Can Microsoft Survive the XPocalypse?

Microsoft ended its support of Windows XP earlier this week, leaving thousands of businesses prone to virtual attacks in the coming months unless they upgrade to a newer operating system. Google hopes its Chrome OS instead of a newer version of Windows.

It's not just Google that Microsoft has to worry about, however. Samsung is going after the enterprise market with its Pro line of tablets in an attempt to tap a niche of the market Apple still dominates and take share from PCs.

With the expected enterprise system migration, Google is pushing Chromebooks aggressively and tablet options are looking more attractive. Will Microsoft's reward outweigh the risk its taking?

What's at stake?
Windows XP is tremendously popular for a 12-year-old piece of technology. As of January, the OS was installed on 29.5% of PCs, according to Net Applications. Only Windows 7 is a more popular OS.

Businesses, in particular, stuck with Windows XP because it's simply good enough. It runs everything they need, and doesn't take up too many resources. There's no reason to spend money upgrading systems when it's unnecessary.

With the end of Microsoft's support for the OS, however, businesses will need to open their wallets. Some institutions are reportedly paying Microsoft to provide additional support for XP. Others are upgrading to Windows 7. This is exactly what Microsoft wants.

Others, still, may find solace in a new platform. This is exactly what Microsoft doesn't want.

New software or new computers?
As mentioned, many businesses now facing a necessary expense. Since businesses typically like minimizing expenses and maximizing value, they're going to find an option that will balance both.

The first option is to pay Microsoft in some form. Whether that's upgrading to a newer version of Windows or paying Microsoft to support XP, Microsoft will gladly take their money.

Google is hoping it can attract businesses with special offers on Chromebooks for business. The company is offering $100 off its already low-priced computers for businesses. Moreover, it's teamed up with VMWare and Citrix to provide cloud computing services that will make the transition from XP to Chrome OS nearly seamless. Google is also offering a discount when bundling those services with a Chromebook.

Even with the discounts, however, a complete overhaul of an enterprise hardware likely carries a higher up-front cost than upgrading software. The benefits will come long term as the company adds additional hardware. Still, many businesses will hesitate at a large up-front cost and necessary workarounds to continue using legacy software. It's not an easy solution to sell.

What about tablets?
A growing trend is the deployment of tablet computers in the workforce. Apple won 8% of global business and government spending on computers and tablets in 2012, up from 1% in 2009. The iPad is the biggest driver behind Apple's share gain, and Forrester Research expects Apple's share to climb to 11% next year.

Samsung, which also makes Chromebooks, is gunning for the market with its Pro line of Galaxy tablets. The Korean electronics maker unveiled the new tablets earlier this year, prominently featuring their 12-inch displays. Apple is rumored to release a larger iPad this year as well.

Samsung will have to overcome the same hurdles as Google's Chromebooks, however. More than 90% of business apps are written for iOS, just as enterprise PC software is written for Windows. The added expense of migrating to Android may curb Samsung's success in professional-level tablets.

Others may gain, but so will Microsoft
As businesses weigh their options, Microsoft will surely see some additional revenue in the form of Windows upgrades or commissioned support. That revenue could be curbed by other companies, particularly Google, aggressively going after the enterprise market given this opportunity.

Google hopes that proliferating Chromebooks within enterprises will increase the use of its services. This may be the case, but Microsoft, too, offers cloud computing solutions that can work with Chromebooks. Notably, Office 365 includes web apps that run on Chromebooks. Additionally, Microsoft just released Office for iPad, which means Microsoft can capitalize on the increase in tablets in the workforce without selling its own tablet. Overall, Microsoft should see the benefits outweigh the risks of ending XP support.

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Adam Levy owns shares of Apple. The Motley Fool recommends and owns shares of Apple, Google (A shares), and Google (C shares). It also owns shares of 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.

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