At first sight, Microsoft has a compelling idea to follow Apple’s and
Google’s leadership to establish an App Store for its platform.
However, what Microsoft has unveiled so far is underwhelming and builds
on questionable success factors and could easily turn into a huge
trainwreck for Microsoft.
Windows 8 Start Screen Overview
A few days ago, market researchers from IDC voiced some concern
whether Windows 8 can be as successful as Microsoft hopes it will be.
Without a touch display, there is no reason for desktop users to upgrade
and the tablet version of the OS will be late to the party. We felt
that IDC was a bit too pessimistic about its prediction, even if we
believe that Microsoft is going down the wrong route by virtually
forcing the touch UI onto the PC platform: Touch has not worked on
vertical screens in the past and it won’t in the future. But the latest
feature unveilings for Windows 8 certainly raise more concerns.
Besides touch, the only other huge trends in Windows 8 are Xbox Live integration, HTML5 integration as well as the App Store. The App Store
would have to integrate Xbox Live as well as HTML5 technologies, but
both components were no-shows in this first demonstration. There are few
other companies that have a similar tendency to shoot themselves in
their feet as Microsoft does and the scale of strategic errors at
Microsoft, especially in the Windows group, is exponentially higher than
failure at other companies. Has Microsoft just shot itself in the foot
and set up Windows 8 for failure? Could there be another Vista?
False base assumption
Microsoft isn’t as good in marketing as Apple is and even if we
believe that Christmas is in July when Apple says so, you just forgive
and believe Microsoft when a similar claim comes from Redmond.
Microsoft’s main pitch is that there are 400 million PCs that are being
sold next year and the result simply is a massive user base and even
greaterrevenues. However, we learned in recent years that neither user
base nor the number of available applications translates into developer
value, revenues and actual purchases.
Even today, developers claim to see 10x more sales on iOS than on
Android, while iOS has slightly more than 520,000 apps available and
Android is just above 310,000. Apple users are far more likely to spend
money on an application than users of any other platform. Especially on
Windows, users have been educated that many applications can be obtained
as freeware or shareware (or adware). Windows users won’t pay for their
applications as Apple users do. Microsoft seems to have recognized that
it will need to have unique applications, which, in the end, create
appeal. There is a developer contest,
which may result in apps that can support. But those apps will have to
be exclusives and Microsoft will have to invest millions of dollars into
exclusive apps to make just a dent in the current market environment.
Microsoft also follows the 70/30 revenue share model, but changes it
to 80/20 if an app hits $25,000 in sales. The 80/20 deal is an incentive
for developers to create apps for Windows, but developers also know
that it is tough to get to those $25,000. Most apps achieve a lifetime
revenue of less than $5000.
Accessibility and HTML5
Microsoft will be marketing its App Store on all its web properties,
including Bing. The company promises an effective app listing page,
curation and discovery features, as well as an opportunity for
developers to automatically offer their apps as trial without writing
additional code. However, the integration in IE10, which has been
expected to be the delivery vehicle, is limited and IE10 users have to
actively setup an App Store icon in the browser.
We were surprised that Microsoft did not pitch HTML5 as well as well
as IE10 much stronger. In fact, HTML5 was not mentioned at all, while
HTML5 apps should be the main pitch for the App Store. IE10 has
tremendous marketing potential, but is clearly undermarketed as a
delivery vehicle of Windows 8 App-Store apps. Downloadable apps need to
be cross platform, work on Windows 8 desktops, tablets and on Windows
phones, if Microsoft wants to have a shot at success. If Microsoft does
not focus on HTML5, the App Store can be little more than download.com,
especially since we can expect that Cnet or other large download portals
won’t give up their market to Microsoft voluntarily.
Xbox Live
Perhaps it is just me, but Microsoft does not leverage Xbox Live
enough. Xbox Live has to be a much more integral part of Windows 8
marketing and a much more prominent feature in its overall desktop,
mobile and entertainment platform strategy. Its entertainment division
has the only brand that sparks enthusiasm among its users and its, at
this time, the most power entertainment platform that can move millions
of people. It is beyond me that Microsoft is neglecting to take
advantage of the Xbox Live asset in Windows 8 marketing.
Touch
Windows 8 is a big bet on touch. Interestingly, Microsoft’s Windows 8
App Store video that is supposed to promote touch apps via the Metro UI
reveals why touch apps won’t work on Windows 8. Presenter Antoine
Leblond demos the interface while tapping on the screen of a notebook
which bounces back and forth during the process (at 2:58 in the video).
It does not look great and we predict that very few users will find this
to be a convenient way to use the Metro UI. Perhaps there is a novelty
effect, but touch won’t replace the mouse on a notebook or desktop.
Metro appears to be a very efficient touch UI, but Microsoft will
have to realize that notebooks are not touch devices. Even a showcase of
Animoto will not help Microsoft to win over users. The more Microsoft
shows about touch integration in Windows 8, the more we believe that
Windows 8 could turn out to be a massive trainwreck. It may be worse
than Vista, because Windows 8 cannot be as easily fixed as Vista was
with Windows 7.
Wolfgang Gruener in Business on December 07
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