To say that the past week has been an interesting one for the PC market is one heck of an understatement. Between Microsoft’s first official preview of Windows 10 and HP’s announced split into two companies, there has been an enormous amount of hand-wringing and questioning about the future state of the PC market.
Not surprisingly, that’s also led to a lot of questions about Windows, given its still very close ties to PCs. Many reporters I’ve spoken with have basically asked, given the challenging conditions PCs face, is Windows still relevant?
My short answer? Absolutely.
First, let’s address the PC question. Though 90% of the tech industry seems intent on burying PCs while they’re still alive, the truth is, they are still alive. In fact, they’re showing signs of coming back to life, which I’m defining as no longer declining. (Hey, remember, flat is the new up.) We’ll know more next week when third quarter shipment numbers are announced, but given all the research I’ve done, as well as the upbeat reports we’ve heard from component makers and PC vendors, I’m willing to bet the PC story is going to be decent.
Plus, in a strange way, some of the bad news we’ve seen about tablets recently (flat to declining sales, etc.) could prove to be good for PCs. What’s implied in that news is that tablets are not going to take over PCs for most individuals, so those people who’ve been holding off on upgrading their existing PCs for fear that PCs won’t be relevant anymore, can now go ahead and upgrade.
Given the big HP news from earlier this week, it’s somewhat ironic that one of the more upbeat PC companies of late has been HP. In their last reported quarterly numbers released in August, their PC shipments were up an impressive 13% year over year. Not bad for a “dead” market. Additionally, even though many have tried to read a negative PC story into the news, HP’s announcement doesn’t mean that they’re questioning the future of the PC market. In fact, you could even make the argument that it’s the exact opposite. The truth is, it’s much too early to tell exactly what the impact (if any) HP’s announcement will have on either the near-term or even medium-term outlook for PCs.
So, let’s turn our attention back to Windows 10. I’ll start by making the argument that Windows 10 is what Windows 8 should have been all along. Instead of bifurcating into two distinct environments with a confusing model for working and switching between them, Windows 10 looks to leverage everything that’s good about the familiar Windows 7 interface, along with some of the genuine enhancements that came with the Metro UI of Windows 8. Again, it’s a bit early for final pronouncements here as well, but what I’ve seen so far is definitely encouraging.[pullquote]Windows 10 is what Windows 8 should have been all along.”[/pullquote]
Of course, the unfortunate implication is that Windows 8 set the PC industry back a good two years and it’s going to be difficult to catch up. While there may be some truth to that argument as well, I think it’s far from a lost cause. PCs still play a critical, if not always central, role in many people’s digital lives, so the fact that a new option that brings them back up to modern expectations is set to launch is very good, and important, news.
Microsoft has even bigger plans for Windows 10. Their goal is to be able to scale the UI intelligently from phones through tablets up to large-screen monitors attached to PCs. While that’s still going to be a challenge to do well, in some ways, it may not be as much work as it first appears because I’ve always felt the pure Metro UI actually works better on smaller screens, so there isn’t as much to change there.
The bottom line is that both Windows and PCs are still relevant in an increasingly mobile world. The role that all tech devices play is evolving and Windows-based PCs are changing too, but they continue to play an important role in both commercial and consumer applications and will continue to do so for some time to come.
In a recent interview, Bill Gates stressed the importance of making MS-Office dramatically better. I tend to agree, and I actually think that it is unfortunate that the commentary around Microsoft has focused on the mishaps of Windows 8. MS-Office and the ecosystem (including file format dependency) around that is much more interesting.
I hope that with Windows 10, Microsoft will be able to finally put Windows 8 behind them and move forward.
Do you have any insight on the interesting things that Microsoft is doing because I’m quite curious?
http://www.neowin.net/news/gates-talks-apple-pay-bitcoin-nadella-and-how-office-needs-to-be-dramatically-better
I agree that Office and its file formats are essential to the future health of the company and I gave presentations that mentioned that topic probably three years ago. I don’t know what to say about that link re: the Gates interview, but I will say that I think Microsoft’s efforts to make its services more cross-platform friendly are extremely important and give the company an opportunity for future growth.
Thanks.
