By PATRICK SEITZ, INVESTOR’S BUSINESS DAILY
Microsoft’s (MSFT) Windows 8 operating system could be a flop like the company’s much maligned Windows Vista, if users reject its radically redesigned user interface.
The consensus on Wall Street is that Windows 8 could spark a PC upgrade cycle that would fill the coffers at Microsoft. But some analysts question whether Microsoft — in making its new computer operating system different enough to excite users to upgrade — could end up turning users off instead.
If that happens, it could drive more users to buy Apple (AAPL) Macintosh computers. That’s what happened when Microsoft’s Windows Vista proved unpopular.
Metro Interface A Gamble
Microsoft is gambling on a new user interface for Windows 8 called Metro. It features apps in colored squares and rectangles that make your desktop look like the bus from “The Partridge Family.” These app tiles can display up-to-date information like weather, stock prices, email and social media updates.
Metro also is optimized to work well on new touch-screen personal computers, which combine the horsepower of a traditional PC with the interactive screen of a media tablet.
Apple CEO Tim Cook recently compared this hybrid approach by Microsoft to merging a toaster with a refrigerator and making a product no one wants.
Windows 8 is set to be released this fall. A near-final test version of the software was issued May 31.
Microsoft expects its bold new OS to be the next evolution of the personal computer. It will share the same look and feel as Microsoft’s tablet and mobile phone operating systems.
Industry observers have some doubts.
“There’s going to be a lot of stuff for folks to get used to,” said Michael Silver, an analyst with research firm Gartner. “This is really a big change for Microsoft. It does have the potential to be more of a Vista-like release than a Windows 7-like release.”
Microsoft tends to put out major software releases, which change the “plumbing of Windows and how things work,” followed by minor releases, which “polish” and fix problems with their predecessors, Silver says. “Windows 8 is a plumbing release,” he said.
Commercial users, who make up half the PC market, are likely to steer clear of Windows 8, says Roger Kay, an analyst with Endpoint Technologies Associates. Businesses, government agencies and other enterprise users won’t want to switch when they’re already deep in the throes of deploying Windows 7, the well-received follow-up to Vista.
Still, many companies are still using Windows XP, which came out in October 2001, because they skipped Vista, which bowed in November 2006. The current release, Windows 7, debuted in October 2009.
Businesses Prefer Continuity
Commercial PC buyers are conservative and don’t want to disrupt their operations if they can avoid it, Kay says. “Corporations are looking for continuity,” he said.
Kay and others say companies don’t want to have to teach employees to use a new interface like Metro.
“Enterprises are going to ignore this version,” said Paul Thurrott, editor of the Supersite for Windows. “Windows 8 is a version for consumers.”
Commercial customers will buy licenses for Windows 8 when they get new PCs, but they’ll get “downgrade rights” and install Windows 7 on those machines instead, Thurrott says.
In a May 22 conference call with analysts, Dell (DELL) CEO Michael Dell dampened expectations for Windows 8 in the enterprise.
“Corporations are still adopting Windows 7, so we don’t think there’ll be a massive adoption of Windows 8 by corporations early on,” Dell said.
Microsoft is looking to regain ground with consumers who have become enamored in recent years with slick Apple products like the iPhone, iPad and Macs, he says.
Consumers might be a tough sell now, though, given the iffy economy and alternative devices available for purchase like smartphones and tablets, says Michael Cherry, an analyst at research firm Directions on Microsoft.
“I’m not sure many people right now are all that excited about buying new PCs,” Cherry said.
Microsoft might have a better shot at growing its business by selling tablets running a new OS called Windows RT, he says. Windows RT will run on low-power ARM (ARMH)-based chips. RT is expected to be released in conjunction with Windows 8.
But a lot of questions remain about Windows 8, including its release date.
“One of the big questions is: Will Microsoft hardware vendors come out with compelling, sexy, cool devices to lure people back from Apple or keep them in the Microsoft fold?” Gartner’s Silver said.
That will be the job of PC makers like Acer, Dell, Hewlett-Packard (HPQ) and Lenovo, which are developing Windows 8 machines. On June 4, Acer was the first to unveil computers using Windows 8, including touch-screen tablets.