Windows Upgrade on Tablets Challenges Our Business Model, Says Microsoft

By | Aug 7, 2012

Until now, tablets didn't run Windows. Since the number of tablets shipped is increasing rapidly, and since some of the work being done on tablets is not being done on desktop computers, some tablets are likely to replace PCs. The question until recently has been what effect this will have on the Windows operating system and Microsoft.

Then Microsoft introduced Windows 8 with a tablet version. In October, you'll be able to download an inexpensive Windows upgrade for your PC, and it will work just like a new Windows tablet and even look like a Windows phone. But there are risks.

Microsoft discusses them in its recent annual filing with the SEC, and PCWorld reports on some of the details. Microsoft sees a risk from tablets that run operating systems other than Windows, but it also admits to risks from offering Windows on tablets and offering its own Windows Surface tablet. With regard to tablets, Microsoft says, "Users may increasingly turn to these devices to perform functions that would have been performed by personal computers in the past." True. But the Surface Windows tablet "will compete with products made by our OEM partners, which may affect their commitment to our platform." Faced with two poor choices, Microsoft has chosen the one that keeps it in the market, as long as Windows tablets are successful.

For the IT departments of midsize businesses, the Microsoft SEC filing emphasizes that Microsoft and Windows are in transition and even Microsoft doesn't know how the market will develop. The complete filing is on the SEC website. Microsoft discusses the risks of a declining market share with the existing situation and the problems with adding a Windows tablet. The message that comes across is that the risk for Microsoft customers lies in jumping on the Windows upgrade bandwagon before the new concept has proven itself. On the other hand, for businesses committed to the Windows/Office environment, it makes sense to become an early adopter so the products have a chance to show what they can do.

Businesses of all sizes, where the IT department is a Microsoft shop, will probably want to take advantage of the low-cost Windows upgrades available until January 2013. Office 2013 will be coming out and will integrate well with Office 365 and Windows 8, whether on desktops or tablets. A successful Windows tablet may even put a dent into BYOD--why do you need your own tablet if you can work remotely on a Windows tablet provided by your business?

Many other businesses will want to evaluate their options. Non-Windows tablets may be less expensive. Google Apps costs less than the Microsoft cloud with Office 365, if you don't need the advanced functionality of MS Office. Very few companies will be able to or want to banish Microsoft products completely, but they can easily run fewer Windows desktops. Microsoft is right in describing tablets as disruptive for their business. The company has chosen a path that keeps it in the game, but the risks for the business as well as for their customers are still there.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.