As can be expected, the company’s many cheerleaders and haters are out in full force. Pundits can and will pontificate on the new operating system’s chances. However, what might be more useful is looking at Microsoft’s other make or break moments. The upcoming launch is far from the first time that Redmond has fought with its back against a wall. A backward glance at these moments, and careful evaluation of them, may provide a better, ahem, window into the company’s chances this Winter.
#1 The Browser War
#2 Subterfuge against Linux
#3 Microsoft Ambushed by Apple’s Digital Music Revolution
#4 Bing’s Guerilla Resistance to Google Dominance
#5 Microsoft Musters Mobile Forces Too Late
#6 The Xbox Proves an Effective Combatant to Japanese Rivals
#7 After Years on the Defense, Microsoft Looks to Launch Powerful Counterattack
When push came to shove, Microsoft flexed its tremendous muscle and began to freely bundle Internet Explorer with every copy of Windows. The ubiquity of the operating system translated to ubiquity of the browser. Netscape simply could not compete; the company was dependent on Navigator as its primary revenue stream. Internet Explorer was free and pre-installed, Netscape was neither. Game, set, match. Windows Phone 7’s performance has been less clear cut. Launched in the Winter of 2010, the OS was praised by critics, but initially saw lukewarm hardware and a tepid response from consumers. Windows Phone’s hardware woes were related to the popularity of Android OS as there were no manufacturers that made Windows phones exclusively; this led to designs that were derivative of their Android cousins. Windows Phone 7 was given a second lease on life when Microsoft scored a coup and convinced Nokia to sign on as an exclusive WP7 manufacturer. Windows Phone sales have picked up since then, and Nokia’s strong hardware has pushed other manufacturers in the ecosystem to step up their game. Market share still lags, but is growing. Importantly and ominously, Windows Phone has yet to turn Nokia a profit. The next generation of the operating system, Windows Phone 8, is set to be launched only days after Windows 8. This Winter is Microsoft’s biggest opportunity to break out of the mobile doldrums and become a true challenger to Google and Apple in this arena. More importantly though, the Xbox 360 is leading the charge of Microsoft’s assault on the living room. With an Xbox Live Gold account, customers can access a wide range of free and subscription based services that would otherwise be dispersed across the living room’s myriad devices. As Microsoft has proven, having Madden football and Netflix on one device makes for a powerful pitch to consumers. That’s not the only way Microsoft makes money off of Android. The company has struck licensing agreements for Android handset and tablet manufacturers that account for more than 70% of the Android device market. That’s right, Microsoft makes money from seven out of ten Android devices sold. Some have even speculated that the company’s Android agreements net more income than Windows Phone licensing. The company has arguably made lemons into lemonade. Microsoft’s pragmatic streak continued. Windows 8 is forked between x86 (Pro) and ARM (RT) versions. This allows hardware manufacturers to further differentiate their products, an important consideration as these partners scramble to differentiate and compete with the iPad. Windows 8 looks to be a compelling, competitive tablet OS in all its iterations, this is scary enough for Cupertino, but Google is the company that should truly be worried. Android did not take off on tablets the way that it did on smartphones. Windows 8 could quickly capitalize on pent up demand for non-Apple tablets. The pricey, but gorgeous Surface is set to launch this week. It will be Microsoft’s first true entry in the industry’s fastest growing sector.
