PC Shipments Plummet; Microsoft Implicated

IDC is reporting that worldwide PC shipments in the first quarter of 2013 were down 13.9% compared to the same period in 2012. Bob O’Donnell, IDC Program Vice President, Clients & Displays, put much of the blame on Microsoft:

“At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market. While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.”

This is probably a pretty fair assessment, but there’s much more that could be said. Microsoft has let the PC industry down in a major way, and Windows 8 is only one aspect of the larger failure.

Why do people (or businesses) buy new PCs?

After thirty-odd years, it’s safe to call the PC market ‘saturated.’ Everybody who might conceivably want a PC already has one. So virtually all new PC sales will be for replacement of existing units. And why would anyone replace their existing PC? Obviously, because the new one will do new stuff the old PC didn’t. And/or do the same stuff the old PC was doing, faster and better.

Making a PC ‘do stuff’ is Microsoft’s job. Well, actually the job of the software industry. But Microsoft wiped out most of the software industry a while back, so it almost comes to the same thing. (There was a time when Microsoft’s products really were superior with each new release.) Adobe is the notable exception. Graphic designers have a fairly strong motivation to upgrade their PCs to run the latest Adobe Creative Suite, because Creative Suite 6 is significantly better than Creative Suite 5. There’s a real pay-off in the upgrade. What used to be called a Return on Investment, or ROI… back when Microsoft still talked in those terms.

But aside from Creative Suite (now Creative Cloud), there’s precious little advancement in software. The only other mass-market business application is Microsoft’s own Office. And it hasn’t improved in any meaningful way in over a decade. In fact, it’s gotten worse. Microsoft has ripped out familiar and valuable interface elements, and (over the loud protestations of its users) replaced them with unfamiliar and much less-functional new elements. They’ve come up with an ugly new look. But they’ve failed to fix obvious problems. And more importantly, they’ve failed to fundamentally improve what Office does.

As a writer, I’m most familiar with Word, so let me use that as an example. Word 2013 is a pretty decent word processor. But the value of that base functionality has declined. (To near zero: LibreOffice Writer is for all practical purposes just as good as Word 2013, and it’s free.) Over the past decade, I fully expected Word to evolve from being just a word processor to being a paragraph processor, or a document processor. But Word 2013 does almost nothing to help me with my job that WordStar didn’t do just as well back in the 1980s. Word doesn’t help me gather my notes, structure my article, track references, or keep side-notes. It makes it painfully awkward to add tables, or images, or hyperlinks, or bookmarks. It uses only about a tenth of a percent of my Core i7 processor, and lazes around the rest of the time… while I do all the work.

Outlook is an equally obvious failure. My database of emails is probably the most valuable chunk of data on my PC. Yet Outlook does absolutely nothing to help me access that data (other than allowing a tediously limited brute-force search). It won’t let me structure the data, or strip-mine it for the gold I know it contains. It can’t automatically track contacts, and it doesn’t even include a proper spam filter! It does use a bit more processing power than Word, but that’s just sheer wastefulness. (Thunderbird feels fast and loose and lightweight, while doing almost exactly the same job. It lacks one or two features of Outlook, or I’d switch in a heartbeat.)

I don’t know about anyone else, but personally I have no trouble at all imagining a better word processor than Word. Or better communications software than Outlook. I’m not a programmer, so I can’t implement my ideas. But Microsoft has some great programmers; it could implement just about anything. Clearly, what it lacks is visionaries. Or maybe a corporate structure that would let those visionaries flex their muscles.

And by the way, change for the sake of change — or in support of some self-serving corporate agenda — is no substitute for worthwhile innovation. Great software is not built by marketing executives. It evolves from a seed of brilliance, tended by a lot of skilled programmers, and nourished by willing input from the user base. Microsoft definitely still has the technical prowess, but no vision. There are endless ways the PC can evolve (while still remaining a PC, rather than morphing into some kind of mutant tablet hybrid). As for listening to users… Microsoft seems almost proud of its ability to ignore them. (A huge volume of comments criticizing the Ribbon was curtly rebuffed in Microsoft forums. Passionate demands for the return of the Start Menu have apparently gone unheeded in Windows 8.1.)

