Windows 8 is Microsoft’s largest gamble in the consumer space for some time. The company is changing one of their staple products, drastically. While opinions about the change are as varied as the color options for the live tiles, Microsoft is pushing boundaries and is not afraid to step on a few toes along the way.
For Microsoft, Windows 8 is not an OS for yesterday’s hardware; it is a platform for growth and has considerable focus on alternative input methods (touch). Because of this, like a delicious glass of whiskey, the company has had to blend two methods of input to form one complete OS. This approach opens the door for new opportunities but is also a fundamental change for users who are accustomed to the ‘standard’ Windows layout for the past decade. Because of this, Microsoft has several challenges on the horizon that they must overcome for Windows 8 to be embraced on the same scale that Windows 7 has been adopted.
While it is easy to sit around and tear something down and point out the flaws, it is even harder to offer strategic advice and direction for a company. While we would love to say that Microsoft will take this document and use it to lay out the scope for handling these challenges, we suspect (ok, hope) that Microsoft has already thought of these challenges and has their own strategies for climbing these mountains.
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Challenge: Apps
The Apps barrier Microsoft faces is a mind game for many and an even bigger challenge for Microsoft. While it will be easy for Microsoft to tout large numbers of apps in its store, let’s face it, we don’t measure app stores by the number of apps they have, we measure them by what they lack.
Take a look at Microsoft’s Windows Phone Marketplace, that store has over 100K apps but that’s not the measuring stick most people use. The gauge is on top tier apps like Angry Birds, Spotify, Pandora, Twitter and simply having the application is not enough either as it needs vigorous support from the vendor to keep it on parity with iOS and Android. If you fail on having the app on your platform or having weak support for the app (think official Twitter app on Windows Phone), it elicits a negative impression of the underlying platform and product.
Windows 8 will be yet another new marketplace for Microsoft to foster and incubate with fresh ideas and will present new possibilities for entrepreneurs. Fortunately, Microsoft has used its noggin and will have strong parallels between Windows Phone 8 and likely the next generation Xbox to help developers create cross-compatible applications.
One of the bigger obstacles to overcome, though, is convincing developers to build for a platform that has an install base of 0 (preview builds do not count). Asking a company to invest in a new marketplace is a tough task but Windows can rely on its heritage, for now.
Nearly all iterations of the OS have sold hundreds of millions of licenses and there is little reason to believe that will change with Windows 8 but the tough question is why build for Metro when the standard desktop is still present on the desktop install of Windows 8?
:: The current strategy
Microsoft has been quite aggressive at incubating apps for Windows 8 as first impressions on launch day will drive consumer opinions and ultimately adoption. The company has done quite well with offering up tools to budding companies but the key here is for critical players to be ready on launch day such as Spotify, Twitter, Slacker, Pandora, Angry Birds, etc. What Microsoft is doing to court these key developers is a little bit foggy but ultimately, they have to prove that desktop applications are a thing of the past and Metro applications are the future.
Microsoft has also been transparent about building applications for Windows 8 with a series of thesis worthy blog posts and has organized conferences as well. Additionally, they have been open about resources available and how to get help, but what about revenue? Let's face it, devs traditionally make applications to make money and with the expected return on investment with a Windows 8 app unknown, this risk is exaggerated exponentially as the install base is unproven if they are willing to spend for applications through Microsoft's store. It’s one of the big unknowns with Microsoft’s app approach at this time and until we get a firm grasp on user adoption, it will remain an X factor.
:: The aggressive approach
Microsoft needs to prove to developers that Metro applications will make them more money when compared to their current desktop applications. If a company is going to devote resources to a new application, they want a return on investment. Right now, Microsoft can’t guarantee adoption but they should have internal forecasts about their expectations. If they would share this with developers, they could help prove that the expected install base will reward them for their efforts.
As it stands, nearly all the key players have traditional desktop applications, how Microsoft courts them to the Metro environment is going to come back to the ability to drive revenue. If Redmond can nail this marketing approach and get the blood flowing about new and lucrative avenues for revenue from day 1, it could help to attract the de facto applications for their new environment with the long-term support that the consumers expect.
Be aggressive with your policies, cut deals, knock down the 70/30, 80/20 model and reward early adopters for taking a risk. Offer up a 90/10 model for early publishers of applications that Microsoft deems critical for the platform if they are able to meet the Oct 26 deadline. Certainly this could be a time based offer (6 or 12 months) but the long term reward will outweigh the low, upfront margins, for Microsoft.
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Challenge: Enterprise
Microsoft has dominated the enterprise markets for decades, there is no argument here. The Windows OS has been the staple of every cubicle to corner office for longer than some of you reading this have been alive.
