On October 26, 2012, Microsoft launched Windows 8, the biggest overhaul ever of the Windows family of operating systems, in terms of look and feel at least. More than half a year later, if one judged only by the number of licences sold (100 million as of May 2013), one might say that Microsoft’s foray into the touch-screen interface business was a huge success.

But while it has made inroads in the consumer market, this is certainly not true of the enterprise, where most IT directors remain sceptical. In fact, it’s hard to find any who have more than a wait-and-see attitude towards adopting the new operating system.

So how could Microsoft generate a 100 million sales figure without penetrating the enterprise market in a substantial way?

Sales of Microsoft’s own tablet and hybrid computers, the Surface RT and Surface Pro, aren’t contributing to the large number. According to analyst IDC, only 900,000 units have sold in the first quarter of 2013, and that figure includes both Surface RT and Surface Pro.

Other companies’ tablet hardware carrying Windows 8 isn’t doing much better: IDC says that Windows 8 sales on all tablets combined (Microsoft hardware and hardware from all other vendors) reached only 1.8 million units in Q1 of this year, placing the latest version of Windows a distant third behind Android and iOS, with 27.8 million and 19.5 million sales, respectively.

The biggest contribution to the large Windows 8 sales figure actually comes from purchases of new desktops and laptops. But while 100 million is a large number, it only represents 5.1% of the overall personal computer market. Furthermore, tablets should overtake both desktop and laptop sales by 2015; and within the tablet market, buyers – consumer and corporate – will give increasing preference to the smaller screens. Is Microsoft ready for that?

“Recent rumours have circulated about the possibility of smaller screen Windows RT and Windows 8 tablets hitting the market,” said Ryan Reith, program manager for IDC’s Mobility Tracker programme.

“However, the notion that this will be the saving grace is flawed. Clearly the market is moving towards smart 7-8 inch devices, but Microsoft’s larger challenges centre around consumer messaging and lower cost competition. If these challenges are addressed, along with the desired screen size variations, then we could see Microsoft make even further headway in 2013 and beyond.”

Stephan Conaway, CIO at the London Borough of Brent, is keeping a close eye on Microsoft’s position. “They are losing relevance,” he says. “Four years ago Microsoft had dominant mindshare with the majority of CIOs. Now it is much less so. One can discuss technology for hours and Microsoft is rarely mentioned.

“Windows 8 is surely one of the steps to try to regain the dominant position that they have enjoyed for the past 20 years. As long as they remain desktop-focused, that might not happen.”

One solution for all

Microsoft has known the market is moving towards tablets for quite some time, and building Windows 8 around the touch model is its response to this paradigm shift. At the same time, the company couldn’t just abandon its huge install base in the enterprise market. As much as possible, it wants to avoid marketing divergent operating systems, so it lumped it all together into Windows 8.

Windows 8 brings about a radical change with the new ‘Modern UI’, which is designed primarily for touchscreens but which can also be used with a mouse and keyboard. Programs must be written specifically for the new interface, and that is one of the reasons for the break in compatibility between Windows 8 and the long-established Windows 95 family, which includes Windows XP, Windows Vista and Windows 7.

Another concern is that while it is possible to use Windows 8 with a standard mouse and keyboard, it’s still awkward. Essentially, Windows 8 is optimised for a touch-screen interface.

As has often been the case in the past with the Redmond-based technology giant, Microsoft is having to backtrack in response to complaints from the market. When it had a near monopoly in operating systems it could get away with letting users find its bugs for it and it could release updates and patches accordingly.

Now the situation is quite different. If Microsoft doesn’t start getting its releases right the first time, it risks losing out as the market undergoes two major paradigm shifts simultaneously – one towards the tablet form factor and the other towards the smartphone form factor.

In response to some of the market’s discontent, Microsoft promises to release a Beta version of Windows 8.1 very soon, followed by the final version by the end of 2013. This minor release addresses some of the complaints by bringing back the Start button and the ability to boot to the desktop. And it’s a minor release enterprises should not ignore.

In a report entitled Windows 8.1 Could Become What Windows 8.0 Should Have Been, Gartner analysts Michael A. Silver and Stephen Kleynhans advise IT directors to upgrade to Windows 8.1 as soon as it becomes available.

“If you are engaged in the early planning phases of Windows 8 projects, pilot on Windows 8 if it makes sense, but switch to the Windows 8.1 beta as soon as possible. Plan to use Windows 8.1 for production deployments,” reads the report.

