An interesting facet of Windows 11 that we haven’t touched on yet at wfoojjaec is that from the consumer perspective, this isn’t the best time for Microsoft to launch a new OS. The relationship between Microsoft OS launches and upswings in consumer hardware adoption appears to be small, especially in the past decade. But we’re currently in the middle of an unprecedented silicon shortage. Any additional demand sparked by Windows 11 will stress the market more than an equivalent uptick during more normal times.
From Microsoft’s perspective, this may not be a problem at all. It may actually be the reason the company is launching the OS when it is in the first place.
The Windows Migration Problem
Microsoft has struggled to move users off of older versions of Windows for at least the past 15 years. In the beginning, the rapid pace of improvement in hardware and software made buying new versions of previous products a pretty easy sell. Whether you liked Windows or hated it, there was no arguing that Windows 95 was radically different than Windows 3.1. When people upgraded to XP off Win 9x, they often did so to improve basic functionality and system stability.
Today, people keep computers for far longer than they once did and are therefore less likely to acquire a new OS upon system purchase. Microsoft’s first solution to this, deployed with Windows 10, was to make upgrading the new OS free and easy for pretty much anyone, even users with old machines, and to relentlessly nag, gaslight, and needle anyone who didn’t jump on board. Objectively, the strategy worked pretty well, even if we detested the nagware side of it. Six years after launch, the vast majority of the Windows world is running on Windows 10.
But the past six years have also seen a considerable evolution in security threats. Ransomware is now a major problem across many different industries. We’ve seen the rise of more sophisticated malware campaigns and better infiltration software. Windows 11’s security requirements go beyond TPM 2.0 — Microsoft is still deciding exactly what they are — but the company is very serious about requiring stronger security standards at the hardware level.
Of Processors and Pandemics
In the past, Microsoft could depend on the x86 manufacturers to introduce faster CPUs on a regular cadence. It’s difficult to explain (or remember) just how fast this cadence actually was. In late 1995 and early 1996, the fastest CPU you could buy was either a Pentium or Pentium Pro 166. Six years later, Intel was knocking on the door of 2GHz with the Northwood P4. While it’s true that even the Northwood P4 was less efficient than the P3, it would still have been more efficient than the original Pentium. Knock 400MHz off the comparison to be rude, and that’s still an 8.43x clock improvement in a bit over six years, not counting innovations like a full-speed on-die cache or the then-ongoing adoption of performance-boosting SIMD instructions via SSE2.
Improvements come much more slowly now, and PCs now live much longer. The wear-and-tear laptops inevitably suffer ensures they’ll always be replaced more frequently than desktops, but PC desktop replacement cycles have moved from 2-3 years to five years or more. I once heard a company rep confidently refer to “the four-year PC replacement cycle.” Twelve months later, when being briefed by the same company on its new products, the representative mentioned “the five-year PC replacement cycle.”
The story of the PC market from 2010-2020 is almost entirely a negative one, as far as hardware sales are concerned. Ultrabooks may have helped raise PC average selling prices, and they definitely offer a more up-market PC experience than was generally available 10 years ago, but PC sales declined year on year for most of a decade, from a high of 365 million units in 2011 to just 263 million units in 2019. In 2020, thanks to the pandemic, PC sales grew to 275 million units without Chromebooks, or approximately 302 million units if Chromebooks are included. But either way, sales of Windows PCs grew for the first time in years.
Right now, the PC market is expected to remain strong through at least the end of the year and possibly into 2022. Any Windows upgrade cycle that Microsoft launches now risks exacerbating demand issues. But the fact that people are upgrading now also represents an opportunity. The computers people are upgrading to, generally speaking, support more advanced security standards than machines bought from 2010-2016.
If Microsoft wants to push the market forward and adopt new security standards, kicking a new version of Windows out the door is probably the best way to do that. In doing so, Microsoft is returning to an older tactic. It could have done what Apple does and increment OS versions without shipping an entirely new product, but the Windows developer has historically used new versions to mark major changes in hardware support.
Launching Windows 11 in 2021 allows Microsoft to take advantage of the fact that PC buyers are upgrading from old machines at a higher rate. It gives the company the best chance of baking in certain security features as an expected baseline on the widest range of PCs. In its messaging, Microsoft has emphasized that Windows 10 will be supported through 2025, and we suspect that’s partly to take the sting out of this shift.
Our guess is that Microsoft hopes to use the unexpected surge in PC demand to drive a quicker shift towards better security standards than it could otherwise have achieved, and is launching Windows 11 relatively soon for that reason. This also dovetails with Microsoft’s emphasis on improving security in hardware, through avenues like its Pluton security processor.
For consumers, Windows 11 doesn’t seem to pack much in the “killer feature” department, though the new icons are nice and the improvement to hybrid computing could also be useful. From Microsoft’s perspective, however, there may not be a better time. The PC market is currently enjoying its first bona fide demand boom in a decade, and it took a global pandemic to deliver it. It’s a bad idea to bet on that kind of lightning striking twice.
The answer to the question we raise in the title, we suspect, is: “Because it doesn’t think it has much choice.” If you want to drive new security standards into the market, taking advantage of a major PC buying boom is the best way to do that.
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