Almost 10 months after its launch, Microsoft (NASDAQ: MSFT ) Windows 8 still lags way behind its predecessor Windows 7. While any new OS takes a while to get off the ground, there are two major reasons why Windows 8 is struggling.
People don't need a new OS
Right now, Windows 8 takes just 5.4% of the entire Windows OS market share pie, and last month, it moved up just 0.3%. June saw the biggest uptick in percentage, likely because of the release of Windows 8.1 Preview, but even with that the gain, it was still less than 1%.
In recent interview with IDC, CNET found that companies are taking their time upgrading to new operating systems, and many of them are making the switch to Windows 7 – not 8. IDC said that Dell and HP have reported that most of their clients are choosing to move to Windows 7.
Companies are hesitating to upgrade, at least in part because of the drastic user interface changes from 7 to 8. A new focus on apps, touch screen capability, and the former start button fiasco has given IT departments too many reasons to hold off. Training users to adapt to a new OS can cost a lot of time and consequently hurt productivity.
Tablets are king
On the consumer side, things are a bit less strategic. Consumers are shifting their attention away from PCs in favor of tablets -- which brings down Windows 8 adoption rates. Yes, Microsoft sells the Surface Pro running the new OS, but if you haven't heard yet, those devices aren't selling so well. And let's not even get started on Surface RT tablets.
Consumers are simply choosing tablets over PCs, which has caused global PC unit shipments to drop five consecutive quarters in a row -- and a 10.9% drop in the second quarter of this year alone. Ironically, IDC said back in April that Windows 8 not only hasn't helped the PC market, but has actually slowed it. According to IDC and Gartner, hybrid laptops -- a cross between a tablet and PC -- aren't fairing much better. Unfortunately for Microsoft, it's not Surface tablets that consumers want. Android tablets took off in the second quarter of this year, while Microsoft took just 4.5% of global tablet shipments over the same period.
Microsoft's future is tied up with both its enterprise solutions, and its consumer products, and investors should really keep an eye on both sides of the company's business to see how Microsoft is performing. Unfortunately for the company -- and its shareholders -- Microsoft is struggling to get Windows 8 off the ground, and sell tablets. The recent release of Windows 8.1 Preview may help calm some fears about the Redmond company's software, but it's not enough to turn the tide just yet. Microsoft needs to continue listening to its customers so it can make adjustments to its software and devices. Without those changes, things may keep moving in the wrong direction for the company.
I don't see Microsoft turning a corner on tablets or Windows 8 anytime soon -- but that doesn't mean they're out of the tech game. The company still has significant influence over the PC industry and -- if it listens to consumers -- could become a major player in the tablet market. But four other tech companies are on the heels of Microsoft. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.