Great software? Yes, it does exist, in the one market where innovation and change still dominate: games. A market that Microsoft has done everything it can to stifle.

It’s true that PC gaming used to be overly complex and fraught with technical problems. But Microsoft solved those problems brilliantly, with DirectX — one of the most amazing achievements in its history. Microsoft created a standardized software layer that allowed demanding graphical games to run — efficiently, reliably and compatibly — within a general-purpose operating system, on a dizzying variety of hardware configurations. DirectX worked. And PC gaming flourished.

And then Microsoft decided that the future lay with the closed, proprietary consoles, and shifted all its efforts to nurturing the Xbox. In its frantic effort to make the Xbox fly, Microsoft practically went to war with the PC gaming market. At its huge E3 presentations, Microsoft pretended that PC games didn’t exist. It abandoned its Games for Windows branding campaign. It shut down its own internal game studios, which at their peak had been releasing a dozen classic Windows titles a year. It closed down the longest-running entertainment software franchise of all time, Microsoft Flight Simulator, and fired its entire ACES Studio development staff.

And yet, amazingly, PC gaming continued to flourish. Today, Valve’s Steam service has 50 million users — not too far short of the installed base of the Xbox 360. Then there are the 10 million or so subscribers to World of Warcraft, the 10 million or so people who bought Minecraft, the 1 million casual gamers who recently bought into SimCity… and many other segments. There’s some overlap in those numbers, of course. Nonetheless, it’s obvious that PC gaming is thriving, even with no company acting as overall marketing champion.

Why? Because games are the perfect example of how PC hardware power can and should be exploited. Each new generation of games looks better and plays better. Often dramatically better. The user interface gets smarter, slicker, less obtrusive. The artificial intelligence gets not just tougher to beat, but more lifelike, sophisticated — more  satisfying to beat. The virtual environments get bigger, more detailed, more complex. And the new ideas just keep on coming. Software like Minecraft  is far more than just a great new game… it’s a whole new paradigm for how PCs can be used.

In order to innovate, games constantly exploit the leading edge of hardware capability. Today all PCs (and most mobile devices) have powerful 3D processors. But it was games like Quake that drove that wave of innovation — and gamers who bought Rendition and 3Dfx cards who originally made it a commercial bonanza. Online games like EverQuest and World of Warcraft worked “in the cloud” before ‘the Cloud’ was a concept. Gamers buy faster Internet modems, fancier mice, bigger monitors and a myriad of bizarre control devices. They upgrade the old ones before they’re worn out, and they adopt new ones (like the Oculus Rift) eagerly, without any artificial coercion. (Such as the premature elimination of backward hardware or software support.)

It’s a fine balance: push too hard, and even gamers will balk. But keep up a steady forward pressure, and you get millions of gamers happily spending thousands of dollars per year to upgrade their PC equipment. Thereby demonstrating exactly the mechanic I wanted to point out:

People will buy new PC hardware…  provided the software gives them a significant pay-off for doing so.

Game developers have continued to provide that pay-off. Microsoft has not. Microsoft not only abandoned gaming, the most obviously innovative segment of the PC market — it failed to evolve its staple cash-cow products, Office and Windows, at a pace that would make individuals or businesses consider buying new PCs. This isn’t conjecture; the IDC numbers prove it. Sales are down, even though hardware capability and value continue to escalate according to Moore’s Law — doubling every 18 months or so. That leaves only one possible explanation.

It’s the software. And if it’s the software, it’s Microsoft.

The problem isn’t that consumers actively dislike Windows 8. It’s much worse: they’re disinterested. Windows 8 and Office 2013 are easily a decade behind where they should be, in terms of power, ease of use, price, and the ability to generally anticipate the user’s every whim.

People will buy a better PC… as soon as somebody builds the software to make it better. If Microsoft can’t do it, or won’t do it, someone else will eventually step up. Moore’s Law virtually guarantees it. Unexploited hardware power is a goldmine, just waiting to be exploited by the right software.

About fung0

Long-time tech journalist. Contributor to numerous periodicals, online sites and TV productions in the US and Canada. Author of several books on computing topics. Graduate mechanical engineer (Queen's U).

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