Why Microsoft Dropping Support for Windows 7 Isn't as Drastic as it Sounds

Microsoft (NASDAQ: MSFT  ) is going all-in on Windows 8.

The company stopped offering security updates for Windows XP earlier this year, despite the fact that around a third of its customers used the operating system. Now it has announced plans to end "mainstream support" for Windows 7, even though more than 50% of people using Windows use that version, according to Netmarketshare.

Mainstream support will be terminated on Jan. 13, 2015.

That sounds awful -- like the company will be leaving Windows 7 users to the mercy of whatever Internet villain wants to infect their computers. In reality, the end of mainstream support is just the beginning of the winding down of that OS.

Microsoft may want consumers to think they need to upgrade to Windows 8.1 or put the safety of their machine at risk, but that won't be the case until Jan. 14, 2020, when it drops extended support.

What is Microsoft doing?
The concept of having two different end dates for OS support seems like something written by a lawyer -- and it almost certainly is. Microsoft attempts to explain on its website, but the explanation still makes it seem like it will actually stop supporting the product next year:

End of support refers to the date when Microsoft no longer provides automatic fixes, updates, or online technical assistance. This is the time to make sure you have the latest available update or service pack installed. Without Microsoft support, you will no longer receive security updates that can help protect your PC from harmful viruses, spyware, and other malicious software that can steal your personal information. 

In reality, pretty much nothing happens when mainstream support ends. All of the things in the paragraph above happen when extended support ends. That means Windows 7 users have another five-plus years before they really have to worry.

The clock is ticking
What's interesting here is not that Microsoft will eventually drop support for Windows 7, but that it's confident enough in Windows 8 that it's willing to put an expiration date on its much more popular OS. As of June, Windows 8 and 8.1 had a combined market share of nearly 13%. Windows 7 had 50.6% -- a number that has actually climbed from 46.4% in October 2013, according to Netmarketshare.

A new operating system usually cuts into market share for its predecessor. Windows 8, with its touch-based "Metro" interface that sort of works like an Apple (NASDAQ: AAPL  ) iPad, has actually made Windows 7 more popular. Microsoft has been working hard to correct this by adding more Windows 7-like features that had been absent from the first version of the newest OS.

By stuffing a version of Windows 7 inside Windows 8.1, the company is trying to have its cake and eat it, too. So far, this has not really worked.

Putting a hard end date on Windows 7 may be the catalyst that leads customers to adopt the new OS. It could also send former Windows users running to Mac or machines running Google's (NASDAQ: GOOG  ) Chrome or Android operating systems.

What is Microsoft risking?
Windows is still a huge business for Microsoft.

Despite the slow adoption rate for Windows 8, Microsoft's Windows division has done more than $18 billion in revenue for each of the past three years, according to Microsoft's 2013 annual report. The company does not specifically break out Windows data in its quarterly reports, but it did say in its third-quarter earnings release that "Windows OEM revenue grew 4%, driven by strong 19% growth in Windows OEM Pro revenue."

Some of that growth can be attributed to the end of extended support for Windows XP. That move forced companies to upgrade from the 13-year-old operating system, which produced a spike in sales. But  only some of those users moved to Windows 8. Others opted for Windows 7 or chose to leave Microsoft entirely.

Microsoft has told retailers it will stop selling Windows 7 on Oct. 30  2014.  No date has been set regarding when Microsoft will stop selling Windows 7 to its OEM partners for use on machines sold to companies. For that, Microsoft may be waiting for a version of Windows 8 that people -- specifically business customers -- actually like.

Microsoft wants to move its user base onto Windows 8, but it does not seem foolish enough to drop a product that more than 50% of its customers use.

Windows 8 is not so great
Windows 8 faced customer resistance because it was a huge departure from the previous version of the OS. It offered an entirely new interface that is designed to work on a touch screen. The problem is that most people using it are not using touch screens.

On a non-touch computer, Windows 8 is, at best, less than intuitive. At worst, it's maddeningly frustrating. (I worked on the Windows 8 Finance App for a year before, during, and after the Windows 8 launch. I was one of the first to use the OS, and I have trouble doing basic things on a non-touch screen.)

Windows 8.1 fixes some of that by restoring some of the old functionality. The next version will do even more. Microsoft was right that a touch-based interface is the future of all personal computing. For an OS based on touch to work well, however, the devices sold have to catch up. It seems likely that they will.

With touch-based Windows 8 laptops available for less than $300, it seems likely that more consumers will buy them. If touch has not become nearly omnipresent by 2020, Microsoft has made a bad bet. The rise of tablets and hybrids, coupled with the inclusion of touch on an increasing number of PCs, makes that seem unlikely.

As people buy machines with touch screens, they will experience the new OS as it was designed. That should speed adoption and make the end of support for Windows 7 much less frightening.

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