Jun 22, 2021 - Technology

Why Windows needs a reboot

Data: Statcounter Global Stats; Chart: Axios Visuals

Microsoft is unveiling a new version of Windows on Thursday, and the refresh to its desktop operating system can't come soon enough.

Why it matters: While Windows still runs on nearly three-quarters of the world's computers, the operating system has been losing ground to MacOS and Chrome OS. Meanwhile, the company has all but given up on mobile, which is the main way people around the world access the internet.

While there are many ways Microsoft could improve Windows, a key area is helping people work across multiple devices, including smartphones (even if Microsoft isn't the one making them).

  • The company has scrapped several recent efforts to simplify its OS, most recently cancelling a version called Windows 10X.
  • "Windows 11 needs to deliver on the promise of Windows 10x — a cloud first, multi-device, agile OS that can enchant the young without scaring the old," said Carolina Milanesi, an analyst with Creative Strategies.

Catch up quick:

  • Microsoft has announced a June 24 event to detail the future of Windows.
  • A test build of the operating system has already leaked, but early versions often lack the key features of the final version, so what we have seen may not reflect Microsoft's full vision.
  • Microsoft has made only modest changes to Windows since the debut of Windows 10 in 2015, which itself was designed to merge the touch-first vision of Windows 8 with Windows 7, a desktop version that had remained popular with businesses.

By the numbers: A big chunk of Microsoft's revenue is still tied to the PC.

  • The company's "more personal computing" unit, which includes Windows, Surface and Xbox, accounted for $13 billion of the company's $41.7 billion in revenue last quarter, or 31%.
  • And that doesn't include any of the billions that Microsoft makes from Office. Sold largely by subscription now, Office does run on Macs and mobile devices, but most people paying for it run it on a PC.

Between the lines: Microsoft points to a revitalization of its PC businesses amid the pandemic. However, that boost will only benefit Microsoft long-term if it can convince more of the next generation of users and organizations to go with Windows.

  • Microsoft still dominates inside large companies, but today's startups frequently use Macs or give employees a choice.
  • Many schools, especially those in the U.S., have opted for Chromebooks because of their edge in security and manageability. That's creating a new generation of consumers that equate Google, not Microsoft, with desktop computing.

The big picture: Microsoft has made great strides in creating versions of its apps that run anywhere and transforming Azure into a platform-agnostic cloud service. However, the long-term health of its business still depends on a thriving Windows ecosystem.

  • Programs like Office, Outlook and Teams may run on all manner of operating system, but Microsoft has a home court advantage on Windows.
  • Many of Microsoft's future bets also rely on Windows. The company's HoloLens augmented reality headset is, at its core, a Windows PC on your face.
Go deeper