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7/26/2013
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Microsoft's Dilemma: Windows 8.1 May Not Be Enough

Microsoft CEO Steve Ballmer tells employees that Windows 8 has underwhelmed. A turnaround depends on Windows 8.1 and his reorg plan.

10 Hidden Benefits of Windows 8.1
10 Hidden Benefits of Windows 8.1
(click image for larger view)
Microsoft CEO Steve Ballmer reportedly admitted at an internal town hall meeting that sales of Windows 8 and Windows RT devices, specifically the Surface RT, have disappointed.

In a sense, the candor is refreshing, given that Microsoft has repeatedly sidestepped hard questions about Windows 8's sluggish adoption. But the statements are only new in the sense that they come from Ballmer; others have been saying the same thing for months. It's noteworthy that Microsoft's CEO spoke so frankly -- but what really matters is whether his "one Microsoft" vision is the antidote to the problem.

Regarding the Surface RT, Ballmer said, "We built a few more devices than we could sell," according to The Verge, which cited "several sources" present at the meeting. The CEO reportedly confirmed that the company's recent $900 million writedown was to accommodate Surface RT price reductions, which Microsoft hopes will stimulate sales.

The website Neowin, which was the first to publish details about the meeting, reported that Ballmer said next-gen Surface models are in testing. Recent reports have suggested the next Surface RT will run on Qualcomm's Snapdragon 800 chip, which is substantially faster than the current edition's NVIDIA Tegra 3. The new processor could also enable LTE support, which today's Surface lacks.

[ Microsoft keeps trying to read XP's eulogy, but some aren't listening. See Windows XP's End Of Life: Readers Respond. ]

Ballmer also said, "We're not selling as many Windows devices as we want to," according to The Verge. The CEO reportedly stated that limited stocks of touch-enabled devices limited the Win8 launch, and that the company is working with OEMs to provide a variety of compelling hardware options for the upcoming back-to-school and holiday seasons.

Ballmer's frank tone is notable, but no one seriously doubted that Windows 8 hasn't lived up to Microsoft's hopes.

In the past, when company execs have been questioned about Win8's viability, they've typically pointed to its 100 million license sales. These figures don't necessarily represent the number of devices that have reached consumers, however, and it's become clear, following months of declining PC sales and bleak reports about Windows 8's market share, that Microsoft was spinning numbers. If Ballmer is admitting that Win8 has struggled, he's just conceding the obvious.

And his reported statements aren't that much different than comments he's made in the past. At Build, the company's conference for developers, Ballmer also blamed Windows 8's struggles on the dearth of touch-enabled inventory available at launch. His newest remarks are a bit more direct, but disappointing sales have been implicit in his statements for weeks.

Likewise, at this point, it would be difficult for Ballmer to ignore the $900 million charge. What the CEO said is less important than whether the new $349 price point is cheap enough to stimulate sales. With the Nexus 7 poised to disrupt the low-cost tablet scene, the success of Ballmer's strategy is not assured.

It's also strange that Ballmer implicated inventory shortcomings in Windows 8's trouble while also admitting that Microsoft has more unsold Surface RT stock than it wants. After all, if consumers were so hungry for Windows 8 touchscreens, why didn't a few more of them purchase a Surface RT, which was in high supply?

This odd dichotomy could merely indicate how little enthusiasm consumers have for Windows RT. But it also reiterates a point that Ballmer didn't make: Slow Windows 8 sales involve more than hardware.

The CEO reportedly touched on this topic in only a roundabout way. According to Neowin, he said that Windows 8.1 was guided by user feedback, which obliquely references divisive reactions to the OS's current UI. It's good that Microsoft is focused on producing better devices, both internally and with OEMs. If Win8 sales take off, new tablets, convertible laptops and all-in-one desktops will be part of the equation.

But again, Ballmer still didn't address the bigger question: Is Windows 8.1 good enough? There are many reasons to think that it is, including a more polished UI, the ability to boot directly to the desktop, and deeper connections to the cloud. Then again, some users probably don't feel their feedback has been heard; Windows 8.1 brings back Windows 7's Start button, for example, but not the much-requested Start menu.

In recently reorganizing the company, Steve Ballmer has painted a compelling vision, in which Microsoft's diverse assets connect to and enhance one another, all via the cloud. In the meantime, it's interesting to hear Microsoft executives reflect on the company's struggles. More important, though, is whether the company is making the right moves to stay on top.

