Microsoft will never drop the Windows brand name

This venerable brand has been through a lot and earned its place in computing history and the future.

Microsoft is not giving up the Windows brand name. Yes, there's a rumor that the venerable brand's days are numbered, or more properly, a notion—the idea that it could happen because someone, somewhere said as much to someone else. That notion is ridiculous, but not because anyone has told me so officially. Microsoft spokespeople said flat out, "No comment." But it doesn't take confirmation or any kind of genius to know that Microsoft is not giving up the brand that built its company. It's not ditching the software that made many Microsofties millionaires (or billionaires) and that has made hundreds of millions of people around the world more productive.

No one, not even those who wrote the original story are suggesting the end of Windows as a product. The platform will outlive us all, I suspect. However, what if Microsoft simply walked away from the brand and brand imagery? What's so special about Windows anyway? It could be called, for example, Zest. How hard would it be for all of us PC owners to start saying our desktops, laptops, tablets and phones are running Zest 1.0? Not hard, I guess, though most people would wonder what happened to "Windows."

This was a revelation and further defined what windows meant in the Microsoft Windows operating system. Windows turned the graphics software industry on its head by finally freeing it from having to write special drivers for whichever graphics hardware consumers were running on their IBM-compatible PCs. The OS, which required a half megabyte of storage (a lot in 1985), reportedly "strained the limits" of 1985 hardware.I'm not trying to argue that Windows has ever or will ever be perfect, in either performance or as a brand moniker. When it launched in November 1985, Windows 1.0 was little more than a shell for Microsoft's DOS. What's worse, it had a ridiculously generic name that did little more than describe the shell's signature feature: windows. These user interface windows, by the way, weren't even particularly powerful. They looked like 4-bit color graphics and could not overlap; they simply served to cut up your screen real estate. You could, however move elements from one window to another.

Two years later, in 1987, Microsoft Windows still suffered Rodney Dangerfield-levels of respect. From a Nov. 24, 1987 PC Magazine article on Apple versus IBM: "The IBM world has Microsoft Windows, which naïve users assume is similar to the Mac interface. It's not. The Windows Executive is laughable when compared with the Mac operating system and interface." It is a wonder Windows survived at all.

Yet it did. It survived and thrived.

A major turning point obviously was Windows 3.0, which arrived in 1990 (and 3.1, which arrived a year or so later). The operating system increased in power (better memory management), resolution and usability. Supporting hardware and software started to arrive in droves. It would still be years, though, before businesses would move completely away from DOS-based apps in favor of Windows, and all the way up to Windows 98, Windows was little more than a shell on top of DOS.

Over time, Microsoft Windows gained adoption and respect. Unfettered by single-sourced hardware, Microsoft made deals with virtually every major PC manufacturer and soon Windows was shipping along with virtually every new PC. In the meantime, Windows and the PC became synonymous. I could argue that this is unfortunate because "PC" equals "Personal Computer" and an Apple Macintosh is also a personal computer, but you've heard that story before.

As Windows grew in popularity and recognition, Microsoft made an important realization: Windows was the core of its OS and should not be subjected to mere version updates. It deserved richer branding.

For a time, the years in which new editions were released were the thing to highlight. We got Windows 95, Windows 98 and Windows 2000. Microsoft also made a series of disastrous attempts at shifting the focus away from the "Windows" moniker. There was the execrable BOB and the appalling Windows ME. ME stood for "Millennium Edition" and it was supposed to be the consumer version of Windows 2000. It was riddled with shortcomings that drove consumers nuts. Windows 2000 did not suffer from the same issues. There was also Windows NT, which was a more powerful version of Windows. NT stood for, wait for it, "New Technology." It did, in fact have some deep-level technology that its more consumer and straight-business counterparts lacked, like the ability to run on CPUs with processor architectures that weren't Intel's and AMD's proprietary x86 platforms.

Windows XP should be counted as Microsoft's most successful rebranding and I recall many people referring to it as simply "XP". Yet we all knew they were talking about Windows XP.