Perhaps Windows 8.1 will make Windows 8 more suitable to the enterprise market and provide some incentive for IT departments to make the move. After all, suitable products is what the market expects from Microsoft.

“As a leading technology company, Microsoft must be focused on keeping its products relevant in the marketplace, regardless,” says Brent Council’s Conaway.

Slow-growing ecosystem

One of the obstacles standing in the way of wider enterprise adoption of Windows 8 is the lack of a proper ecosystem around the new operating system. Support from independent software vendors is critical, but Windows 8 introduces uncertainties and delays for application developers.

To protect their investments, and to maximise the portability of their products to different device types in the near future, most software vendors are shying away from developing apps that use features specific to Windows 8. Instead, they are cautiously developing OS-independent browser-based apps for the time being.

The other crucial part of the ecosystem is of course the hardware vendors, who need to feel that Microsoft will support them. But by trying to sell its own hardware, Microsoft has turned some of its partners into competitors. Hardware vendors now have more viable OS options these days, and although Microsoft used to be the only game in town, vendors can opt for Android, and as Samsung found out, Android can dramatically increase the chances of success of a hardware platform.

Those hardware vendors that do partner with Microsoft are likely to come out with devices in new and different form factors, creating more uncertainties for enterprises. IT directors wanting to roll out new systems will have to either support a greater variety of form factors or impose stricter limits one what ones they will support.

In addition to having to deal with the uncertainty created around the budding Windows 8 ecosystem, IT directors are concerned with other aspects of Microsoft’s new operating system.

For Phil Jordan, Group CIO of Telefonica, the integration of the Microsoft account – the single sign-on web service previously known as Windows Live ID – poses security and compatibility issues.

“The increasingly integral role of a Microsoft Live ID will be problematic for enterprise customers. It’s clear what Microsoft gets from integrating their ecosystem with the use of Microsoft Live ID, but I can see it being a problem for enterprises,” says Jordan.

“Inevitably, application compatibility will be a challenge to overcome for CIOs. With significant parts of the world still running on the legacy ‘soon to expire’ Windows XP, the move will have to be planned and executed carefully.”

End of the road for XP

Free support for XP will end on April 2014, so those organisations still running that version of Windows will have to make a decision relatively soon. They can either pay for support after April 2013 or climb aboard the Windows 8 bandwagon.

Other than those IT directors who are forced to move away from XP, few are moving full speed ahead with Windows 8. Most have chosen to stick with Windows 7, knowing it will be supported for several years to come.

According to Brent Council’s Conaway, most CIOs will plough on with their current release rather than spend time and money migrating to Windows 8.

“Few commercial users demand to have the latest version of Windows. They want a reliable and useful experience. As such, no one is really forced to make the upgrade. Most will wait,” he says.

“Most CIOs think about cost, the time to convert, and the benefits. Then they weigh all that against alternative projects. Most seem to agree that there will not be a land rush to convert to Windows 8. Most companies are still working with or recovering from the migration to 7, so unless there is a compelling reason, they won’t make a big change.”

Robert E Lee, IT director of logistics company Bibby Distribution, sees no benefit in migrating to Windows 8 and in terms of tablets and mobiles may back an existing, tried-and-tested technology.

“Bibby continues the drive to deploy Windows 7 and sees little merit to extending this to include Windows 8,” he says.

“The new product still seems to be evolving its style and design and does not have the added benefits that warrant any form of migration at this stage. In the mobile arena we are likely to standardise on Android rather than Microsoft as the software we will use already has the apps we require and it provides a wide range of device options.”

Sticking with 7

Pamal J Sharma, head of IT at Fujifilm UK, thinks that Windows 8’s tablet-based interface holds no benefits for his organisation.

“I would say that we have no plans to move to Windows 8 at this point, as it is very much a ‘touch-centric OS’, and there are too few appropriate devices that will run the corporate applications we need everyday that will be usable on a sensible laptop-style device,” Sharma says.

“Windows 8.1 is being watched, but it looks like it will be some time before full support is available for popular corporate applications. Since Windows 7 is reportedly still to be supported by Microsoft until 2020, this stable OS will remain our workhorse for now.”

Granted, Microsoft has had to respond to the rapid uptake of the two new hardware paradigms (tablets and smartphones), and Windows 8 is its attempt to gain share in what promises to become the most important markets for operating systems. But, says Telefonica’s Phil Jordan, it should also keep a close eye on their enterprise users, before they start losing that market too.

“Microsoft has to help CIOs get down their product roadmap with great functionality, interoperability and migration assistance,” says Jordan.