Microsoft Renovates Windows, Shakes Up Tablet Space
By Brian DeCicco, Mindshare, 2012
Over the past 3 weeks, Microsoft has announced a series of product innovations and strategic moves that have many pundits bringing up 1993- the year Windows replaced DOS technology and stopped Apple, IBM, Lotus, and others dead in their tracks across the PC and application businesses. On June 18, Microsoft showcased a new family of PCs called The Surface which will be available in October. In parallel, Microsoft also revealed one of the biggest smartphone platform updates the industry has seen in years with Windows Phone 8. In addition to these organic innovations, Microsoft also unveiled plans for its version of the mobile wallet with the release of WP8 by teaming up with Orange, a UK-based mobile services company using NFC (near-field-communication) technology. And finally to round out its very active Q2, Microsoft also announced the acquisition of giant touch-screen maker, Perspective Pixel (PPI), best known for providing the large touchscreens that have become a staple on cable news programs. This acquisition suggests that Microsoft has bigger plans than just the consumer market for its new version of Windows software.
The Windows 8 launch will actually consist of 3 variations, W8 Pro for desktop, WRT (formerly known as Windows on ARM) used for tablet-like devices, and WP8. Microsoft announced that the upgrade to W8 Pro in October will cost users only $40; the low cost is recognition by Microsoft that W8 will be a remarkably different experience for its users to embrace, and thus consumers will need a little bit of an incentive to make the switch. W8 will likely include many pre-installed apps, including: Camera, Messenger, Mail, Calendar, SkyDrive, People, Photos, Video, and Music, with the media components rumored to be rebranded under the Xbox Live name. WP8 is based on common-code with the W8 desktop OS, meaning that a lot of the windows applications that consumers love and recognize on their desktop can easily port over to a Windows Phone. This direction is also great for developers who can leverage desktop code for applications delivered on device. WP8 also keeps pace with Apple’s iOS6 by making social central to the device and its pre-installed applications. Implications
With its sleek new software and hardware innovations, marketers will certainly be afforded new ways to engage their audience in the digital channel. However, a looming concern is the well-publicized “Do-Not-Track” feature of Microsoft’s Internet Explorer 10, slated to ship as part of the W8 software packages. This would be hugely detrimental to the exploding behavioral targeting and audience buying industry. The Digital Advertising Alliance is challenging this as a default setting in IE10, as it directly conflicts with the agreement set up earlier this year with the US government. All advertisers seem to be on board if DNT is enacted by a user, but not when dictated by one individual browser company. The spotlight will remain on this topic up until resolution and the launch of W8 in Q4.
Microsoft is moving fast, by providing full support for business apps and making distribution from IT easy, understanding that adoption is very expensive for the enterprise and you may only get one shot at it. In July, eMarketer reported that ~50% of IT pros intend to buy an Android tablet next, versus just 25% for iPad. This is significant as it demonstrates that there is room for a two or three party mobile race. This represents a huge business proposition for Microsoft Ad Solutions to integrate the corporate account and user data acquired as a byproduct of enterprise adoption to build custom ad targeting and solutions for the business audience on those devices. Though, their ability to capitalize is contingent on the outcome of the previously mentioned Do-Not-Track policy. If permitted, Microsoft would potentially own extensive first party data on business professionals, and have exclusive rights to advertise to them through their advertising network inventory on all platforms. Within 24 months, Microsoft could become the biggest player on the b2b advertising scene. Mindshare POV Summary
The launch of The Surface allows Microsoft reignites the Mac vs. PC war of the mid-2000s, and takes it to the mobile/ tablet battleground, but if Windows 8 fails to deliver on its promise, their customer loyalty could be compromised and the slow decline they have been riding could quickly turn to complete collapse. Either way, this is a turning point for the digital computing industry that will create opportunities for some and threaten the survival of others, simply because of the dominance Microsoft has had in the OS marketplace to date. Time will tell if all these recent innovations will propel Microsoft back into the forefront the way the Windows launch did in ’93, but one thing is for sure… Google, Apple- it’s your move.