Microsoft Really Wants You to Buy Windows 8

Microsoft is so eager to have customers update to its newest operating system that it's dropping support for the second most popular OS currently on the market.

Feb 15, 2014 at 9:12AM

Microsoft (NASDAQ:MSFT) wants customers to switch to its Windows 8 operating system so badly that it's willing to abandon nearly 30% of the entire personal computer market.

On April 8, Microsoft officially ends support for its Windows XP operating system, which according to Net Application as reported by USA Today, still held a 29.2% market share in January. That places the OS only behind Windows 7, at a 47.5% share, and well ahead of the two released versions of Windows 8, which have about a 10% share, according to the study.

What does no support mean?

On the plus side, nothing specifically terrible happens to a computer running Windows XP on April 8. The actual damage will be further down the road as Microsoft will stop creating system patches for the OS and will no longer issue updates that protect XP users from viruses. That may well be like letting a 10-year-old loose in a candy store as hackers -- always an opportunistic bunch -- likely won't follow Microsoft's lead and will continue making viruses targeting newly helpless XP users.

Microsoft explained the decision on is website.

"Microsoft has provided support for Windows XP for the past 12 years. But now the time has come for us, along with our hardware and software partners, to invest our resources toward supporting more recent technologies so that we can continue to deliver great new experiences…. Microsoft will also stop providing Microsoft Security Essentials for download on Windows XP on this date. (If you already have Microsoft Security Essentials installed, you will continue to receive anti-malware signature updates for a limited time, but this does not mean that your PC will be secure because Microsoft will no longer be providing security updates to protect your PC.)"

If you continue to use Windows XP after support ends, your computer will still work but it might become more vulnerable to security risks and viruses. Also, as more software and hardware manufacturers continue to optimize for more recent versions of Windows, you can expect to encounter greater numbers of apps and devices that do not work with Windows XP.

How much money is at stake?

Windows, which has had the same basic design since 1995, has been a huge source of profit for Microsoft. In 2011, according to CNN Money, "Windows brought in more than $18 billion in sales and $11.5 billion in profit. On its own, Windows would be big enough to place among the largest 150 U.S. companies by revenue, and its 62% profit margin would rank among the highest in the world."

That, of course, was 2011 and since that time, Microsoft's empire has shrunk. PC sales have declined dramatically and a large percentage of users have moved from the Windows-based PC world to iPads powered by Apple's (NASDAQ:AAPL) iOS or tablets running Google's (NASDAQ:GOOGL) Android.

Windows 8, which also powers tablets and phones (unlike the Apple and Google operating systems, which are specific to tablets) is Microsoft's attempt to keep users in its infrastructure. The theory is that while iPads and other tablets are tempting, users, especially business IT people, will want to have one OS for all their devices. If that proves true, it should help Microsoft grab a bigger share of the expanding tablet market shown on the chart below.

Statistic: Number of tablet PC users in the United States from 2010 to 2015 (in millions) | Statista
Find more statistics at Statista

Is it working?

While its market share compared to XP and 7 remains poor, there are signs that the strategy of having one operating system for all devices is winning a still small but growing share of the tablet market for Microsoft. CIO.com in January was bullish on prospects for Windows 8, driven by the enterprise market (where Microsoft has always dominated).

"The stars are aligning in Redmond, and there's a good chance that Microsoft can lead the tablet race after being smothered by Apple and Android in 2013. Microsoft hasn't been in such a strong position for years," wrote Tom Kaneshige.

Microsoft also reported some good news in its Q1 2014 earnings reports. "Surface revenue grew to $400 million with sequential growth in revenue and units sold over the prior quarter," the company said.

Say goodbye to XP customers

"There is a risk," Microsoft spokesman Tom Murphy told USA Today. "How big a risk we can't quantify." But Murphy is unequivocal in advising consumers to part ways with the operating system that many have loyally stuck by all these years. "We're really black and white about that."

Clearly, it's too early to declare whether the Windows 8 strategy of one OS for all devices will work, but at least the news is more positive than it was when Windows 8 first launched. Another big step is whether some of the abandoned XP users will upgrade to Windows 8 devices (be they tablets or PCs) or leave for Apple, Android, or even devices running Google's Chrome operating system.

The next step for you

Want to figure out how to profit on business analysis like this? The key is to learn how to turn business insights into portfolio gold by taking your first steps as an investor. Those who wait on the sidelines are missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you what you need to get started, and even give you access to some stocks to buy first. Click here to get your copy today -- it's absolutely free.

Daniel Kline is long 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers