3 Big Challenges to Microsoft’s Windows 8

The new operating system is versatile, but could face resistance from those who prefer the familiar over the untested

Microsoft’s (NASDAQ:MSFT) Windows 8, the latest version of its PC operating system that revolutionized home and business computing nearly three decades ago, is coming ever closer to release. On Wednesday, the Redmond, Wash.-based company released the Windows 8 Consumer Preview, an early version of the operating system that can be downloaded by anyone. It doesn’t sport the full buffet of features that will be included when it becomes a retail product later this year, but it does demonstrate one thing very clearly: Because of smartphones and tablets, the way we use computers has changed, and Microsoft is finally ready to change too.

Change is hard, though, and just because changes are made to a popular product to accommodate modern tastes doesn’t mean that the product will be successful. Microsoft has enjoyed near complete global domination of the PC business since 1990. Its Microsoft Office suite of tools alone rakes in $20 billion per year, and that’s in addition to all the money it rakes in from Windows licenses sold to consumers and businesses. Should Microsoft be worried that Windows 8 might not make it? Indeed.

Consumers might not embrace it

Windows 8’s interface is, compared to previous versions of the system, very pretty. Even the lock screen—the screen that pops up when you stop using the PC for awhile and secures your account—features an array of brightly colored boxes associated with apps and services, from weather and social network notifications to shopping. The new Windows interface is clear, clean, and customizable.

Unsurprisingly it bears a striking resemblance not just to Apple’s (NASDAQ:AAPL) current operating systems but also Apple’s marketing and packaging, looking to capture sexy simplicity. Consumers have certainly cottoned to Apple’s style—the company has sold 183 million iPhones in the past four years.

People all over the world still use Windows PCs, though. Apple sold just 5.2 million Mac computers during the fourth quarter of 2011. Across all manufacturers, like Hewlett-Packard (NYSE:HPQ) and Dell (NASDAQ:DELL), more than 92 million PCs were sold. Like it or not, Microsoft needs to remember that Windows is a common language and skill set for people the world over. Even as simple a thing as removing the “Start” menu button—as Microsoft done with Windows 8—could frighten people into using earlier editions of the operating system. Consider this: 46% of consumers still use Windows XP on their PCs. That version came out in 2001.

Businesses might not embrace it

It is not easy to get people to use a new Windows platform, but it’s even harder to make businesses jump to a new platform. As of March 2011, nearly a full year after Microsoft stopped supporting the platform, 60% of businesses were still using the Windows XP operating system, according to Forrester Research. Just 21% had started using the 2009-released Windows 7. Now regardless of version, Microsoft’s Windows remains the platform of choice for IT departments in any number of different businesses across the world, and Windows 8 is built with them in mind.

Windows to Go” is a new feature for businesses that lets employees access Windows 8 and corporate apps on a thumb drive, meaning they can plug it into any PC and have access to their full set of work tools. Windows to Go is compatible with Windows 7 as well, but considering how many companies haven’t even made the jump to that platform, how is Microsoft preparing for corporate indifference to its new, very different toy? How will Windows 8’s changes stick without businesses adopting it en masse, or at least in significant numbers?

Microsoft’s mobile ambitions might not be realized

The eventual goal of Windows 8 is to be a truly cross-platform operating system. As is the case with Google’s (NASDAQ:GOOG) Android, Microsoft wants versions of Windows 8 running on smartphones and tablets as well as PCs, with mobility at the heart of the entire system’s design.

The company is getting aggressive in the mobile market too. The new Nokia (NYSE:NOK) Lumia phones using Windows had some international success in the fourth quarter, selling 2.8 million phones across a few different markets. According to research firm Gartner, though, Windows phones still only account for around just 2% of the global smartphone market. Before Windows 8 can proliferate, Microsoft needs to get consumers and businesses alike excited about the devices that will house it.

As of this writing, Anthony John Agnello did not hold a position in any of the aforementioned stocks. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.

Article printed from InvestorPlace Media, https://investorplace.com/2012/03/3-big-challenges-to-microsofts-windows-8-msft-hpq-goog/.

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