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Windows 8: Microsoft Corporation (MSFT)’s Qwikster Moment

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Microsoft Corporation (NASDAQ:MSFT) pulled a Netflix, Inc. (NASDAQ:NFLX) move last year — and not in a good way.

The Windows 8 update was a radical departure from the usual Windows fare. If you sharpened your computing skills using the nearly 20-year-old Windows 95 interface, then you could still get around Windows Vista or 7 with little trouble. But Windows 8 reset every expectation you might have brought along. The software was clearly optimized for touchscreen tablets first, then grafted onto traditional PC systems with a half-barked order to like it or else. Users largely hated the abrupt shift and complained in droves.

Microsoft Corporation (MSFT)

So far, so Qwikster-like. Netflix, Inc. (NASDAQ:NFLX) built a successful DVD-mailing video-rental service with a bit of digital streaming on the side. Customers started getting used to the complete DVD library and convenient streaming service, side by side. Life was good, and share prices climbed as high as $300.

Then, with little warning, the company split the streaming service apart from DVD mailers and asked customers to swallow it. DVDs were scheduled to spin off into a totally separate entity. The proposed name Qwikster quickly became a curse word, and users only saw decreased convenience for a higher total price — kind of like the forced march into Microsoft Corporation (NASDAQ:MSFT)’s tablet-oriented Metro experience.

And that’s where the similarities end.

Netflix, Inc. (NASDAQ:NFLX) backed out of the Qwikster dead end swiftly and gracefully. CEO Reed Hastings posted a public apology and scrapped the wholesale Qwikster separation. He still introduced separate DVD and streaming plans but kept them integrated under one service umbrella. It hasn’t been a smooth ride, but share prices have tripled from the Qwikster lows. Splitting off the DVD service might be a realistic idea nowadays. Qwikster was a timing error more than anything else.

Microsoft Corporation (NASDAQ:MSFT) could have followed a similar path: drop the most controversial features of Windows 8 or at least make them optional, rather than mandatory; bring back the good old “Start” menu for users who feel lost without it; leave the tablet-like app store in the ditch, and bring it back when customers are ready for it; and train people on tablets first and then introduce the newly familiar features of the core Windows experience.

But no, that’s not what Microsoft Corporation (NASDAQ:MSFT) is doing. Redmond is about to introduce a Windows 8.1 update, and it’s a free upgrade for existing Windows 8 users. It’s a golden opportunity to back off the largest issues with an unpopular platform. Instead, Microsoft decided to tweak a feature here and there while keeping the core experience far too intact. We’re talking about cosmetic changes that do nothing to smooth over the jarring transition from older Windows systems.

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