{"id":38146,"date":"2013-05-07T13:24:55","date_gmt":"2013-05-07T17:24:55","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=38146"},"modified":"2013-05-07T13:24:55","modified_gmt":"2013-05-07T17:24:55","slug":"the-windows-8-flop-what-does-it-mean-for-microsoft","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/05\/07\/the-windows-8-flop-what-does-it-mean-for-microsoft\/","title":{"rendered":"The Windows 8 Flop: What Does it Mean for Microsoft?"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

\"windows-8-logo\"<\/a>Windows 8 was the revolution that wasn\u2019t.\u00a0 But don\u2019t count Microsoft (Nasdaq:$<\/span>MSFT<\/a>)<\/b> out just yet.\u00a0 In a lot of ways, the boring, button-down software giant was just a little ahead of its time.<\/p>\n

After a storm of criticism from frustrated long-time Windows users, Microsoft announced that it would be making significant changes to its Windows 8 operating system.\u00a0 The details have not been released yet, but it\u2019s assumed that they will include bringing back the \u201cStart\u201d button that has been a fixture in the lower-left corner since 1995 and giving desktop users the ability to bypass the tiled start screen on system startup.<\/p>\n

Is this a failure for Microsoft?\u00a0 In some critical ways, yes.\u00a0 In a classic case of arrogance, Microsoft assumed that, after some initial grumbling, consumers would embrace the Windows 8 style because, frankly, they weren\u2019t given a choice.<\/p>\n

Few companies can get away with something like that.\u00a0 Arch-rival Apple (Nasdaq:$<\/span>AAPL<\/a>)<\/b> can, or at least could under the Steve Jobs regime.\u00a0 But Apple was a quirky exception in that its fans had an almost cult-like devotion to Jobs and would have likely drunk cyanide-laced Kool-Aid if he asked them to.\u00a0 Jobs could have gotten away with something as jolting as Windows 8.\u00a0 His replacement at Apple, Tim Cook, couldn\u2019t get away it, and neither could Microsoft CEO Steve Ballmer.<\/p>\n

A second flaw was failing to realize how conservative most Windows users are, particularly business users.\u00a0 Window 8\u2019s colorful tiled start screen is attractive and I have grown to like it.\u00a0 But it is not appropriate for a stodgy business crowd that values efficiency and functionality. \u00a0\u00a0I\u2019m 35, and learning how to use Windows 8 was frustrating to me.\u00a0 I can only imagine how much more frustrating it must be for a user in their 50s or 60s.<\/p>\n

But here\u2019s the thing.\u00a0 It doesn\u2019t matter.<\/b><\/p>\n

This is why I love Microsoft.\u00a0 They can have a fundamental screw-up like Windows 8 and still keep plugging along.<\/p>\n

Steve Ballmer called the launching of Windows 8 a \u201cbet the company\u201d moment, but nothing could be further from the truth.\u00a0 \u00a0Microsoft\u2019s \u201cmoats,\u201d or competitive advantages, are so strong that it can survive and thrive even after making a major miscalculation like this.<\/p>\n

My first experience with Windows 8 wasn\u2019t particularly good, yet I subsequently bought two more PCs running the operating system. \u00a0Between home and office, I own three Windows 8 machines and may own a fourth before the end of the year.<\/p>\n

Why?\u00a0 Because I\u2019m locked in.\u00a0 I run my office\u2014and my life\u2014on Windows machines, and dealing with the frustration of Windows 8 is still less bad than trying to learn how to use a Mac or than paying the Mac premium.\u00a0 And never mind all of the software and services I run that require a Windows machine.<\/p>\n

And before we throw Windows 8 under the bus, there is actually quite a bit to like about the system.\u00a0 It\u2019s fantastic that Microsoft has an operating system that can run on both traditional PCs and laptops and on touch-screen devices like tablets and hybrids.\u00a0\u00a0 Having a common look and feel across devices is part of building the Microsoft brand for the next generation, and the tiled start screen actually works quite well on a touch screen.<\/p>\n

After getting over the initial headache of learning something new, I actually like Windows 8 now.\u00a0 I have all of my Windows 8 devices registered to the same Microsoft account and I save virtually all of my files on Microsoft\u2019s SkyDrive cloud storage service.\u00a0 Using this setup, I no longer have to lug a laptop around or use something clunky like a remote desktop client.\u00a0 I can log into my Microsoft account from anywhere in the world and have instant access to my office.\u00a0 For someone who travels as extensively as I do, that\u2019s not a bad arrangement at all.<\/p>\n

But there are still times when I would kill for a return to the Start button\u2026<\/p>\n

I\u2019ve argued for months that \u201ctech is the new tobacco<\/a>.\u201d\u00a0<\/strong> \u00a0And by this I mean that big technology giants\u2014Microsoft chief among them\u2014are currently priced for no growth and are evolving into dividend-focused cash cows.<\/p>\n

If none of Microsoft\u2019s growth initiative amount to much\u2014if the new Xbox fails to impress, if Windows tablets never gain much market share, in the Windows Phone remains an also-ran, etc.\u2014then Microsoft is still attractive as a cheap dividend payer with a massive hoard of cash and stable, if gently declining, businesses in operating systems, servers, and office productivity software.<\/p>\n

And if Microsoft\u2019s work pays off and any of these new initiatives wind up being a success, then Microsoft quickly becomes the buy of the decade.<\/strong><\/p>\n

Disclosures: Sizemore Capital is long MSFT.<\/p>\n

SUBSCRIBE\u00a0<\/a><\/strong>to\u00a0Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

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