Microsoft's (NASDAQ:MSFT) newest operating system, Windows 8, is gaining market share at a slower rate than its predecessor, Windows 7. This has caused some to proclaim that Windows 8 is a failure, but it's important to put the data into perspective. A single chart, like that shown in an article on Business Insider earlier this month, does not even come close to telling the whole story.
In the first thirteen months after release, Windows 7 gained PC market share at a significantly higher rate than Windows 8. This seems like terrible news for Microsoft, but it's not as simple as that.
Fleeing from Vista
Windows XP was released in 2001. At its peak, more than 80% of PC users had adopted the operating system. XP was the first modern version of Windows, and it brought the personal computer into a new era. It would take five years for Microsoft to release Windows Vista, an OS plagued with serious issues and generally recognized as a flop.
About three years later, Windows 7 was released, and the operating system was a breath of fresh air compared to Vista. Windows 7 had the benefit of both Vista users abandoning the OS and Windows XP users finally being provided a real reason to upgrade. Windows XP and Windows 7 were released eight years apart.
Windows 8 came just three years after Windows 7, and with the former a perfectly solid and competent OS, there was little reason for users to upgrade. Windows 8 followed a more organic path, where market share was gained from new PC sales instead of XP users upgrading en masse. So, although Windows 8 has gained market share more slowly, Windows 7 had some big advantages working for it.
The slow-moving enterprise
Support for Windows XP is set to end next April, and it seems that enterprise customers have been choosing Windows 7 instead of Windows 8. Enterprise customers do not move quickly when it comes to upgrading PCs, and they often wait for at least two years after an OS is released to even think about upgrading. Windows 8 has been out for a little more than a year, so the lack of enterprise market share isn't really that meaningful at this point.
For Microsoft, none of this really matters. Windows licenses are still being sold, and regardless of whether it's Windows 7 or Windows 8, Microsoft is still locking customers into the Windows ecosystem. That's the important thing for the company.
Windows is here to stay
Enterprise customers have too much invested in Microsoft products to even consider switching to anything else. Google (NASDAQ:GOOGL) has its Chrome operating system, which has gained a small amount of popularity with consumers, and Apple (NASDAQ:AAPL) has Macs, but the idea that enterprise customers are going to abandon Microsoft is ridiculous. Windows has been battling a completely free alternative -- Linux -- for years, and it doesn't have a single scratch on it. In enterprise, Windows is king, and that will not change anytime soon.
Google has been trying to push its Chrome OS into the enterprise space, with the idea that its apps, such as Gmail and Documents, are enough to sway customers away from Windows. Some companies have switched from Microsoft Office to Google Docs, but Office is still the de facto standard. Couple that with the fact that many companies use applications that are Windows-specific and mission-critical, and Google clearly has a herculean task ahead of it.
Some companies use Macs instead of PCs, but given that Macs are typically significantly more expensive, there's really no chance of Apple gaining too much ground on that front. Apple is pushing the iPad as an enterprise device, but this doesn't really replace the PC. If anything, it supplements it, and with Windows 8 tablets and convertibles on the market that can compete in terms of battery life, performance, and price, the enterprise iPad becomes a harder sell.
The bottom line
It's a fact that Windows 8 is being adopted at a slower rate than Windows 7, but Windows 7 benefited from the failure of Vista and an eight-year gap between Windows XP and itself. Windows 8 has no such advantages. Ultimately, what matters is not which version of Windows is being adopted, but that Windows is being adopted in the first place. Tablets have pressured Windows on the consumer side, but on the enterprise side, Windows is still king.
Timothy Green owns shares of Microsoft. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.