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anon1818080664
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anon1818080664,
User Rank: Apprentice
7/27/2013 | 2:41:07 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
I'm not surprised by this I have a netbook which I have used for 5 years it finally died after the keyboard was unresponsive. It was still cheaper for me to buy a netbook from Ebay the exact same model for 150 which is about 3 times as cheaper then what these tablets are priced at.

Also I have been looking around on popular sites and I've seen android tablets going for 80 to 100 dollars while the mid-end Samsung ones go for around 200-250. These things don't have a keyboard or room so its a waste for most people with limited storage being the main tradeoff.

Still if the RTs were priced competitively instead of competing with the Ipad Microsoft would of been successful selling them.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
7/29/2013 | 4:24:32 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
I have a Nexus 10 and my daughter has an iPad 2. We've never needed an external keyboard. The touch screen and voice commands are all that's needed. Cheaper prices on the Surface might help some but the products will never be successful as they have two many other problems than just price. They will go the way of the Zune. Samsung and Asus do a much better job of producing devices consumers want to buy than Microsoft ever will.
Anonomouser
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Anonomouser,
User Rank: Apprentice
7/27/2013 | 5:00:29 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Google has already started to make fun of the "One Microsoft" strategy, saying "We won't force users to run the same operating system on all devices". With microprocessors going into all sorts of products now, I don't need Windows 8 running in my toaster and needing to phone home to Skydrive before it can toast me a piece of bread.

It's true that the OS makes the product, as the decline in PC sales due to a bad Windows OS release is demonstrating. But this one-size-fits-all idea that the Windows 8 touch OS will work on everything from smartwatches to multi-screen workstations just ain't going to work.
Michael Endler
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Michael Endler,
User Rank: Author
7/27/2013 | 5:31:32 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Yeah, I see some of those concerns. I think it's potentially problematic, for instance, that the sub-10 inch tablets are still being sold partly on the strength of Office. I'm sure some people will be pumped to have Office on such a portable device, but a small tablet like the 8-inch Acer Iconia just isn't that well-suited for extended content creation. There's undeniable value in translating aspects of the Windows experience across devices. But the devices need standalone appeal too. By forcing Windows 8, which was designed for larger screens, onto these smaller tablets, I'm not sure if Microsoft and its OEM partners are delivering that appeal, or simply filling a perceived hole in the market. If we're going to have devices of all shapes and sizes, and screens of all shapes and sizes, then there's a good argument for form factor-optimized OSes, or at least a single OS that intelligently adapts to the kind of device on which it's being used. Currently, Windows 8 meets neither of these standards, at least not satisfactorily. Win 8.1 will do some things to improve this, though, so perhaps it will be enough, especially if device prices really do come down to competitive levels. We'll see.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
7/29/2013 | 4:35:30 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Windows 8 problems isn't the size of the screen. The Nokia Windows phones are pretty good, actually they are excellent, running on a 4.5+" screen. They don't sell well because the cow has already left the barn. Not many iTunes or Google Play users are going to switch. The problem is Microsoft threw the baby out with the bath water completely abandoning billions of Windows XP/Vista/7 desktop users that don't need or even want a touch screen UI.
JBURT000
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JBURT000,
User Rank: Apprentice
7/27/2013 | 5:56:29 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Ah but Windows 8 is enough if you want to move everyone to Android!!!
dblevins201
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dblevins201,
User Rank: Apprentice
7/27/2013 | 5:58:47 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Re-org needed to include Sweat-man's, aka Ballmer, leaving !!
DorisGirlProgrammer
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DorisGirlProgrammer,
User Rank: Apprentice
7/27/2013 | 6:50:41 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Microsoft could make 5-10 small changes to Windows 8... and make it MUCH improved.

Get rid of 100% of the ads. What USER would want that built into an OS????

Auto-detect if the machine has a touch-screen or non-touch... or just let the USER decide which interface he likes/needs/wants.

Auto-detect if the user has a 3-4" phone... and 7-10" tablet... or a 22-24" screen. Adjust the interface based on that or let the USER decide.

Allow the USER to decide "start button" or "start screen".

Bring back the start *MENU*, not just the start *BUTTON*. (Or does MS even know the differences?)

Allow the USER to decide "desktop" or "tiles".

Allow the USER to size/position/close windows as he sees fit.

Wow. An OS that is what a *USER* wants. What a concept!

Even basic users (like me) can often 10-20 improvements MORE than MS can seem to come up with.
BobA427
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BobA427,
User Rank: Apprentice
7/27/2013 | 8:09:16 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
This would help a lot. It is pretty irritating now on my laptop.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
7/29/2013 | 4:41:17 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
And why do you think M$ didn't include these in Win 8.1 or even the original release of Win8.0? The answer is GREED. M$ is still insisting the Metro UI is best for all because M$ will make more money selling "stuff" via Metro than letting consumers have a choice to avoid it. I am so happy with my iPad and Android devices I see M$ going down in flames over it's stubbornness.
JasonJ043
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JasonJ043,
User Rank: Apprentice
8/3/2013 | 10:00:19 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Yeah, I know. How dare a corporation created for the express purpose of making money, try to make more money! /s
gmcpherson570
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gmcpherson570,
User Rank: Apprentice
8/17/2013 | 2:14:24 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
DDurbin1 as a great point. Yes, any company needs to make money. However, you do this by creating quality products that are needed, not manufacturing something that even during Beta the market was screaming, "please don't roll it out this way." Microsoft has made records amount of money creating good products people wanted. However, they appear to have run out of ideas, or at least good ideas. If they had just listened and left the desktop as it was on desktop devices and had the modern UI load on touch devices they would have had a hit, instead of being hit.
JohnM587
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JohnM587,
User Rank: Apprentice
7/27/2013 | 7:27:22 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Balmer's defiant arrogance will continue to dominate the direction of Microsoft regardless of what the Stock Holder's teleprompter has been programmed for him to say after the Windows 8 on everything failure aka debacle.

Worse yet is that for decades trillions of dollars and hours plus petabytes of data files have been lost by Consumers & Businesses due to Microsoft's inferior Virus trap Windows operating systems that were automatically taxed on every User's past hardware purchases. That horrific OS lock down nightmare created algorithmic User decay when the World discovered they had new choices due to Balmer sleeping at the wheel. The acrid proof is no one is buying Windows 8 anything whether it is Redmond's mobile devices, PC's or laptops.

Nothing Microsoft does next will bring back what they have permanently lost to Android and iOS Users because of what they were forced to endure from Microsoft for decades.

Microsoft has no control over our memories.

The Redmond accidental empire monopoly is now toast!

Short the stock and maybe you can get back all of the money you lost due to decades of never ending Microsoft Windows security holes and buggy code which caused your losses.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
7/29/2013 | 4:46:34 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Microsoft didn't get to where it's at because it sold crappy products. Far from it. Its only been the last six years or so, since the introduction of Vista, where Microsoft has lost it's way. Gee, about the time Ballmer took over. What a coincidence.
BobA427
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BobA427,
User Rank: Apprentice
7/27/2013 | 8:04:43 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Firing Ballmer is not enough, but will help. Microsoft needs to make up for it's mistakes:

The Problems
1. Making useful (non-crippled) development tools too expensive for young developers has driven an entire generation away from Microsoft tools, which are the best in the industry, and has pushed them towards web development on Linux. BizSpark is not the answer.
2, Because of (1) Microsoft has lost, and will never regain, the entire server market with Windows. Microsoft still fails to understand that the server market is never going to go with Windows.
3. Now the desktop market is going away too, but in the form of Android (Linux), IOS (Linux), and Mac OS (Linux), and LInux.

The Solution
1. Microsoft Linux Distribution
2. Free Microsoft development tools (Visual Studio & ,NET) for Microsoft Linux
3. SQL Server for Linux, same pricing model as MySQL.
4. Microsoft Office for Linux.
5, Portability for .NET applications to Linux.

The reason this will work is that the Linux development tools still suck, and X Windows is too hard to develop for relative to .NET. If Microsoft can lift Linux out of the stone age it will win back much of the server and portable market.
rradina
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rradina,
User Rank: Ninja
7/28/2013 | 12:32:05 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
I don't disagree with some of your causal statements. However, regarding your solutions, how does this make money for stock holders?
1=Free
2=Free
3=Free
4=$ (maybe?)
5=Free
Granted, 1 and 3 could be sold with support for a recurring revenue stream but customers wouldn't have to buy it since Microsoft would have to freely distribute Linux and hope that customers pay for support. It seems that you might be suggesting the same for #3 so I'm having trouble seeing how this would generate revenue unless Microsoft turns into a pure cloud provider and makes money off being a computing utility. That's possible but there's quite a bit of competition in that space and prices seem to be rapidly dropping. Hopefully it won't be like the long distance market which essentially put remaining vestige of Ma Bell (what was left of AT&T) out of business.
Regarding 5, I think Microsoft already lost that race to Java a long, long time ago. Java tooling seems decent. I haven't used Visual Studio since the 2008 release but at that time, it didn't have anything on Eclipse or IntelliJ.
moarsauce123
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moarsauce123,
User Rank: Ninja
7/30/2013 | 11:29:00 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Java tools are decent, but it isn't the tools, it is Java and its rather bad security reputation. Oracle needs to follow the lead and patch its runtime once a month, same as Microsoft does with .NET.
rradina
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rradina,
User Rank: Ninja
7/30/2013 | 5:35:13 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Java's security woes are overwhelmingly client-side applets running in the browser. Most of Java's appeal and value is server side.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
7/29/2013 | 4:51:15 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Microsoft actually has it's own UNIX operating system. It's call Xenix. If M$ were to provide tools for the UNIX platform it would bring back Xenix. So, don't hold your breath.
Palpatine
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Palpatine,
User Rank: Apprentice
7/30/2013 | 5:17:13 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Xenix. Good. I recall last time they patched it dinosaurs were still around. Definitely a ready to release product in 2013...
moarsauce123
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moarsauce123,
User Rank: Ninja
7/30/2013 | 11:26:53 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
As far as access to development tools goes, DreamSpark gives full access to the pro line of development tools for anyone attending a school. It even covers home schoolers. And it is free as in you don't have to pay anything to get a license and a download. All you need to do is register with Microsoft to get access for a year.
In regards to your solutions:
1 - not needed, there are plenty of decent Linux distros out, doubt that Microsoft can do a better job
2 - Adding support for Linux/Android/OSX or any other *nix / BSD based OS would be awesome, but I don't expect any of that for free. You cannot have everything for free.
3 - While MSSQL Server isn't bad there are plenty of alternatives that can do the job as well, MySQL being just one of them. There really is no need to port MSSQL to Linux
4 - OpenOffice/LibreOffice
5 - exists partially via Mono, but it would be nice to extend Mono so that one can drop .NET binaries into Linux and just click on them to start
JasonJ043
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JasonJ043,
User Rank: Apprentice
8/3/2013 | 10:04:56 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
You are completely wrong. Even the free versions of Visual Studio are light-years ahead of any other IDE. The server market has been going with Windows for anything important and still is. All the Linux boxes I hear so much about are doing are serving websites. As for the desktop market going to iOS and Android, that's probably the funniest thing I've heard all month. iOS and Android can't do anywhere near what Windows or OS X can do. Also, OS X is NOT Linux based. It is Unix based, which is what Linux is a copy of.
GBARRINGTON196
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GBARRINGTON196,
User Rank: Strategist
7/28/2013 | 2:06:51 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
I don't really care one way or the other. I am unlikely to buy a windows tablet, I just don't see how it will improve my life over that of an Android tablet. And I'm pretty sure that my Win 7 Desktop is likely my last Windows Desktop. Let me make this clear, I will buy another desktop machine eventually, but it is unlikely to have Win 8 or above on it (or at least, not for long) I just don't believe Microsoft understands the world they helped create.

