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Windows 8 preview for consumers to be unveiled

This week, after months of hints, speculation and informational nuggets, the public will finally get to see — and download — the latest test version of Windows 8, the radical overhaul of Microsoft’s flagship operating system.

On Wednesday, at an event coinciding with the Mobile World Congress in Barcelona, Spain, Microsoft plans to unveil what it calls the “consumer preview” version of Windows 8.

The name is significant. For one, it differentiates this version from an earlier test version — dubbed the “developer preview,” which debuted at Microsoft’s Build conference in September.

More important, it highlights the group Microsoft is targeting with Windows 8: consumers.

But will that focus come at the expense of Microsoft’s traditional stronghold — businesses?

There’s no doubt that Microsoft needs to make a major push to get into consumers’ head space. With the notable exceptions of its Xbox gaming console and Kinect motion sensor, Microsoft has not done so well among consumers. Windows Phone is scrabbling for traction, the Zune music player was killed last year, and the company is way behind on tablets.

Windows 8 — designed from the bottom up to work on both touch-sensitive tablets and mouse-and-keyboard desktops and laptops and featuring a new, boldly designed, tile-based user interface — aims to capture more of the consumer market, especially the tablet market.

But what about Microsoft’s bread and butter — the businesses that have bought so many Microsoft products and services, helping the company reach record revenue even in a down economy?

Will they upgrade to Windows 8? What’s in it for them to do so? And if they don’t, does that spell major trouble for Microsoft?

Research firm IDC issued a gloomy forecast late last year for PC upgrades to Windows 8. Indeed, IDC predicted “Windows 8 will be largely irrelevant to the users of traditional PCs, and we expect effectively no upgrade activity from Windows 7 to Windows 8 in that form factor.”

Other analysts’ predictions weren’t quite so dire.

But their consensus was that businesses would probably take a wait-and-see approach with Windows 8 or, even if many end up not upgrading, it shouldn’t hurt Microsoft too much.

Michael Silver, an analyst with research firm Gartner, says he doesn’t think businesses are going to upgrade to Windows 8 in large numbers.

“The main issue is migration fatigue,” he said. Businesses have “just spent a couple of years trying to deploy Windows 7.”

If organizations decide to try Windows 8, they’ll likely do so on tablets, Silver surmises. “We don’t see them pulling in Windows 8 to every desktop and notebook.”

That’s not likely to hurt Microsoft too much because selling Windows upgrades to businesses that already pay for licenses makes up only a relatively small percentage of Windows revenue.

“Microsoft’s best bet is to hope that organizations start to bring in new machines with Windows 8 in 2014″ because Microsoft gets far more revenue from manufacturers who make PCs that come preloaded with Windows, Silver said.

Indeed, Microsoft has focused its messaging of late on getting enterprises to upgrade to Windows 7 — something only a third of them have done, Bill Koefoed, Microsoft general manager of investor relations, said at a conference earlier this month. Many businesses are still clinging to Windows XP.

“For the enterprise, the path to Windows 8 is through Windows 7,” he said.

Wes Miller, an analyst with research firm Directions on Microsoft, says it’s hard to read whether the issue of enterprises not upgrading to Windows 8 is worrying Microsoft.

But “I would have to guess that either they’re not worried about it or that they’re more worried about consumerization taking that market away eventually anyway,” he said. “Consumerization” refers to the increasingly prevalent phenomenon of employees wanting to use their own personal electronic devices — their smartphones or tablets, for instance — for work.

Michael Gartenberg, another Gartner analyst, says a lot will depend on what we actually see in the consumer preview.

“Microsoft keeps dribbling out information in dribs and drabs,” he said. “It’s not quite clear what we’re going to see.”

That said, Windows 8 is as major a shift as when the company went from DOS to Windows, he said.

Such a major shift raises big questions about application compatibility, training and other issues for IT departments. Indeed, enterprises may have already paid for upgrades to Windows 8 as part of their service agreement.

“The issue is whether Microsoft will get them to adopt it,” Gartenberg said. “When you look at things like Windows Vista and even Windows 7: What’s the reward for upgrading — even if we own the licenses — when the hassles of upgrading may not be worth it.

“With Windows 8, the argument is that the things it’s bringing are significant enough to warrant the change. The flip side is: There are so many changes that organizations may decide to sit it out for a while.”

The real concern to enterprises, Gartenberg said, should be that Microsoft is specifically targeting the consumer with Windows 8.

“Microsoft is going directly to the end users, using consumers to drive demand,” he said. “You may have enterprises planning Windows 8 migration only to discover that consumers have taken things into their own hands.”

Janet I. Tu: 206-464-2272 or On Twitter @janettu.

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