Feb 232014
 

As Microsoft prepare for a major launch at this week’s Mobile World Congress, the news isn’t good for the company’s flagship Windows operating system.

Two Bloomberg reports illustrate the problems; the major story is the company is planning to drop licensing fees for Windows 8.1 while the other, still serious, news is that Ford will be dropping Windows as its in-car operating systems.

Automotive systems are one of the key markets for Microsoft as the company tries to move into markets beyond the stagnating personal computer sector and should the reports be true that Ford is looking at moving to the rival Blackberry owned QNX system then Windows Embedded has taken an embarrassing blow in a key market.

More serious though is Bloomberg’s report that Microsoft plans to cut its licensing fees for Windows installed on cheaper devices.

While not unexpected, this will damage the company’s earnings given the Windows division made up 22% of Microsoft’s earnings last year.

It’s clear that the free Android system is beginning to hurt Microsoft both in the smartphone and personal computer markets.

For Microsoft’s new CEO Satya Nadella, dealing with Windows’ place in the new Microsoft is going to be one of his most pressing challenges and will almost certainly define his first year in the role.

As the Internet of Things and Machine to Machine markets grow, Microsoft is going to have quickly decide if the company wants to compete in the market.

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