Windows 8 Faces Application Shortfall

When Microsoft came out with Windows 95 at the end of 1994, there was little doubt of its success. Not just because of the quality of the software, but also because of the power of the Windows ecosystem. The launch of the new operating system was accompanied by announcements from a veritable army of software and hardware companies offering new products. Sales of personal computers and Windows software rocketed.

Thats not how it worked with Windows 8. While the software has received plaudits for its fresh new look and innovative featuresit was nominated by the Design Museum in London for its Designs of the Year competitioneven an expensive advertising campaign has failed to generate much excitement. Without compelling new software or hardware, something unheard of has happened. According to market researcher IDC, sales of personal computers actually dropped to 89.8 million in the last quarter of 2012, the quarter in which Windows 8 was released. That sales figure is down 6.4 percent from the year before. Sales of Windows 8 on the tablets and smartphones for which it was primarily designed have also remained relatively weak.

So has the Windows ecosystem lost its punch? No question. Unlike in 1994, when Windows dominated the computer landscape, today Microsoft faces huge competitors like Google, Apple and Amazon, each with its own thriving ecosystems.

But there is something else at play as well. The nature of software development has changed dramatically. In the Windows 95 era, the software developing community was well defined as [being populated by] professional developers, usually with degrees in computer science. We knew who they were, says Tim OBrien, Microsofts general manager for developer and platform evangelism. Since then, the community of people who write code has increased by orders of magnitude.

The tools are so accessible that its easy to learn software programming. There are now seven to 10 million people who write code for commercial purposes. Many of them develop simple software programs like apps for smartphones.

While OBrien estimates that there are eight million people doing programming with the .net technologies that work best with Microsoft products, attracting those developers is no longer enough. The locus of people writing software has grown much faster than the ecosystem of any one vendor, says OBrien. We are putting a lot of effort into casting this wider net.

Microsoft recognizes the challenges and is working hard to address them. The company held more than 1,000 developer camps in 90 countries last year, reaching more than 400,000 developers. These camps typically host hackathons, at which developers spend all day and night programming and for which Microsoft offers tools and contracts with design agencies to help developers turn their codes into attractive apps.

To make it easy for software developers from any country to make money on Windows apps, Microsoft offers a commerce platform in 100 languages and 58 currencies, and provides a more generous share of revenues from products sold at its app store than competitors do. This is a market that will explode, Microsoft CEO Steve Ballmer told a group of developers who gathered at Microsofts Redmond campus late last year. This is a market where you have an opportunity to make money. … I guarantee this will be the best opportunity developers will see.

So far, that hasnt happened. The number of programs a developer can sell are based, overwhelmingly, on the number of devices in the market that run a particular operating system. While Microsoft likes to point out that there are 1.2 billion users of Windows and that it will sell 400 million machines this year running Windows 8, the reality is that only a small proportion of those machines will come with touch-sensitive screens that take advantage of the best features of Windows 8. And many companies are likely to remove Windows 8 and replace it with the more familiar Windows 7 software.

Without killer apps that exploit the capabilities of the new software, there are few reasons for customers to undergo the discomfort of learning a new operating system. If a Windows customer has to learn a new system, why not try Apples, which offers more than 10 times the number of apps? Comcasts cable-TV technicians, for example, use an Apple iPhone app to check the capacity of a home internet connection. Its the old chicken-and-egg conundrum. Until there are enough Windows 8 devices in the hands of customers, there is little reason for programmers to write those applications.

Which brings us back to the Windows ecosystem. While its not as robust as it once was, it still has a large and committed membership, much of it based in the Seattle area, which is strongly committed to Windows 8. Bellevue-based Bsquare Corporation, for example, has created a system to make it relatively easy for developers to take applications developed for other operating systems like Windows 7, the Android or iPhone and make them work on Windows 8 devices. People answer a short survey and we provide an estimate, says Mark Whiteside, vice president of professional services at Bsquare. We make it cost effective and quick. We use as much of the original code as possible. But we are strongly encouraging developers to exploit all the features of the new software, such as live tiles and charms. There are neat things there.

