The end of Windows 7 is drawing near: Microsoft (NASDAQ:MSFT) has finally stopped selling the consumer version of its massively popular operating system. Although Windows 7 remains the most commonly used incarnation of Windows, its days are increasingly numbered.
Hewlett-Packard pushes Windows 7
It will take some time, but Microsoft's latest move is likely to push more PC users onto Windows 8. Given that Windows 8 is now more than 2 years old (and has already received a major revision in the form of Windows 8.1), the shift should already be well under way, but Microsoft's hardware partners have continued to push 7 at 8's expense.
Hewlett-Packard (NYSE:HPQ), for example, made Windows 7 the central focus of a marketing campaign earlier this year, declaring that Microsoft's 2009 operating system was "back by popular demand." HP went so far as to offer buyers $150 discounts on new PCs if they opted for Microsoft's older operating system. Other PC OEMs were less public in their support of Windows 7, but have continued to offer it to interested buyers.
The end of Windows 7
But that will end as soon as existing supplies are exhausted. Windows 7 Professional will be offered on business-class PCs for an additional year, but consumers in the market for a new PC will have to make do with Windows 8.
According to NetMarketShare, Windows 7 is installed on just over half the desktop PCs currently in use, with Windows 8 and 8.1 accounting for slightly less than 17%. The sluggish adoption is not particularly surprising, given that Windows 8 has elicited a fairly strong backlash.
The introduction of Windows 8, and Microsoft's dramatic shift in strategy -- entering the PC market with several devices of its own, notably the Surface Pro -- angered many of its hardware partners, including both HP and Acer. Samsung blamed Microsoft, and Windows 8 in particular, for the recent downturn in PC sales, arguing that the Windows platform as a whole had become less competitive.
Stronger Windows 8 adoption would benefit Microsoft, as it looks to draw developers to its app store, but the inability to purchase a Windows 7 machine could entice some of Microsoft's customers to other platforms. Apple's Mac has continued to grow its market share, and is currently sitting near an all-time high. Google's Chrome OS has also seen its popularity surge, though its market share remains in the single digits.
The shifting Windows business
Windows 8 represents the biggest change to Microsoft's operating system in nearly 20 years, and the business is likely to continue to evolve at a rapid pace.
In particular, Microsoft's days of charging for its operating system could be over. In October, analysts at Gartner argued that if the next version of Windows -- Windows 10 -- wasn't free, then the version afterward must be. Already, Microsoft has made some versions of Windows free to its hardware partners, and as it shifts to cloud services, this trend should continue. Microsoft's rivals in the operating space -- Apple and Google -- offer their users operating system updates for free. To stay competitive, Microsoft may be forced to follow.
Given that Microsoft's share of the tablet market remains in the low single digits, and its Windows 8 app store remains a sparsely populated wasteland, it seems fair to say that Windows 8 has been a failure. Windows 10 looks promising, but until it launches, new PC buyers will have to accept Windows 8.
Sam Mattera has no position in any stocks mentioned. 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.