Should Microsoft Release A New Windows Versions More Often?

Just a few years back, Microsoft was crowing about Windows' vastly improved delivery cadence. Microsoft's unified OS group, or OSG, has improved its delivery pace of new Windows versions from the usual every 2.5 to 3 years to about once a year. Is the current pace good enough for Windows customers, though?

Apple has generally been running at a higher cadence as far as releasing new Mac OS X versions is concerned. Since Mac OS X went into beta back in March 2000, Apple has released 10 subsequent versions over the years, with the last version (Mac OS X 10.9, aka Mavericks) hitting the market in October last year. That's about a new version every 1.3 years or so.

Importance of Windows ecosystem to Microsoft
Microsoft enjoyed a near-monopoly status with its PC operating systems, enterprise productivity applications, and web browsers for many years. The company, however, made some big missteps in the mobile revolution arena, and still has not yet fully recovered.

Microsoft still makes boatloads of cash from its huge install base for Windows operating systems, Windows Server technologies, and Microsoft Office, however. Microsoft made $19.23 billion from Windows OSs in 2013, including Windows for Surface tablets and other hardware. That translated to 24.7% of the company's full-year revenue for fiscal 2013.

Source: Microsoft 10-Ks

Long story short: despite making some big missteps in recent times, Microsoft remains a very profitable company.

Windows OSs have always enjoyed an overwhelming market share, with the combined share of all Windows operating systems consistently remaining above 90%. However, Microsoft's market share recently dipped below 90% for the first time while Mac OSX rose to 8.34% in March this year. The fact that this happened at a time when there was a lot of hue and cry going on concerning the shortcomings of Windows 8 is, perhaps, not a coincidence.

Windows 8.1 updates
Russian Windows leaker Wzor claims that a Windows 8.2 update could hit the market around September, only five or six months after Microsoft released the first Windows 8.1 update.  According to Wzor, the second Windows 8 update may include a version of the new Start menu that Microsoft touted during its Build 2014 developer conference. The new version is, however, not likely to run Metro-Style apps in floating windows.

Even with the Windows 8.1 Update, which added features that help mouse/keyboard users to navigate better, many business customers have not found the latest version compelling enough to warrant mass adoption. According to NetMarket share, Windows 8.1 had a 5.88% market share in April this year, while Windows 8 commanded a 6.36% slice of the market. Both are still well below Windows XP market share of 26.29%, despite Microsoft having withdrawn support for the OS in early April.

Interestingly, Tech Pro Research conducted earlier this year showed that more Windows XP users preferred shifting to Linux instead of either Windows 8 or Windows 8.1. A much smaller percentage said that they planned to shift to Mac OS X. Most of the respondents said that they preferred moving to Windows 7. Microsoft would of course prefer that its beloved Windows versions cannibalize their less popular brethren than have Windows users shift to rival camps such as Linux or Mac OS X.

Source : Tech Pro Research

At the time of the survey, Windows XP enjoyed a 27.69% market share. The 12% of respondents who said that they planned to jump ship to join Linux and Mac OS X camps would translate to a 3.32% overall loss of market share for Windows, which is quite worrying.

Same delivery track as Windows Phone
Microsoft has rolled out three Windows Phone 8 updates and rumors suggest the Windows Phone team is contemplating not less than two updates in the current calendar year. Terry Myerson, Vice President of OSG, recently denied that Windows had ambitions to match its Phone counterparts in the number of new updates per year. Mr. Myerson was perhaps trying to avoid getting Windows users' hopes up until the team is 100% sure it can keep its promise. However, such a delivery rate would be most welcome for most Windows users.

Foolish bottom line
Microsoft has done a good thing by increasing its cadence of new Windows releases to at least once a year, but a bit faster cadence would be even better. By releasing updates and new versions more frequently, Microsoft can quickly mitigate disasters such as Windows 8 and prevent loss of share to competing OSs.

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Joseph Gacinga has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and 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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