Microsoft Upgrades


It has become clear lately that more than ever Microsoft is betting the farm on its upcoming host of product upgrades.  Windows 8 will be released for upgrade and on new PCs on October 26.  The public  preview is now available, but please do not place it on District workstations.  No date has been announced for the release of the two versions of Microsoft’s touch tablet named the Surface, it’s head-to-head competitor to the iPad, but one can bet it will before Christmas and not too long after the Win 8 release.  Microsoft’s biggest cash cow, Office, is also in public preview–once again, not for District computers–but will probably not see store shelves until early 2013–rumors have it out in February, 2013.  So over the four month period from October through February the fate of one of the great companies of the latter half of the 20th century will be decided.  It is possible that Windows and the Surface will flop–more likely the Surface than Win 8, though consumers outside business settings may not rush to upgrade their Windows OS.  People may wonder why, if they do not have a touch-based computer that they are stuck with a touch-based OS.  Of course, you can switch to desktop mode, but if so, why bother to upgrade?

Re the Surface, my personal opinion is that it is too late to overtake Apple in the tablet market.  Apple did it right out of the box and set such a high standard that any comparison will not appeal to consumers unless Microsoft can afford to take a tremendous loss on price point to break into that market.  In view of last week’s quarterly earnings loss announcement ($492 million–an historic first negative EPS) this is less likely than ever.  And besides, who needs a tablet that runs the full versions of Office?  It is a dubious bet, though iPads are growing in popularity among business users.  The iPhone forms the bridgehead, and iPad follows with useful apps outside the traditional Microsoft business grid.  Microsoft does not have a phone that anyone wants to serve this purpose for the Surface.

Office will undoubtedly retain its lock on business users, out of sheer inertia if nothing else.  But there is something else in the new emphasis on the cloud.  The advantages of Office in the cloud are very compelling for business users as well as consumers:  Your Office settings move with you; You get up to five installs of Office, which can be activated and deactivated whenever you need; Your templates also move with you; Office remembers your place; collaboration becomes much easier; Your files–if you trust them to the cloud, and it can even be your own cloud–also move with you; you always have the latest version of the programs without having to run endless patches, upgrades and service packs.  These are all tremendous advantages that should insure longevity for Microsoft Office for many years to come, and the only tech area where they continue to innovate.

The grasp of Office on the education market is more tenuous.  Where business users tend to have lots of custom macros and templates in place, education users are more ad hoc and use Office to do simpler things like author research papers or create simple spreadsheets and presentations.  Do we really need to continue paying licensing fees for Office when the vast majority of users could get their work done with one of the free cloud-based products like Google Docs?  Except for business departments that actually teach Office, does the rest of the institution need to continue using it?  The argument to continue paying high licensing costs for unlimited users is far less compelling than in commercial enterprises.

Fasten your seat belts and stand by for major changes at Microsoft in an effort to keep up with Apple, Google and Amazon if even one of these major initiatives fail.  If they all fail, or more likely seriously under perform, it could be the beginning of the end for one of the past tech giants.