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Can Windows 8 Save Microsoft?


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Microsoft's (MSFT) Windows 8 finally hits the shelves this week as the former monopolist struggles to remain relevant in a world going mobile. Microsoft almost completely missed the world's move from desktops to tablets and smartphones, resulting in a drop in their share of total PCs and devices from 95% to 30%, according to Forrester.

Windows 8 is Microsoft's attempt to both hold the enterprise space and make a mark in mobile devices. The question is whether or not trying to be all things to all people will result in a product that's nothing to anyone.

According to Henry Blodget, Microsoft is taking a massive risk fixing a product that isn't all that broken. "What people underestimate is the amount of time we have all put into learning Windows well over the years," he says. "If you're going to have to learn something new anyway, I think a lot of people are going to say, 'ok, I'll learn Apple (AAPL).'"

Like toasters and toilets, operating systems are more or less taken for granted. When Apple switches to a new OS named after some cat, the tech cognisenti goes wild, but consumers shrug. In the enterprise space which it still dominates, Microsoft is attempting to create buzz for a better version of what's not broken. Windows 8 is really designed for tablets and touch devices. The clunky laptops with touch screens that will go on sale at Best Buy (BBY) tomorrow are much ado about nothing.

Microsoft's Holy Grail is the Surface tablet being released tomorrow. The product is slick, fast and great looking. It's failing is the lack of applications available. An estimated 3,500 apps will work with the Surface on release compared to a seemingly infinite number of apps for the iPad and hundreds of thousands for Google's (GOOG) Androids.

It's going to take time to grade Microsoft's success or failure. If it can get IT departments to switch to 8 and make a dent in mobile devices, it'll be better than the trends in place today. Blodget sets a much higher bar.

If consumers rave and recommend the new devices to their friends, if the mixed reviews from the critics are shouted down by more open-minded consumers, and if IT departments find the improvements large enough to go through the hassle of switching to a brand new OS, Blodget will consider Windows 8 a success.

Microsoft would likely settle for anything better than Windows, Vista, and Zune.

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