Then there was Windows Vista. This was Microsoft's last big attempt to shift the focus away from "Windows" and it was an utter failure. Consumers and businesses refused to drop XP in favor of Vista (many still run XP today, long after the flow of service packs has been shut off). This resulted in Microsoft's back-to-basics approach and the emergence of Windows 7. There have been more than seven versions of Windows, but no matter, "7" is now almost inconsequential and the focus is back, squarely, on Windows as the core, foundational brand.

Since Windows 7 launched, Microsoft has focused more and more on expanding the Windows brand with far fewer embellishments. Windows didn't arrive on phones as Windows Mobile (that was the old brand). Instead, it's the more straight-forward and obvious Windows Phone.

Throughout the years, Microsoft has used a variety of code names for upcoming Windows releases: "Chicago", "Longhorn", Cairo", but the more tablet-friendly Windows 8, arriving in (we think) 2012, doesn't even have a code name like its predecessors. Microsoft has been calling it Windows 8 almost from day one.

The reality is that the world accepts "Windows" as a viable platform brand, and Microsoft knows that it has tremendous equity. Missteps of the past are laid at the doorstep of "Vista" and "ME"—emphatically not blamed on Windows, the platform and brand. We all know, for better or worse, what Windows is. And we should no more expect Microsoft to drop the brand than we do McDonald's to rename the "Big Mac" the "Big Mouth Burger."

Copyright © 2010 Ziff Davis Publishing Holdings Inc.

How Apple prints money

Because Apple's iOS devices are handed down and the company continues to pull in revenue from the devices through content purchases, Apple is a financial juggernaut that can't be matched.

The basis for this column is the following comment and analysis from Horace Dediu who runs Asymco, a curated, market-intelligence site. This site has some of the best analytical commentary I have seen in many years. In the article "How much is an IOS user worth to Apple? About $150. Every Year," Dediu says:

I encourage you to read this piece to get the rest of his thoughts on Apple's financial impact. However, I would like to drill on one key thing he brings up: Apple's recurring revenue potential from the iOS devices it sells. Dediu postulates that the life of an iOS device is 3.5 years, and if you factor that $150 per year base line in with the amount of iOS users growing to 500 million, then this could "generate $74 billion a year in recurring revenues."During the last WWDC Apple revealed that there were 54 million active Mac users. If we look at the history of the product we can see that it took about 5.5 years to sell 54 million Macs. If we assume therefore that the average lifetime of a Mac is 5.5 years and knowing that Mac sales generated revenues of about $73.8 billion then we can estimate the average revenues/year/mac user: $250. Repeating the exercise with 180 million current iOS users who purchased about 200 million iOS devices and assuming a life span of 3.5 years gives the average revenue/year/iOS user of about $150.These are recurring figures. If we assume these users are loyal then they will likely spend this amount indefinitely and each additional user will be worth a similar amount.

Some of his readers who commented on his article took exception to an iOS device being used for 3.5 years, but a few of them pointed out that this made sense, because many iOS devices get handed-down and used by others in the family. There is a lot of truth to that last comment from his readers.

At Creative Strategies, we looked into the "hand-me-down" theory awhile back. We found that, on average, an iPod or iPhone owner "recycles" the device by giving it to a spouse, child, or friend of the family or by selling it on eBay in some cases. Unless the device is damaged and no longer works, we found that its life was almost always extended. Of course, there are some who have to get a new model every year and instigate the "hand-me-down" cycle yearly. However, we found that the average time an individual user held an iPhone or current iPod was two years and then gave it new life by handing it down to others who easily used it for another full year—if not more. And this cycle is now being repeated with the iPad. The early adopters got the new iPad 2 when it came out on the original's one year anniversary, but it appears that well over 80 percent of iPad 2 purchasers are buying them for the first time. And at some time in the near future, they too will "hand them down" to family members, friends, etc.

Copyright © 2010 Ziff Davis Publishing Holdings Inc.