nokia 920 retails for $99 (with carrier subsidies). Right now, the low cost path is a cheaper phone with WP 7.8. I believe that's what the OEMs will be using to target the developing world. Those phones would be ridiculed in the US and end up being the butt of jokes on the Conan O'Brien show.

    Yes, Microsoft needs to encourage developers on the WP platform. However, that's a difficult nut to crack. The "Windows Phone only has 100k apps" mantra is a canard, but, in some ways, it isn't. No one ever complained with iOS or Android had 50k or 100k apps; that's a very large number. The problem Windows Phone has isn't the absolute number, its the fact that when someone sits down to write an App, they are going to write one for the large ecosystems - which means iOS and Android right now. Microsoft needs to fight hard to gain a clear position in 3rd place (obliterating Blackberry), and then makes sure that it has enough of a critical mass of users to make writing an app for three platforms the natural decision for a developer. Only once that happens will it have a change to get rid of the "there's no apps there" problem.

    The situation for Windows "Metro-style" apps is different. Microsoft has built it, developers will come. A year from now, Windows 8 and Windows RT will have an installed base measured in the 100s of millions, and a well constructed Metro-style app will run on all of those boxes. I have no doubts that developers will write WinRT apps.
    Flydog57