I'm pretty sure Unbutu, is the next desktop OS for me. I've got it loaded on a spare PC, and I'm impressed. When the major photographic software publishers start to support it, or the current LInux Open source Photo software projects start to improve their product (inevitable - Lightzone is just the beginning), I'm out of Windows permanently.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
7/29/2013 | 4:56:26 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
So you are a happy Android tablet user but will use Ubuntu on your next desktop? Why? How about an Android desktop? Go figure.
GBARRINGTON196
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GBARRINGTON196,
User Rank: Strategist
8/16/2013 | 11:13:44 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Name an Android Desktop device. . .
Palpatine
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Palpatine,
User Rank: Apprentice
7/29/2013 | 6:28:22 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
MS already failed. They stubbornly flooded the market with 100M Vistabob 8 licenses and you can bet NO ONE of the oem will help them out of that disaster, MS will have to pay more to retire those unsold licenses from the market, oem are now first competitors of "device company" Ballmersoft and they will logically leverage this debacle to rip off any cent out of MS dead and cold flesh.
Yaldez4FSI
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Yaldez4FSI,
User Rank: Apprentice
7/29/2013 | 5:21:35 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Operating systems should be designed by MSFT to operate the platform one has chosen efficiently in a user friendly manner. IF using a desktop or full function laptop, one does not want to touch the screen. If using a tablet one wants touch to be the main way to interaction. Make it intuitive. We should not have to re-learn everything. Give us what we want and how we want it, with good quality at the right price point, and we might buy it.
JasonJ043
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JasonJ043,
User Rank: Apprentice
8/3/2013 | 10:09:39 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
It amazes me how stupid tech people are. Desktops are slowly going the way of the dinosaur. Laptops have outsold them by huge margins for years. And before you claim how bad touch is on a laptop, I suggest you actually try a touch laptop for more than a few days. Touch makes using a laptop much better. It compliments the mouse and keyboard nicely.
gmcpherson570
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gmcpherson570,
User Rank: Apprentice
8/17/2013 | 2:25:33 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
As a "tech people" let me explain a couple of things, since we built this industry. We understand the hardware, and economics. We know it's much better, for creativity, to get a desktop with the newest I7 Haswell chipset fully unlocked with 16+ Gigs of Ram and a few terabytes of hard drive space, after our SDD, for a few hundred dollars more than some touch screen underpowered overpriced "consumer device." Our rigs will last us at least 5 years, if not longer. If you are a gamer you end up upgrading your vid card every six months or so, but that's another group.
As a tech guy I can tell you I have 3 tablets in my house, 3 desktops, and 1 laptop. They call get used by various folks in my family for various reasons.(This does not include my office equipment I use for my real job here at home.) I will never give up my keyboard, mouse, and desktop and plop my Android hybrid in its place. If you think that you can, you're doing it wrong.
Tronist
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Tronist,
User Rank: Apprentice
7/29/2013 | 5:30:56 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
Several months ago, I was looking for a couple of Dell laptops for my wife and myself. The home versions were only available with Windows 8, but fortunately, the business versions were still available with Windows 7, so that's what we bought. Now, I see that the home versions are also available with Windows 7. Why is that?
RobMark
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RobMark,
User Rank: Apprentice
7/29/2013 | 5:54:47 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
The start menu is really coming back. It is just called the All Apps and takes up the whole screen so you can see more applications listed without having to scroll.
Maybe they should have renamed it "Start Menu" so that everyone would figure it out.
gmcpherson570
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gmcpherson570,
User Rank: Apprentice
8/17/2013 | 2:29:23 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
You are correct, but here is the problem. Microsoft isn't rolling out the final version until October, although they've been good about letting everyone have the preview. There is universal hate for hate for Windows 8 because the only thing Microsoft says after Windows 8 is touch, like some computer pedophile. IF, notice the big if, Microsoft would get a real marketing strategy and focus on the non-touch aspects of Windows 8.1 and start getting the word out now they might have a shot of salvaging Windows 8.1. However, as long as they remain with touch fetish they will continue losing the hearts and minds of their user base.
Lord_Beavis
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Lord_Beavis,
User Rank: Apprentice
7/29/2013 | 7:42:12 PM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
I've said it before, and I'll say it again; Thank God for Linux.
moarsauce123
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moarsauce123,
User Rank: Ninja
7/30/2013 | 11:17:27 AM
re: Microsoft's Dilemma: Windows 8.1 May Not Be Enough
The start button without the start menu is pointless. This lack of thought is the main problem with Win8 in general. Even 8.1 comes along as a hodgepodge of dysfunctional ideas that came from a group of drunken monkeys. Comparing to Win7 the UI was the least that needed changing. We still use an almost 30 year old file system and all its limitations inherited from the DOS days. There are much better file systems already out there, no need to invent a new one. And that's just one example. Win 8.x remains a flop.
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