A piece on US technology website ZDNet earlier this month, written by columnist Steven Vaughan-Nichols, suggested that Windows 8 represents Microsoft’s “New Coke moment”. Others quickly jumped on the idea.
The Financial Times led with a story on the subject, saying the fact that Microsoft was “preparing to reverse course over key elements” of its new operating system marked “one of the most prominent admissions of failure for a new mass-market consumer product since Coca-Cola’s New Coke fiasco nearly 30 years ago”.
But the two events can’t really be compared.
When Microsoft released Windows 8 late last year, it ushered in the biggest changes in the design of the software since Windows XP in 2001.
Microsoft, caught flat-footed by the move to touch-powered smartphones and tablets, a charge led by Apple with the iPhone and the iPad, has been scrambling for several years now to recover lost ground.
The company still dominates on the desktop — for now — but in smartphones and portable computers, where it was a market leader a decade ago with Windows Mobile, it has ceded its advantage to Apple and, more recently, to Google, whose Android operating system looks increasingly likely to become the Windows of the new era of computing.
Microsoft has been fighting a rearguard action since 2010, when it launched a completely overhauled smartphone operating system in the form of Windows Phone. It introduced a simplified and more modern user interface based on “live tiles” that keep users up to date with information relevant to them.
Windows Phone hasn’t exactly been a roaring success. It’s good software, but consumers, especially in developed markets, have continued to flock to iPhones and Android-powered smartphones, while Windows Phone has made little meaningful progress against BlackBerry and Nokia in emerging markets.
Microsoft is growing its market share in smartphones, just not by enough to have anything nearing critical mass yet.
So, it’s perhaps not surprising that it’s attempting to redesign Windows, the software where it still dominates on more traditional computing form factors, especially in corporate environments. After all, its dominance with Windows once allowed it to seize control of the Web browser market (an area it has since squandered).
In Windows 8, Microsoft has controversially ditched the Start button — which became as synonymous with Windows as the “Swoosh” is to Nike — replacing it with a Start screen of live tiles, similar to Windows Phone.
The idea, clearly, is to reclaim market share lost to the iPad. Except there’s a problem: consumers don’t appear to be warming to Windows 8. Microsoft boasted last week that it had shipped 100m copies of the software since it was launched last year. The key word here is “shipped”, which is not the same as copies actually sold to end users.
Recent statistics paint a stark picture of the health of the PC industry: in April, analyst firm Gartner said that 79,2m PCs were shipped in the first quarter of 2013, an 11,2% decline over the same quarter in 2012 and the first time the number had fallen below 80m since the second quarter of 2009.
Recent data from Net Applications, which measures, among other things, the software that consumers use when accessing the Internet, shows Windows 8’s market share at less than 4%. This suggests only a fraction of the 100m Windows 8 licences shipped are actually being used.
There’s talk that Microsoft could bow to consumer complaints and restore the Start button and allow users to bypass the new Start screen at boot time in the next version of Windows, 8.1, which is expected later this year.
When Coca-Cola changed the formulation of Coke in 1985, a vocal minority of customers rejected it, forcing the drinks company into a stunning reversal months later. The problem Microsoft faces is far deeper than a simple change in the formula of its software. The entire structure of the computer industry has changed. Computing has gone mobile and online, upending the desktop paradigm the company exploited so well for so long.
Microsoft knows it needs to reinvent itself for this new era. Unlike Coke, it doesn’t have the luxury of simply going back to a trusty old formula.
- Duncan McLeod is editor of TechCentral. Follow him on Twitter
- This column is also published in the Sunday Times