Microsoft's counter-attack against Windows 8 coverage makes it 'look weak'

Apple-esque communication strategy comes home to roost, argues analyst

By , Computerworld |  Windows

"The lack of high-quality apps is a direct result of their secrecy," said Michael Cherry of Directions on Microsoft, who knocked the Redmond, Wash. firm for not providing tools, documentation and testing systems far enough in advance of the launch, or getting OEMs on board with innovative designs for the operating system's 2012 debut.

"This wasn't the sole reason for Windows 8's problems," said Cherry, "but it is the price you pay for being secretive."

Microsoft sounds frustrated, Moorhead observed, that its broader business isn't put into perspective, but that outsiders are focused on the Windows division, which contributed 28% of the company's total revenue in the first quarter. The Business group, whose biggest money maker is Office, accounted for 31% in that same period.

"They have good growth in different divisions, and their gross margins and profit margins remain among the highest in the business," Moorhead said. "But Windows is behind the ball."

For the first quarter of 2013, Microsoft's gross margin -- sales minus cost of goods divided by revenue -- was 76.6% and its profit margin, or percentage of revenue remaining after fixed and variable costs, was 29.6%. By comparison, Apple's gross margin for the same quarter was 37.5% and its profit margin was 21.8%.

"With Windows 8, Microsoft is trying to shoot ahead of the curve," Moorhead acknowledged. "Metro is the best UI for large panes of glass, like wall panels and TVs. It's the best for voice and air-touch. But for other uses, it's a UI that looks ahead to 2015 or 2016. And for now, users are reacting to it negatively."

And that negative reaction isn't imaginary: Windows 8 has not sparked a resurgence in PC sales, as many, including Microsoft and its OEM partners, hoped. It has, however, given Windows-based tablets some traction, with estimates of shipments in the first quarter ranging from 3.7% to 7% of the market.

Windows Blue is meant to give the operating system another shot at driving PC sales for the back-to-school and holiday sales seasons, and increasing Microsoft's share of the tablet market with a shift towards smaller, less-expensive tablets.

Which made Shaw's dispatch all the more confusing to Moorhead.

"They're on the defensive here," said Moorhead. "I don't think there is anyone who read that memo that thought any differently. You only write a response like this when your back is against the wall to a certain extent.

"I don't think this had to be written," Moorhead said.

Originally published on Computerworld |  Click here to read the original story.
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