Windows

Microsoft means business, but that doesn't mean the consumer market is lost

Microsoft has its sights set on reclaiming consumer market share, while maintaining its hold on the enterprise.

The image of Windows as the stodgy, "all business" operating system that runs boring spreadsheets and database applications while all the "fun stuff" happens on a Mac was the theme of a whole series of Apple advertisements. That conception was visually reinforced by the suit-and-tie clad, glasses-wearing, slightly pudgy PC Guy who was made to look like one of those nice guys who always finish last, in contrast with the hip, cool, young Mac Guy who gets all the girls despite (or maybe because of) his arrogant attitude.

With the iPhone -- and later the iPad -- Apple was obviously appealing to the consumer market with its simplified, pretty interface. The penetration of those devices into the business space came about not so much because they were made for the business user as because of the consumerization of IT trend that has employees bringing their own devices to work.

Of course, Microsoft continues to enjoy a comfortable dominance in server market share; according to IDC the Windows server market share was 71% of all server shipments in the second quarter of this year. In 2010 Exchange Server had a worldwide installed base of 301 million mailboxes and (PDF) was expected to grow to 470 million by 2014. SharePoint is widely deployed and reported to be on its way to being a $2-billion business.

Apple, on the other hand, killed its Xserve line of rack servers in late 2010, announcing that it would (PDF) be replaced by Mac Pros and Mac Minis running Snow Leopard Server, and has only a tiny share of the server market.

In the consumer market, however, Apple has been wildly successful over the last few years. I recently heard some tech pundits advise that Microsoft should concede the consumer space to Apple and focus on the enterprise, much as IBM has done (quite successfully) since dumping their PC business. I disagree, and I don't think giving up on the consumer market is in Microsoft's plans for the future.

Windows Phone is aimed at consumers

Some of those who say Microsoft doesn't have what it takes to win over the hearts and minds of consumers point to the Kin debacle as "proof" of their allegation. The Kin was squarely aimed at nonbusiness users -- in fact, a very specific segment of such users: young people who wanted something not quite as smart (or as expensive) as a full-fledged smartphone but wanted to be able to do social networking and content sharing from their phones.

It made sense in theory, but the omission of some features that were needed to compete with low-cost Android phones disappointed buyers. These included a calendar app, instant messaging support, spellcheck, and, most important, an app store or the ability to otherwise purchase third-party apps to expand the phone's functionality.

In addition, the monthly cost of the service plan required by the carrier (Verizon) was too high for the phone's target audience. With the minimum voice and data plans, kids were looking at a $70/month phone bill -- the same as for a fully functional smartphone. Finally, the Kin was introduced "in between" Windows Mobile and Windows Phone 7, which was expected to be a "real" smartphone. This lethal combination resulted in dismal sales.

Microsoft's stumble with the Kin, however, doesn't mean that they can't make a successful consumer phone. Windows Phone (formerly Windows Phone 7 but now transformed into 7.5 by the Mango update) has received many good reviews and has so impressed some analysts that we have predictions from Gartner that it will overtake the iPhone and Blackberry by 2015.

Some might say that those gains will be overwhelmingly in the business space, but a close look at the current iteration of Windows Phone shows that it's really more consumer-friendly than business-friendly at this point. The heavy social networking integration (an idea that was borrowed from the Kin but implemented more effectively in Windows Phone) and the simplified UI appeal to youngsters and grandma -- perhaps more than to corporate executives. It's definitely not the first choice for geeks, who want more access to the OS and file system and more freedom of choice; Android fills that bill. Windows Phone is competing with the iPhone, and that means consumers come first.

It doesn't mean Microsoft doesn't want the mobile enterprise market, too, and they are moving more in that direction now -- with recent changes to the hardware specs to eliminate the requirement for a camera and new features added by the Mango update that appeal to business users, such as the mobile client for Lync and email server search. I think if Microsoft can capture the imagination of consumers, Windows Phone can successfully make the transition to the business world in the same way the iPhone did. Security is a big issue in enterprise computing, and Windows Phone offers some security advantages.

Windows 8 is likely to appeal to consumers first

One could argue that Windows 8 is all about the consumer. The Metro interface is designed to take advantage of touch-screen technology that's currently found primarily on tablets. And although tablets have started to make some inroads into the business world (thanks again to that consumerization trend), they're still more of a content-consumption device than a content-creation tool.

Consumers do more consumption and less creation than business users, in general. In fact, much of the criticism that has emerged so far regarding Windows 8 comes from those who question how efficient the tile-based UI will be for getting work done.

But even if the Metro/classic desktop combination in Windows 8 turns out to be fine for performing business tasks, it's highly likely that IT departments will be resistant to upgrading networks to Windows 8. Economic factors will make businesses hesitant to upgrade, and it's not just the cost of the new OS. Although Microsoft has promised that Windows 8 will run on any computer that runs Windows 7, in order to have the best user experience with Metro, you need a touch-screen monitor. Most desktops and laptops used in the business world now are not touch-enabled.