Kirkland-based Inrix Inc. likes Window 8s ability to run on desktops, tablets and smartphones. The company, which sells traffic information, has developed an app that will tells exactly how many minutes it will take you to get to an appointment and what route will get you there the fastest. The app is particularly effective on Windows 8, says Kevin Foreman, Inrixs vice president of emerging platforms and markets, because an executive can type in the information easily on the desktop, then access the map directions while on the road from a tablet or smartphone. Windows 8 will be a very important platform for office workers, and we want to make sure we are there, says Foreman.

Microsofts biggest potential weapon could be its ability to leverage its relationship with enterprises. Many companies make heavy use of such Microsoft products as Office and SharePoint, and programmers have the potential to link portable devices to those software systems while taking advantage of security features that Microsoft builds into its products. Emirates, a fast growing, Dubai-based airline, for example, chose an HP business tablet running on Windows 8 because it wanted a device that could tie easily into its enterprise system to gather information about its customers preferences for food, wine and seating. The company expects to have 1,000 devices running on Windows 8 by the end of this year. Of course, Microsoft doesnt have a lock on the enterprise market. British Banking giant Barclays announced late last year that it would purchase 8,500 iPads for its employees. Other large users of iPads include NASA, the Swedish government, Skanska, Volvo and Neiman Marcus.

But Microsoft loyalists believe the true power of Windows 8 will be revealed when developers start taking full advantage of such compelling features as live tiles, which send information to icons on the home screen without having to open the applications actively. Burley Kawasaki, vice president of Avanade, a Seattle-based company with $1 billion in revenues, 17,000 employees in 20 countries as well as deep connections to Microsoft, argues that Microsofts new cloud, tablet and smartphone offerings create a perfect storm of opportunity that should help Microsoft build steam behind Windows 8. You have mobility, social and cloud all happening at the same time. Microsoft is in the center of each tech shift, says Kawasaki. We could see a fundamental change in how work gets done.

Consider automobile dealers. Today, they keep going back and forth between customers and their desks as they check on pricing, availability and other terms, losing that special connection with the customer each time. With Windows 8 [operating on both tablets and desktops] we can make it seamless, says Kawasaki.

An employee using a consumer relationship management system (CRM) currently has to launch an app to update a sales opportunity or respond to an incident. But with the live tile, we can pop notifications to users without their having to leave the start page, says Kawasaki. If that information just sits in a queue because you dont know about it, maybe you lose the deal.

For Brian Jacobsen, general manager at Slalom Consulting, the critical point is that for the first time there is a single operating system that can operate on a full range of device types, from the smartphone and the tablet to the PCs and the Xbox, allowing companies to fundamentally change the way they get work done.

This is precisely what makes Windows 8 a game changer, says Chris Smith, cofounder of Arryve, another card-carrying member of the Windows ecosystem. While many customers have been seduced by the iPad, notes Smith, they are limited when it comes to productivity and enterprise-related tasks. Smith thinks enterprise clients will be early adopters of applications running on Windows 8 and accessed from a full range of devices, including smartphones, tablets, the Xbox and PCs.

They are finally getting the payoff from 10 years of investments. Its going to be a marked evolution in the companys history, says Smith. He recalls being in New York City when the Surface tablet launched last year. I bought it at the Microsoft store, booted it up and logged in [to Microsofts new SkyDrive cloud offering] with my Live ID. Right there were all my Office 2013 apps. In a couple clicks I had everything on my PC available on my Surface. I wrote a client proposal on my Surface in Office and posted it. Two minutes after shutting down, I knew I had to tweak it. I pulled it up on my Windows Phone, tweaked it and resent it.

But Microsoft will have to reach beyond its shrinking band of loyalists if its to make Windows 8 a success. Until we hear more consumers bragging of the productivity gains they have achieved through unique killer applications available on Windows 8, Microsoft could continue to see its critical Windows franchise languish.