Microsoft (NASDAQ:MSFT) recently unveiled Windows 10, the number-skipping update which will succeed Windows 8.1, Windows RT, and Windows Phone 8.1 when it launches next year. This new OS will be the first major step toward realizing CEO Satya Nadella's "One Windows" strategy -- in which smartphones, tablets, and PCs are united under one cross-compatible operating system.
While this certainly represents a major way to defend against Apple (NASDAQ:AAPL) and Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) advances in the mobile consumer market, it could also have huge implications across the healthcare industry, which Apple is trying to conquer with its HealthKit platform.
What "One Windows" would mean for healthcare
Microsoft Windows is still installed on over 90% of the world's PCs, according to Net Market Share. But that market is highly fragmented -- 51% still use Windows 7, 24% remain on Windows XP, 13% are using Windows 8 or 8.1, and 3% remain on Vista.
Although Microsoft ended mainstream support for XP in April, cybersecurity firm Cylance reported that a major U.S. hospital still had XP installed on over 100,000 machines when the deadline passed. That leaves the computers exposed to various bugs and exploits, which could result in patient data breaches and violations of HIPAA regulations.
That's why Microsoft will likely give away Windows 10 as a free upgrade to Windows 8 users. Other rumors suggest that XP, Windows 7, and Vista users will be offered steeply discounted upgrades as well.
Computerworld estimates that free upgrades from 8.1 to 10 could put Microsoft's newest OS on half of all PCs worldwide by the end of 2015. That would help hospitals finally reduce OS fragmentation and ensure that patient records are properly protected.
Why the Surface still matters in hospitals
Microsoft's Surface Pro 3 isn't as loved as Apple's iPad among consumers, but it has fared better in hospitals. Back in June, Seattle Children's Hospital and the University of Pittsburgh Medical Center both deployed the device to replace their aging laptops.
One main reason was that the Surface Pro 3, which runs on Windows 8.1, offered better backwards compatibility with older software than iPads. Moreover, the Surface Pro 3's two-in-one form factor means that physicians can use a single device in their office and at the patient's bedside, instead of relying on the desktop for the former and an iPad for the latter.
Why Apple is a major threat
Microsoft still dominates PCs in hospitals, but Apple is gaining ground thanks to rising iPhone and iPad use among physicians. In the U.S., relaxed BYOD rules benefit Apple, which controls 42% of the smartphone market, according to comScore. iPhones also don't suffer from the hardware and software fragmentation that plagues Android devices, which makes it easier for developers to test their apps and devices.
Those two factors caused physician demand for "native" iPad EHR apps, which are tethered to the cloud instead of a Windows desktops, to rise. A Black Book Rankings survey last year found that among physicians who use mobile medical apps, 68% used iPhones and 31% used Android devices.
Apple recognizes those strengths in the healthcare market. That's why it launched HealthKit, a unified platform which connects an individual's fitness app and wearables data with major EHRs and insurers within a single iOS 8 app.
Why Windows 10 could be a game-changer
While it looks like Apple could cut Microsoft out of the healthcare loop by skipping over PCs altogether, Windows 10 represents a way to strike back.
Since Windows 8.1 phones will be upgraded directly to Windows 10, apps will become cross-compatible between phones, tablets, and PCs. This means that hospitals which have deployed the Surface Pro 3 could encourage their physicians to use Windows Phones instead of iPhones for better cross-compatibility between apps. That could certainly boost sales of Windows Phones, which only account for 3.3% of the U.S. smartphone market.
Since Microsoft has confirmed that Windows 10 can "scale down" (similar to desktop and mobile versions of webpages) depending on the device, we could see single EHR programs with device-specific modes, rendering "native" tablet or phone apps obsolete. In other words, the same Windows 10 EHR program could be used at the desk, at the bedside, and on the phone.
Moreover, Microsoft recently synchronized its MSN Health & Fitness app to Azure, its cloud platform, instead of HealthVault, its aging personal health records one. This indicates that Microsoft could encourage more EHR and wearables companies to synchronize their data with Azure, which could become a very formidable opponent for HealthKit.
The Foolish takeaway
In conclusion, Windows 10 could help Microsoft retaliate against Apple in hospitals. Fighting back against Apple and its dominant mobile market share and cross-industry HealthKit partnerships will be tough, but not impossible. Microsoft still has a dominant share of the PC market, an upcoming OS which combines PCs with tablets and phones, and a robust cloud platform which could easily rival HealthKit when properly armed.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), 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.