Feb 04, 2013 (04:02 AM EST)
Windows 8 Outlook: Murky At Best

Read the Original Article at InformationWeek

Windows 8 lost some momentum in January but continued its slow expansion, according to the newest findings by Net Applications. The report, which also revealed that Windows 7 lost ground for the first time, adds new strokes to the increasingly murky picture surrounding Microsoft's newest OS. There's little doubt that Redmond's touch-driven flagship OS will amass significant market share, but whether it can approach its predecessors' dominance is far less certain.

Net Applications tracks usage data from 40,000 websites and 160 million unique visitors, meaning the statistics it collects aren't strict market share reports so much as reflections of user activity. Nevertheless, the numbers provide a snapshot into which platforms are gaining or losing steam.

Windows 7 led the pack in January with 44.48% of monitored activity, down slightly from 45.11% in December. Windows XP was second with 39.51% and Windows Vista, now in its twilight, was a distant third at 5.25%. Mac OS X 10.8 and Windows 8 rounded out the top five with 2.44% and 2.26%, respectively.

Overall, Windows platforms accounted for 91.5% of tracked traffic. The three most recent OS X releases aggregately achieved 6.4%, with Linux and other niche operating systems accounting for the remaining 2.1%.

[ Haven't made the Windows 8 upgrade yet? Too late to snag a bargain-basement price. Read Microsoft Jacks Up Windows 8 Upgrade Prices. ]

For Windows 8, the news is mixed. After launching in late October, the much-hyped Windows refresh snared 1.09% of activity in November before growing to 1.72% in December. With January continuing the uptick, the new OS is headed in the right direction. Then again, its November-to-December gains represent a 58% leap whereas its December to January progress represents advances of only 31.4%.

Month-to-month fluctuations in growth could easily be overstated, especially when the frame of reference is so small -- but given that the holidays were expected to deliver new devices and Windows 8 licenses to users' hands, the decline in momentum is disappointing.

Indeed, Windows 8's touch-centric OS was initially touted as the jumpstart flagging PC sales needed. That vision hasn't come to fruition. Windows 8 sold more than 60 million licenses in its first few months, a tally that roughly equaled the Windows 7 start, but overall PC shipments have continued to slide, making it unclear how many of the new Windows installations ended up on modern, touch-equipped hardware.

Due to recent price hikes, Windows 8's fortunes will likely remain tethered to hardware sale narratives. Microsoft placed the new OS competitively at launch; Windows 8 Pro was only $39.99 and could be had for as little as $14.99 by users who bought Windows 7 after June. As of February 1, the prices have changed, with the standard version of Windows 8 checking in at $119.99 and the Pro edition now setting buyers back $199.99.

The early discounts incentivized upgrade-minded customers to make a move, and with such incentives no longer in play, sales will likely shift from standalone licenses to those pre-installed on new machines. Enterprise migrations will eventually exert influence as well, but with many businesses still invested in Windows 7 and Windows XP, the ramp-up will be somewhat slow.

Though Windows 8 managed to match its predecessor's initial sales, the debut is still muted compared to legacy marks. Windows 7 launched in October 2009 and had acquired 7.71% of user activity by the end of the following January -- a share that far outpaces what Windows 8 has achieved. To be fair, there are more computers in the world today than there were three years ago, so Windows 8 would have needed to sell substantially more licenses to achieve the same impact. Even so, it remains unclear if Windows 8's ceiling is anywhere near as high as Windows 7's has proved to be.

If Windows 8 manages to reach great heights, it's difficult to know what role will be played by Windows RT, which Net Applications included in its Windows 8 stats. Recent rumors suggest that Nokia might produce an RT tablet in the near future, suggesting the platform might have some life. But Samsung has already scrapped plans for an RT device in the U.S., citing poor demand. And though Microsoft's own Surface RT has earned fans, it has also produced lackluster sales and reports of user dissatisfaction. IDC analysts have said Microsoft should slash prices on both Surface RT and Windows 8 to motivate sales.

In short, many questions remain. Will Windows 8 get a push when cheaper Ultrabooks and the coming Surface Pro hit the market? Will the eventual enterprise migrations erase memories of the mediocre start, or will mobile devices continue to encroach on the OS landscape, leaving it too fragmented for Windows 8 to assume Microsoft's typically dominant market position? Will Windows RT be a factor?

As Windows XP's massive user footprint attests, tectonic shifts don't occur overnight in the OS market. Microsoft still has time to shape the answers to these questions. The question is what the company will do to improve its odds.

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