Will the Next Windows Be Good Enough to Save Microsoft?

NEW YORK (TheStreet) -- On Tuesday, Microsoft (MSFT) will reveal its master plan for bringing the Windows franchise back to prominence. In the process, Microsoft's ninth version of its personal computer operating system needs to be good enough to erase the memory of Windows 8, different enough to help boost PC sales and perhaps include a return to the past: a fully-functioning Start button.

Rumors suggest that Microsoft, which is holding the event in San Francisco, will name the next OS Windows 9, Threshold (the internal development name) or Windows TH. Yet, the one thing everyone is pretty sure of is the famous Windows home screen will be the prominent interface once again with the boxy Metro taking a supporting role.

One German Website believes the new Windows might look like this:

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CLSA analyst Ed Maguire says the next version of Windows will be "an effort to combine disparate software designs to combine hardware like PCs, tablets and smartphones with software features such as Cortana and the Metro UI into one computing platform for all devices." In a phone conversation, Maguire said, "Microsoft had tried to straddle two platforms and it didn't work. Windows 8 wasn't bad - like Vista was - but it required a large learning curve."

The next version of Windows is rumored to integrate Metro-style app links into the standard home screen, as well as into the Start menu and for the separate Metro screen to disappear completely.

In addition, Microsoft is also thought to be adding the very Linux-like ability of "virtual desktops" - to switch between more than home screen running at the same time. It's also expected that sort of Notifications panel will be added to the Technical Preview/beta as well as a number of other tweaks and improvements.

Gartner analyst Michael Silver isn't sure the new software could help Microsoft, despite the rumored changes. "Windows 9 could either push Microsoft further into irrelevance or survival," Silver said in a phone interview. "Microsoft blundered with Windows 8 and any any amount of improvement will change the way people think of Windows."

In Microsoft's fiscal fourth quarter, it generated $4.69 billion in revenue from its Windows Devices and Consumer Licensing group, up from $4.38 billion in the previous quarter. When Microsoft released Windows 8 in the fiscal second quarter of 2012, revenue from its Windows Devices and Consumer Licensing group was $4.74 billion.

After three major beta versions, Windows 8 was officially released to the public in October, 2012 and received mixed reviews. There were numerous complaints that offering two separate interfaces Windows 8 (Windows 8 and Windows RT) was confusing to use. A year later, the software was upgraded to Windows 8.1 and addressed a few, but not all of Windows 8's shortcomings.

CLSA's Maguire believes the new Windows should help. "Windows 8 was as big a break from Windows 7 as 9 will be from 8," Maguire said in an interview. "Windows 9 will be an effort to combine disparate software designs to bring hardware like PCs, tablets, phones and software features such as Cortana and the Metro U.I. into one computing platform for all devices."

More than 200 million copies of Windows 8 were sold according figures released by Microsoft announced more than 6 months ago. At its peak, Windows 7 sold more than 240 million units in a single year. Many users stuck with Windows 7 which now officially faces the end of "mainstream support" as of Jan. 15, 2015. Microsoft is hoping users will choose to upgrade to Windows 9.

Windows 9 is the next step towards CEO Satya Nadella's vision of making Microsoft ubiquitous for all products, noted FBR Capital Markets analyst Dan Ives. "Windows 9 is the beginning of the next step in Microsoft's plan to incorporate all of its products into the cloud," Ives said in a phone conversation. It will connect all of Microsoft's devices - PCs, tablets, phones and the Xbox. It will be one Windows for both consumers and enterprise users.

Given how badly Windows 8 was received, the company has a lot riding on this, Ives noted. "Windows 8 missed the boat. Windows 9 could be different. There are still challenges ahead for the company but it feels like a different Microsoft. I believe there is a whole different culture under Nadella and I'm the most positive I've been about the company in more than a decade."

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-- Written by Gary Krakow in New York.

To submit a news tip, send an email to tips@thestreet.com.

Gary Krakow is TheStreet's Senior Technology Correspondent.

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