Just one more question. If you had to make a choice between Windows and Office, which would you think is more important for Microsoft’s future? Which has more room to innovate and improve?
I strongly suspect that the answer is Office, and that is why I think the discussion around Windows’ user interface is rather distracting.
In fact, I wonder how the world would react if Microsoft mixed the functionality of Office into Windows, making Windows by far the best platform on which to run Office and third-party productivity applications. This is not unprecedented since Apple added system-wide spell checking, office document preview (even for .doc, .xls and .ppt) to Mac OS X long ago.
If I was running Microsoft I would focus 100% in to making Microsoft Office as good as it can be on EVERY platform. Still work on Microsoft Windows but stop charging for it and make only one SKU. The days of paying for operating systems are over. The sooner that Microsoft can do that the better they will be in the long term. I would also work on beefing up their online offerings as well. I would also take a look at what technology that I have in R&D and see what ones can become products in the next year or so. If not I would kill them off. Stop wasting time and money funding pet projects that have no future as a product or service.
I generally feel the same way and I’m sure that Microsoft is doing a lot of work on this. I’d like to hear more about it.
Very unconvincing analysis from Bob. Watching the wagging tail (shipments) and proclaiming the health of the dog is simplistic at best. Cherry picking the odd company’s performance is worse. Did they dump, kill margins, make some massive unreplicable deals etc.?
Unless you demonstrate an actual understanding of the purchasing decisions, commenting on the scenery is of dubious value. Businesses are extending buying cycles and reusing old kit. MS is selling cloud and managed desktop offering that work well on P4s, let alone c2Ds. My 100k person company is extending laptop lives to 4.5 years (from 3). Home users have understood very clearly what tablets do and what their PCs do and guess what… There are no new use cases for PCs. You can get away with using old PCs for almost all consumer use cases outside of gaming. The key reason to get a new one if because the POS died or Windows bogged down so much and the user doesn’t know who to fix it. Nothing is changing the long term trends that PCs will decline to a level of simple replacement which will operate on a lifecycle based on the quality of the hardware. One of my teams just build a spectacular app that means that the financial services sales force can now run their entire business from a tablet. It sources data from CRM, pricing, sales and profitability systems and presents it with a tablet UI that lets you plan and execute sales analysis, actions and reporting without ever opening a laptop. Windows 10 changes nothing. Enterprises are happy with Win7, consumers largely don’t care about their OS as long as it doesn’t intrude on their actual needs. MS pandering to developers who are seeing far greater opportunities in Mobile (and not WP8) and assuming that consumers care about the ensuing results is naive. The world has changed and brute force and ignorance is no longer on MS’ side.
PCs won’t disappear but they offer nothing new. Their growth over the past few years has been negative/flat during which time a similar number of tablets and many more smartphones have been added to the tech inventory of consumers and businesses decimating the PCs share of tech spend. The horse is dead. Stop beating it.
And on top of that, Apple continues to slowly increase its small product share, but huge profit share (45% of PC profits worldwide). It releases Mac OS updates with real new value every year like clockwork for free. (If MS releases 10.0 for free it will be a one time panic move to keep Windows from completely derailing, since Windows is their revenue.)
If you subtract growing Mac sales, revenues and profits from the PC industries sales, revenues and profits, it becomes clear that Windows PCs are in very bad shape with no sign of a sunrise.
As CAPNBOB67 states, Microsoft and its OEMs are not offering anything new, while smartphones, tablets, and even Macs keep increasing their relative value. Windows only has one thing going for it as far as I can see, and that is enterprise momentum. Consumers can switch to other operating systems fairly quickly, but big businesses need lots of time. But that is Microsoft’s game to lose at this point, as Apple with its huge advantages in hardware, software and services integration and its iPad/iPhone/Mac integration is slowly putting enterprise in its sights too. If Microsoft does not get its act together, Windows is in for a long slow decline.
Apple may gain share, but don’t forget that in personal computers, they still only have about 5% of the WW market. So even if they quadruple it, they’re only at 20%. You may not like Windows, but it still plays a critical role in businesses and they are very slow to make big changes because of the costs and complexity involved. As you point out, momentum is a very strong force and I don’t see enough of a momentum switch to dramatically change that anytime soon–as long as Microsoft does finally fix things withy Windows 10.
