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Does Windows have a viable future?

Thursday, 21 February 2008 apple linux windows

Microsoft have enjoyed a long stretch as dominant market-share holder in the desktop market; but now they face stiff competition from two sides: OSX and Linux. Can they maintain their strong position?

I was a full-time Windows user for years. Like most of you, I started serious computing with Windows and DOS. This time last year, I was a Vista user and I was defending it but in September I moved to Ubuntu and it’s still here but, I realise I’m no average Joe, so I’m excluding people like me from this discussion.

People are comfortable with familiarity. Most people buy their first PC, go through some pain getting used to it but after that they’re pretty okay in doing what they do. When they upgrade, they look to improve some aspects but keep everything as identical as possible, just better, faster, etc.

There are two markets I am going to look at. The entry-level users, either on a super-tight budget or just buying their first computer, and the luxury/fashion crowd.

Act I: Entry-level users swinging to Linux

Cheap PCs have been around for quite some time. There has been a 400 laptop or a 300 desktop for at least 5 years, offering low spec, low quality hardware, paired with an entry-level version of Windows (XP Home or Vista Basic). This suits most people looking for a cheap computer quite well. There is a new market emerging through: the ultra-cheap.

Windows isn’t free (or bundled by default like OSX). Dell and other massive hardware companies can get massive savings but they’re still a long way from nothing and this cost inevitably gets passed along to the purchaser of a new PC. That’s fair enough. It costs Microsoft money to make and they don’t get money back through custom hardware like Apple does. But at the budget end of computing this license makes up a significant portion of the bill.

And Windows itself is plays a part too. As versions of Windows swell from release to release they effectively drive people to run more powerful computers, even if they don’t want to do anything new. Vista was a prime example of this: to try and catch up with OSX and Linux in the graphics field, Microsoft opted for a heavy graphics subsystem, lined with DRM (to keep media providers happy) with the result that Vista is empirically slower than XP on the same hardware.

The combination of these two means that the low-end new Windows computer can never dip below the 300-400 price point. And before anybody chimes in saying “Oh I know a great little shop selling PCs with Vista for 279.99” I’m sure there are borderline exceptions — just bare with me.

Over the past 12 months, there have been some amazingly cheap PCs come out, not burdened with Windows but set free with Linux. Taking Windows’ place means Linux brings two advantages to the entry-level market:

  1. The machine only requires cheaper, less powerful hardware.

  2. There’s no licensing fee to pass along to the user.

Walmart started selling a $199 (~99) desktop Linux PC that promptly sold out. ASUS released their Eee PC, a super-sub-notebook size laptop for about 200 and they sold out. And yesterday I read how Elonex is going to release a 99 laptop with similar-ish-looking specifications to the XO (one-laptop-per-child) beast.

These are by no means replacements for a decent PC but they do go an extremely long way to satisfying people’s need for simple computing: browsing and email.

I mentioned that I started on Windows earlier and that most people do. What’s going to happen in 5 years time when a sizeable chunk of users started life using Linux? Remembering that Linux is improving at about 100 times the speed of Windows, I don’t think Microsoft stand a chance with these users unless they start paying for hardware makers to use Windows and give away the licenses (similar to their ploy to grab people in the developing world).

Act II: Fashion-conscious users cruising to Apple

The PC hasn’t really been fashionable. It started life as a huge beige box and has only recently been freed into other guises. I have quite a sexy case for my PC but it cost a truckload of money and I had to install it all myself so, again, I don’t count.

The average middle-class user likes fashionable things. Gadgets and gizmos are pretty popular with the young and men heading into their mid-life crises. Apple has done sterling work at becoming an icon for fashionable hardware in most sectors of gadgetry, including laptops, desktops, MP3 players, phones and even servers.

The operating system isn’t bad either — I wish Apple would give a little bit more back to the open source community (eg so we could run Mac apps on Linux) — but it has very firm foundations (thanks to BSD) and a good developer community giving people what they need to get on with life.

Macs do come at a premium though: they’re pretty pricey but you are paying for the sexy hardware and the brand so that’s no difference from any other fashion item. However, Apple has run a long-term scheme with university students so they get their hardware much cheaper. Take a look at this example from a US lecture theatre:

Gosh, look at all the macs

In that market subsection, Microsoft has about 0.5%. These users are likely to stick with Apple because they’ll likely have a nice experience with OSX.

This is very much with the Microsoft ethos of “Get 'em young - customer for life”, giving away enough to get people hooked (or at least, get them thinking they’re hooked)

Act III: The rocky slope of popularity

While I’m talking about something that has never happened in the software world before and, as such, has no precedent, this isn’t rocket science. Windows isn’t super-cheap or super-sexy and is being overtaken in two separate emerging computer markets, siphoning off users from mainstream computing.

But the question is: Can Microsoft rejuvenate Windows enough to give it a sustainable future?

I don’t think so. Do you?