In fact, Windows 7 itself may be the biggest stumbling block to the adoption of Windows 8 in the business space. Many, many companies stuck with Windows XP for ten years, and they are just now starting to think about upgrading to Windows 7. Quite a few don't plan to switch even after support for XP ends in 2014. They discovered that the world didn't end and their business didn't fall apart because they didn't have the latest version of Windows running on their desktops, and they may now be thinking that Windows 7 will work just fine for the next ten years. Cost aside, why put users through the angst of learning a whole new operating system all over again after the recent transition from XP to Windows 7?

Consumers, on the other hand, are often far more open to trying something new. And they're looking at upgrading just one or a handful of computers rather than hundreds or thousands -- a much more manageable (and more easily reversible) undertaking. Thus Windows 8 needs to appeal to consumers, and there is every indication that Microsoft knows this and is hoping to make Windows 8 the most consumer-friendly OS yet.

Microsoft is still in the game

For anyone who doubts that Microsoft is still able to market and sell to the consumer market, I have one word: Xbox. As I noted last month in my column on how Microsoft could achieve world domination, the Xbox 360 helped Microsoft attain record revenues last quarter.

When the Xbox was introduced in 2001, it faced tough competition from Sony's PlayStation. But a slate of killer games and some unique features such as a hard drive helped Microsoft gain market share. Then in 2006, Nintendo released the Wii with its distinctive wireless controller. But Microsoft fired back with Kinect. The gaming console is the ultimate consumer product, and Microsoft has proven itself in that realm and continues to do so.

Big picture

I believe those who think Microsoft should abandon the consumer space and retreat into the corporate world like IBM are failing to see the big picture. Luckily, I don't think anyone at Microsoft is listening to them. From what I see, the company has its sights set on reclaiming the consumer market share, while maintaining its hold on the enterprise. Whether and to what degree that happens will depend on many factors -- some of which are under Microsoft's control and some of which aren't -- but I don't think the company is giving up on the consumer market any time soon.

Also read:

About

Debra Littlejohn Shinder, MCSE, MVP is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. Deb is a tech editor, developmental editor, and contributor to over 20 add...

9 comments
Rndmacts
Rndmacts

I don't see Microsoft abandoning consumers or corporate and even see how they can make Windows 8's interface attractive to both. The Kinect box has proven that 3-D movement can be used to control software and unlike the Wii doesn't require the user to have a wand or controller, why not create drivers for Win 8 that allow a Kinect box to be added to a Windows PC and instead of a touchscreen the user manipulates space with gestures. I think this interface addition would give new excitement to Windows both in the home and in the office and would really bring what has been envisaged for the future of computing into the here and now, and the hardware is up to the task finally.

adornoe
adornoe

and do the branding as if each segment had a device designed specifically for them. So, we could have a Windows Business Phone, and a Windows Consumer Phone, both of which are exactly the same smartphone, with the same hardware features and capabilities, but, the difference would come in the support and the available software and security, and the slight differences in the OS to handle the different markets. Business apps would be separated from the consumer apps, and support would come from different divisions at Microsoft.

CharlieSpencer
CharlieSpencer

Didn't HP just decide that was one of the worst business decisions since 'New Coke'?

wizard57m-cnet
wizard57m-cnet

A lot of attention has been paid to the tablet space, especially the iPad, and its estimated 40 million units sold in 12 months. Compare that to the first twelve months that Windows 7 was available, Microsoft sold 400 million licenses, the vast majority to consumers. No, I see Microsoft gearing up for a big push into the consumer electronics area. They have a solid base with XBox and with consumer home computers. Early reports from Windows Phone USERS, not techno-bloggers, are positive for the most part. At the moment, the developer pool for Windows Phone might be the question mark, in regards to numbers of applications. The only gray area I see at the moment is the tablet device area. However, all it would take would be support from a few OEMs in regards to pricing, and from the telecommunications companies in regards to data plans, and the convergence, synergy, and the convenience of having your applications operating on basically all of your devices would make for a strong competitor in consumer electronics.

Mark W. Kaelin
Mark W. Kaelin

The argument is that Microsoft will not and should not abandon the consumer market. Do you have an opposing opinion? On what do you base your argument?

CharlieSpencer
CharlieSpencer

I don't know about you, but I don't want to spend my workday thrashing around like a beached fish. If forced to have a preference, it would be better than reaching across my desk to a touch interface all day, but not by much.

adornoe
adornoe

and many of those are in medicine and hospitals. The standard office environment might not need Kinect, but the possibilities are endless for a lot of other applications.

grayknight
grayknight

that I would like to use a touch screen as it would be actually faster than a mouse, but let's not limit to touch only, or keyboard/mouse only, or kinect only, let's have all these interfaces.

wizard57m-cnet
wizard57m-cnet

and it runs on Windows XP Pro! Not on a tablet, not on a laptop, but on a full desktop, with keyboard and mouse as well! I don't use the touch screen as much as my employees do, I'm faster with the keyboard. The touch screen works quite smoothly though.