I use both Mac and Windows by choice so I wouldn’t say I don’t like Windows.
We agree that Windows is a solid business, but I think its inevitably a shrinking business now, as they continue falling far behind competitors development cycles. It will be a slow decline, but it looks unstoppable to me.
Maybe capnbob67’s assessment was a bit “direct” but what can’t be argued is Microsoft’s lack of innovation with Windows.
I’m not sure if you’ve actually used the Win10 preview but I can’t help but shake this feeling that it’s a Texas-sized step backward. True, it took guts to remove the Start Menu and force everyone to treat their desktop like a tablet but with Windows 10 I feel like Microsoft is blaming us for not understanding their muck-up of Windows 8 by relegating us back to Windows 7 with a touch of their mistake thrown in.
As I recently described it in another post (I think on this site), Windows 10 feels like the Jar-Jar Binks of the Star Wars prequels: Jar-Jar was universally hated but Lucas, with all the contempt in the world for his fan base, continued to push this character onto us by giving him small but defining roles in the remaining films.
Windows 10 is all the evidence you need to show that Microsoft doesn’t have any new ideas. They’re not pushing the platform forward in any meaningful way. Unlike Apple who is merging their mobile and desktop OS’s in supremely functional ways that Microsoft should be ashamed for not thinking of or implementing first.
When I look at the upcoming features for Yosemite — accepting calls on a Mac and/or iPad, more powerful Spotlight features, grouped tabs in Safari, and more — I’m still amazed that the so-called king of desktop operating systems didn’t have this first.
Don’t get me wrong, I still think Windows is relevant but in the same way that gas is relevant to powering our cars. If we could drive a Honda with nothing more than a flux capacitor powered by beer cans and banana peels we’d only stop at gas stations to buy lottery tickets and stale donuts.
Here’s your double entendre of the day: Windows isn’t going anywhere.
It’s really sad that instead of committing to Metro, MS are backpedaling, instead of fixing the obvious execution mistakes that sunk a sound strategy and design.
PS “double entendre” always makes me smile, it’s a fake French phrase that doesn’t exist in French… We’d use “double-sens”, or in this case, maybe “paradoxe”…
My Dell crap laptop is dying and I don’t think I will spend my money on a new PC. I understand PCs are good and important for some people but it is not my case. I can do all my work on any tablet, which envolves reading and producing some texts that can be easily achieved with an bluetooth keyboard. I haven’t tried windkws 10 but knowing MS as we all do I doubt there will be much of a difference. I am cocky now that I am used to working with retina display and my new laptop has to have a screen that goes easy in my eyes as we all know Windows doesn’t scale well, which is a problem for me. I am sure I am going to buy the iPad Air 2 as soon as it hits the stores here. I am super happy with my current iPad Air. A new laptop with Windows? I don’t see it coming, not right now, not for me. I have had enough of Windows.
Thanks for the feedback, even if we don’t disagree. I think PCs can and should evolve and I still believe Microsoft can play an important role in the evolution. Are there challenges and frustrations? Of course there are. But, the bottom line is devices with reasonably large screen are going to continue to play an essential role in business and a still important role for many consumers and most big screens are going to be powered by Windows.
Seeing the Trend one can even argue that the PC segment is stronger than the Tablet Nowadays
Windows is relevant, not because of what it is now, not because of what it might be in the future, but because of what it was in the past. Maybe, just maybe Microsoft can make people excited with this version of Windows, but it has wasted a lot of social capital on the problems of Windows ME, Longhorn, Vista, 8, Windows Phone. All poor releases with built up expectations and failure to meet them in reality. Will anyone care about Windows 10 itself? I doubt many people will. It is what will come with their PC.
There’s a lot of truth in what you say and, in essence, it agrees with my point. The legacy influence is huge and doesn’t go away any time soon. Microsoft can’t get away with a pure legacy story forever, however, and they do need to make Windows 10 a viable option. From what I can see, they’re headed in that direction.
