Microsoft’s Windows 8: A Bold Product Strategy For A Changing IT Landscape


A dizzying array of devices running Windows 8

My colleague Nick Petri posted last week critiquing Microsoft’s product strategy with Windows 8. His chief concern was that Windows 8 is too much too soon and is too disruptive. Many industry insiders feel Steve Ballmer is betting the house on Windows 8 after nearly missing the boat on tablets and smartphones.

Microsoft has dominated the traditional PC space for so long that some feel they should have played it safe. After all, they are a multi-billion dollar company that is still making a profit. But there is one problem:

The Disruptive Innovation Problem

The concept of Disruptive Innovation was pioneered by Harvard Business School Professor Clayton Christensen. Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. You can hear Professor Christensen speak more about this concept here: Disruptive Innovation Explained.

A perfect example of a “disruptive product” is your cell phone. While initially bulky, expensive, and with poor sound quality, cell phones are rapidly disrupting landlines. In addition, given the advantage cellular technology offers, payphones are now largely a relic of the past.

In the IT world, the PC has begun to be disrupted by tablets and smartphones. Powered by battery friendly ARM processors, they’re able to do basic tasks that most consumers use PCs for. And they do so at a fraction of the cost of the traditional PC. Microsoft’s dominance in the consumer market was being threatened and they were dangerously close to being left behind. Many an IT company has failed to grasp the threat emerging technologies have posed (Wang Computer, Digital, Palm, etc.) and as a result they’ve been consigned to the annals of history.

Microsoft’s Dilemma

Microsoft hadn’t simply rested on its laurels during these changes in the marketplace. They had released Windows Mobile based phones and tablets. But the consumer market has greeted these products with a collective shrug and continued to buy Android or Apple smartphones and tablets at a dizzying pace.

In addition, Microsoft faced another problem: Developers. Steve Ballmer famously stressed the importance of software developers at a Microsoft conference many years ago. A software platform is only as good the breadth of software available for it. Given the popularity of tablets and smartphones, developers are seeking to write applications for platforms that offer them the best opportunity. Because Windows Phones are neither popular nor widespread Microsoft has faced continued problems attracting developers to create apps. The situation was compounded by the fact that an app developed for a Windows Phone wouldn’t work on a Windows 7 PC.

The Bold Product Strategy

Microsoft knew that without a common platform, they would never be able to compete with the likes of Apple and Google. They were already late to the game, and needed to make a dramatic shift in their product strategy.

Windows 8 gives Microsoft a common platform to compete across a broad spectrum of devices: traditional PCs, laptops, tablets, smartphones, etc. By utilizing a common operating system, they provide developers a much broader marketplace to develop their Apps for. Developers can be assured if they develop the next “Angry Birds” they will be able to port their App to work across all devices running Windows 8.

Why Consumers and Developers Alike Will Embrace Windows 8

1) Windows 8 certainly comes with a steep learning curve, but it simplifies the Windows Experience dramatically.

2) It allows Microsoft to leverage their dominant position with developers in the Enterprise space and give the developer audience a common set of software development tools, a common marketplace, and a common operating system to develop for.

3) Most importantly, it makes Microsoft relevant in a world that is rapidly moving towards smartphones and tablets.

Change is disruptive, but Microsoft has done this before. Each leap ahead (From DOS to Windows 3.1 to Windows 95, for example) has resulted in disruption to consumers and enterprises alike. That said, once they adjusted they were sold on the performance improvements and capabilities each successive generation offered.



Sudip Verma
Sudip Verma
Corporate Strategy, Sales Operations

Sudip is in charge of Corporate Strategy, Sales Operations at Alegeus Technologies. Previously, he worked at OpenView from 2012 until 2014 with portfolio companies to provide insights on the markets they operate in, their customers, and drive development of business strategies.
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