11/28/2012 08:31 pm ET Updated Jan 28, 2013

Microsoft's Future Looks Grim

Based on what I've seen lately, things don't look promising for Microsoft. This is not wishful thinking. I've been a fan of its products for decades and am writing this column in Microsoft Word on my Windows 7 PC, which I like.

The company should be in a celebratory mood. It just launched its new PC and mobile operating systems and for the first time started selling its own computer hardware -- the Surface Windows RT tablet. Its hardware partners are coming out with all sorts of new PCs featuring Microsoft Windows 8 and Microsoft finally has a tablet device to compete with Apple's iPad and the myriad of Android tablets.

But things aren't going well for the software behemoth that was once so dominant that a court declared it to be a monopoly.

Last week, CNET News reported that "Windows 8 got pummeled" by analysts, including Chris Whitmore from Deutsche Bank, who wrote that Windows 8 "will have a more muted impact than prior cycles for a several reasons." In addition to economic factors beyond Microsoft's control, he cited mixed reviews, a lack of enterprise interest in the new operating system and confusion around the two flavors of Windows 8 -- Windows RT for tablets and Windows Pro for PCs and some tablets.

While some reviewers praised Microsoft's new operating system, my colleague, San Jose Mercury News columnist Troy Wolverton, was far from alone when he declared the new Windows 8 interface, "clunky and unintuitive." I'm certainly not enamored with it. Instead of the traditional Windows desktop, Windows 8 presents the user with tiles to represent each program. That's fine -- especially with a touch screen device -- but as easy as it may be to click on a tile to launch a program, it's sometimes confusing how one gets back to the main menu of tiles once you're ready to launch another program. The Windows desktop is still available, but you have to click a tile to get to it. And there is no Start menu, which drove me nuts until I downloaded a third party app that brought it back.

I usually upgrade my desktop PC with the latest Windows operating system but I have no intention installing Windows 8. Windows 7, which was released in October 2009, is stable, fast and easy to use. And unlike Windows 8, there was practically no learning curve when I installed it over Windows Vista.

Windows 8 does have potential for tablets, but Microsoft is late to the party and will have a tough time competing with Apple's iOS and Android. Even if I were convinced that its tablet-only Windows 8 RT version were a superior tablet operating system, I'd be hard pressed to recommend it, given the paucity of apps compared to Android and iOS. In an interview with French daily Le Parisien, Microsoft CEO Steve Ballmer admitted that sales of the Windows RT Surface, "are starting modestly."

More powerful tablets running Windows 8 Pro have more potential because they can run standard Windows programs. But Microsoft's tablet entry, the as-yet unavailable Surface with Windows 8 Pro, will be 39 percent heavier and 43 percent thicker than Apple's full-size 4th generation iPad. Still, it will be light and thin by laptop standards, even with its optional keyboard cover. I'm really hoping I'll like it because I'd love to be able to carry around such a light full- featured PC, and I can see the advantage of being able to use it as a tablet. But it's too earlier to speculate whether it will have any impact.

Of course you don't have to buy a new PC to get Windows 8. You could spend $39.99 to download a copy from to install on your existing machine. But I wouldn't recommend it. First, unless you have a touch-screen PC, you might be disappointed and second, there is always the chance that things won't work quite right, as I found out when I tried installing it on a Lenovo U300 laptop. The upgrade seemed to go well until I tried using the machine and discovered the track pad no longer worked. I couldn't even access the "windows. old" file to restore Windows 7.

Windows 8 phones are getting excellent reviews, but when it comes to sustaining a platform, quantity is at least as important as quality -- and phones running Windows aren't setting any sales records. The latest figures from Gartner puts Microsoft near the bottom when it comes to installed base.

The good news is that more than four million Windows phones were sold in the 3rd quarter of 2012, which represents a 139 percent increase over the same quarter a year ago. But in terms of market share, it's in sixth place at 2.4 percent, behind Android (72.4 percent), Apple iOS (13.9 percent), Research in Motion (5.3 percent), Bada (3 percent) and Symbian (2.6 percent).

Admittedly, any predictions of Microsoft's demise would be extremely premature. Its operating system continues to dominate the PC market and its Office suite continues to be a cash cow. Yet, if things don't turn around for Microsoft, its time as a major player could be limited. I'd hate to see that happen.

This article first appeared in the San Jose Mercury News.