Windows PCs will never go away. But a lot of people bought more machine than they really needed, thanks to the Microsoft monopoly, and that source of sales and revenue is going away.
Dream on.
Everything dies and disappears.
It is the exact timing that is tricky to predict.
“Everything dies and disappears”
Midframe computers (“minicomputers”) still exist. IBM even still sells them, or did until recently. They are no longer the size of a wardrobe, there are fewer of them, and the jobs they are asked to do have become much different than back in the day when it took a closet-sized minicomputer to do payroll. The market for minicomputers used to be booming back when every company was discovering the virtues of switching from doing accounting by hand to doing accounting with software. Now it has shrunk and become stagnant.
Likewise, desktop computers (mostly running windows) will continue to exist for decades to come. But their numbers are no longer growing, and will slowly shrink over time. MS’s problem is that the boom in desktop computing that they built their company on is over… and all their attempts to enter a new, non-stagnant market have failed miserably.
There’s nothing wrong with being a company that serves a stagnant, non-growing market, but it’s hard to be a publicly traded company that does so, because the church of “companies exist to increase shareholder value” stupidly insists that growth (preferably rapid growth) is mandatory. Microsoft’s seemingly hopeless quest is to find a new source of growth.
I find it odd that Microsoft went from Windows 8 to Windows 10. Makes me think of Spinal Tap.
Exactly. Clearly a two increment upgrade is better than a single increment upgrade. Real innovation from Microsoft here. Everyone else just releases one upgrade!
Considering the “every other version sucks” curse that Windows has been suffering from for the past 15 years (ME bad, XP good, vista bad, 7 good, etc), I guess it’s one way to ensure that Windows 10 will be another lemon…
Maybe the decision to skip Windows 9 was made by someone who had drunk the kool-aid and thought that 8 was one of the good ones, so they needed to skip the next version?
Besides, everyone knows 11 is better than 10.
Joe
My opinion is that Windows is necessary but not relevant.
Brief ’n poignant; says a lot; confirms suspicions.
“I’ll start by making the argument that Windows 10 is what Windows 8 should have been all along.”
Windows 8 (Sinofsky’s folly) opened a door to Apple and Google in Enterprise that might never have opened. Windows 10 is Microsoft’s attempt to close that door. They will probably succeed to some extent …
Yes, I think you’re right. They need to distance themselves from Vista, v2 (my name for Win8) and early signs re: Windows 10 are encouraging.
I always wonder how much Google is getting into enterprises. I know they do cloud computing and GMail/Docs for business and education.
My friend owns a small firm with 30 employees and was looking for a cross platform (Windows, Mac, iOS and Android) messaging solution. They were using Google Hangouts with every employee’s personal Gmail accounts (they use exchange for work email). Then they realized how much info Google was logging. If the company fires an employee, that employee still has access to all of their chat logs via their personal Gmail account. The company may lose control of confidential information. Hence they are looking for another solution.
Another friend works for a Top 50 Global company. They are forbidden from using Chrome or Google search when checking patents and writing patent proposals.
I guess I’m wondering how far Google is really getting into enterprises since 95% of their revenue is from ads?
“The bottom line is that both Windows and PCs are still relevant in an increasingly mobile world.”
Windows is still the undisputed king of Enterprise. I am running windows 8.1 on the arguably best Windows PC – a 13″ MacBook Air with Parallels 10 and MacOS X Mavericks. It all works together quite well.
It’s fascinating to see Windows and Android trying to bridge the mobile vs desktop divide on the ergonomics front, and to keep half expecting Apple to come up with something in spite of previous vows not to – hopefully not a dual-mode monster à la Apple III, Windows 8…
To me, it makes no doubt that there will be convergence, if only because modern mobile OSes are so much easier, reliable, rich in apps, and well-known, that even Android in its current state is an OK choice for a desktop operating system in many cases. Once it gets split-screen or floating multi-windows (and hopefully right-clicks and keyboard shortcuts) Bob’s your uncle (sorry). If only Google had focused on Android on the desktop instead of getting sidetracked with Chrome OS…
Windows sure is relevant though: they’re not going away on the desktop, and working hard at the mobile-desktop convergence issue.
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