With Windows XP, Microsoft made its mark on the industry as the platform was stable, easy to use and most of all, a terrific foundation to build your enterprise around. While Vista was mostly ignored in the corporate environment, Windows 7 is the successor to Windows XP as that platform has been proven to save time and money for corporations and also offers the security enhancements needed for the modern office.
So the question is, why should corporations upgrade to Windows 8 when so many of them have now finally transitioned off of Windows XP to Windows 7?
:: The current strategy
Microsoft is currently utilizing its tried and true method of showing why Windows 8 is superior to Windows 7 as a selling point, this should not surprise anyone. With several notable features such as support for tablets and desktops in one package, faster bootup, same hardware requirements as Windows 7, curated app stores, Windows To Go, and beyond.
Microsoft will certainly come out with benchmarks to show the gains in performance and efficiency with Windows 8 and they have already started to show those metrics with the new Start Screen. This is standard Microsoft practice as they work to obsolete their previous platforms.
But if you are wondering how Microsoft could overcome the Windows 7 barrier, there is one major feature that Windows 7 doesn’t have that Windows 8 does quite well with, touch input. If corporations want a tablet that ties effortlessly into their current environments, a Windows powered product is the logical choice and up to October 26, there have been no real options on this front (ok, so there are a couple but none of them took off).
The only option to get a Windows tablet in to the corporate environment is to use a Windows 8 device which means for corporations who deploy these products; they will effectively be supporting two platforms at once. Why not reduce that legacy support and only support one platform, Windows 8?
It’s an interesting approach but if tablets truly are the future, using Windows 7 in that environment is not a pleasant experience; it’s Windows 8 or bust. It’s quite a novel thought really; Microsoft has positioned itself to force the Windows 8 experience into the corporate market as tablets become the staple item of a modern enterprise.
:: The aggressive approach
Subsidize the Surface Pro pricing, get that baby down to a reasonable level so that the next time corporations upgrade their PCs, they can get a tablet/laptop hybrid for a modest price that is equivalent to a stand-alone laptop price. If Microsoft can make the Surface Pro attractive enough, it can get a ground-up movement to break into the enterprise in volume.
The key here is that the Surface Pro, or OEM equivalent, will perform poorly with Windows 7 installed. If this is the form factor of the future, lower the barrier of entry as far as possible and force the adoption of Windows 8 from the ground up. Make the install base desire tablets then show the power of Windows in its hybrid form factor as the one device can kill two birds.
The low licensing fee is a great start but Microsoft can count on applications being purchased the company to help subsidize their hardware too if needed. Microsoft has a lot of tools at its disposal as the Windows Store opens up a new avenue for revenue but how bold are they will to go to get the enterprise to adopt Windows 8?
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Challenge: The Big Change
Without a doubt, the biggest challenge Microsoft faces with Windows 8 is that they are introducing the new Start Screen, removing the Start button/orb and introducing a new way to purchase applications. Putting aside if they like the hybrid OS on a personal level, the mountain Microsoft has to climb is how to educate the consumer about these changes without scaring them away from the platform.
Humans do not like change, we like consistency; this is nothing new. For Microsoft, they are changing up their core product and they will need to work with consumers to educate them before they get their hands on the product.
:: The current strategy
Microsoft is already working on this with the installation process highlighting the basic gestures to adapt to the Start Screen but this will pale in comparison in the amount of effort truly needed to educate the consumer.
Microsoft has also been seeding the community with ‘preview’ builds of Windows 8 (Developer, Consumer and Release) to help iron out bugs but more importantly become familiar with how to interact with the OS and get the most out of the platform.
We expect Microsoft has more up its sleeve to help align consumers from current platforms to Windows 8 but resisting change and instantly turning away from the platform because of an unpleasant experience will be a challenge Microsoft faces in the consumer and enterprise segments.
:: The aggressive approach
Get out on the ground floor, pull a ‘Smoked by Windows Phone’ but with Microsoft and the Surface. If Microsoft can get consumers hands on Windows 8 in a controlled environment to show the true value, it becomes an easy sell.
To do this, Microsoft can utilize its retail locations and the pop-up locations that will be deploying for the holidays. It is critical to lay the foundation for positive reaction to the dramatically different, but somewhat familiar OS before consumers try it out and are left unsatisfied because they are not educated on the benefits.
Naturally, they can use traditional television advertisements to demonstrate how to properly use the OS but Microsoft needs to get their message out before the consumer gets their hands on Windows 8. If they wait until launch day, it will be too late, the campaign should start very soon, even now would be acceptable to build the foundation for their future success.
Fin
Microsoft has the resources and ability to help Windows 8 get over these mountains. None of the above items are impossible to achieve but do require the full attention of Microsoft. Most importantly though, is the timing.
If Microsoft can deliver at the right time on all of the supporting activities around Windows 8, it can help the transition from Windows 7 to Windows 8 go far more smoothly than if it plays the passive card and waits to see how the market responds.
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