Windows 10 Musings: Competition and Long-Term Strategic Opportunities

    This Windows 10 launch feels like the launch that wasn’t a launch. Today, the OS is available to everyone for free. Of course, it seems kind of anti-climactic to me because I’ve been running this OS for around a year now. Other versions of Windows are but dim memories and even though this OS is now flowing onto millions of PCs, there appears to be little drama or problems with the upgrade. A lot has to do with planning and the massive beta test cycle, which turned this release into something more like a maintenance release, but the success also has to do with how Microsoft now views the market as it drifts from product pricing and packaging to subscription pricing and SaaS.

    Windows now exists in five forms: gaming on the Xbox, which is selling well; mobile on smartphones, which are currently underperforming expectations; mobile on tablets but mostly on Microsoft’s own Surface; on PCs, where Microsoft remains dominant; and on servers, where Microsoft still enjoys a very strong position.

    By the way, if you are looking for where you can download this new OS, you can find it here on Microsoft’s site. While a number of sites talk about the download, finding one that actually gives you a link was harder than I thought it would be this morning.


    Apple and Google represent the strongest competitors. Neither has a server platform, though Google has a rich set of cloud services. Both have split focus in that Apple has the iOS and MacOS and Google has Android and Chrome. Apple and Google both have TV platforms that branch into gaming, though, with Google being the strongest underneath the NVIDIA Shield platform.

    So platform weaknesses are on smartphones and TVs; strengths are on PCs, and gaming; and tablets fall in the middle someplace. There is actually very little overlap between Microsoft and its competitors. Google and Apple, because of their tablet, TV, and smartphone competition, are currently at a higher level of conflict.

    The long-term competitive advantage, if it emerges, will be because Microsoft has a single OS across all of these hardware configurations, while Apple and Google have split their code base. Google in particular is having massive fragmentation issues with Android, while Apple’s iOS and MacOS code bases remain very different and will be difficult to consolidate even if Apple wanted to, which it currently doesn’t.

    If this common OS is successful, a competitive response from Google or Apple is potentially years out, giving Microsoft a strong potential short-term advantage.

    Critical Milestones

    While tablets soften in general, the smartphone weakness now becomes the critical path for Windows’ long-term success in the market. Microsoft is already showcasing the potential for smartphones to become PCs which, if people buy into the model, could give it a lever to take back this segment. However, if Google or Apple decides to make a strategic change and execute on this same strategy, its current relatively high mobile strength could result in it taking share from Microsoft’s PCs using the smartphones as a stronger beachhead. So getting to critical mass on smartphones, or something else (like Hololens) that could replace them before Apple or Google respond, will be critical to not only Windows’ success but potentially to its survival.

    So Microsoft’s long-term opportunity is to wrap up PCs, tablets and smartphones into a blended platform with a massive competitive barrier; its long-term risk is that Apple or Google might make this move first, thus rendering Microsoft’s effort moot.

    Wrapping Up: Microsoft’s Advantages and Risks

    The competitive spread Microsoft has fielded looks very different from Apple and Google’s competing efforts, which are far more focused on each other than they are on Microsoft at the moment. Microsoft’s big play is to get the platforms it still holds and smartphones to one single OS, but its risk is that Apple or Google see the exposure and do a similar pivot before Microsoft can get to critical mass on smartphones. Apple is financially discouraged from making this move and Android is so fragmented that it may be physically unable to make it, which would give Microsoft an edge, but it still has to execute on smartphones.

    Reviews continue to come in as relatively positive on the Windows OS, and while there is some upgrade breakage, it is in the noise at the moment. But the big play comes with smartphones later in the year and all of this likely hinges on how much of a fight Microsoft is willing to put up on the platform it is weakest on.

    Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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