Channelnomics

HP Makes Windows 7 the 'Classic Coke' of OSes

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New CokeHewlett-Packard Co. is doing something Coca-Cola tried back in the 1980s: Revive flagging product sales by introducing a classic flavor. In this case, the secret ingredient is Windows 7, and the marketing disaster that precipitated the campaign is the much-maligned Windows 8.

HP, which saw PC sales fall by more than 12 percent in 2013, has started promoting Windows 7 desktop and notebooks to consumers to stimulate sales by offering a more familiar, desirable operating system.

The marketing campaign is being seen as evidence that Windows 8 is among the worst product launches in Microsoft’s history and a major contributor to the 10 percent decline in PC sales last year.

Windows 8 was introduced in October 2012 as the first Microsoft operating system that spanned the desktop and tablet worlds. It was designed to compete against rival Apple Inc. and Google Inc. products. Unfortunately, users have found the OS and its tiles interface to be unwieldy. Businesses in particular have bemoaned the loss of the desktop and Start button.

The market share numbers speak to the Windows 8 problem Microsoft and its PC partners face. Windows 7 is arguably the bestselling operating system, as it’s loaded on 47.5 percent of the install base. Windows XP, introduced in 2001 and coming to its end of life in April, continues to hold nearly 29 percent of the install base. Whereas Windows 8 and Windows 8.1 (the updated version) hold a scant 10.5 percent.

Internally, Microsoft employees reportedly refer to Windows 8 as “the New Vista,” which was predecessor to Windows 7 and widely criticized for its flaws and poor sales — reminiscent of what happened with Coca-Cola back in the 1980s.

In the early 1980s, Coca-Cola was under increasing pressure by Pepsi. Market share of the flagship cola was down to 23 percent and Pepsi was outselling Coke in supermarkets. The presumption: Cola drinkers wanted something sweeter. So Coca-Cola decided to change its formula to make it more like Pepsi. The result was New Coke, launched in 1985.

New Coke was an unmitigated disaster from the start. Loyal Coke drinkers revolted. Sales plummeted. Coca-Cola raced to return its old product to the shelves under the brand “Classic Coke.” Guess what happened? Classic Coke sales skyrocketed. So successful was the relaunch of Classic Coke that many speculated the entire New Coke launch was just a ploy to simulate sales.

Coca-Cola continued to market both versions of its soda for eight years. New Coke sales never amounted to much, and by 1992, it was virtually gone from the shelves. (Around the same time, Coke and Pepsi introduced “clear” versions of their flagship products, which another disaster for another time.)

The same effect could happen with the HP campaign. Users — particularly businesses — want Windows 7 more than Windows 8. While Windows 8 is a touch-enabled operating system, many PC owners see Windows 7 as having greater utility and a complement to their mobile platforms — most often Apple iOS and Google Android.

PC vendors and VARs continue to sell PCs with Windows 7 loaded or with downgrade licenses. Many resellers tell Channelnomics their PC customers simply reject Windows 8 products and discount the ability to upgrade to Windows 8. In 2013, PC sales through the channel increased 14.5 percent, almost all with Windows 7-based products.

Speculation is Microsoft will pull its own “Classic Coke” trick in 2015 when it introduces Windows 9, which many expect will have many of the features business and consumer users appreciated in Windows 7. If HP’s campaign is successful, it will arm Microsoft with more justification for looking back in time for improving the future.

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3 Responses to “HP Makes Windows 7 the ‘Classic Coke’ of OSes”

  • Miguel:

    @Roger Smith
    Hi Roger, good points, but for the last one “MS has sold millions of copies”, I would argue that (being in a computer company) Microsoft has a lot of sway in what the major PC makers put on their machines as default shipping OS/GUI’s.
    This accounts for the vast majority of Win8 sales that every PC maker has to pay MS for each copy of Win8 installed in the factory. The off the shelf sales of the boxed or online OS is likely much smaller in comparison to previous MS OS sales.

  • Miguel:

    About time MS stopped trying to put lipstick on that PIG of an OS Windows8.

    I have it on an all in one desktop, and while we have gotten used to the poor design, it is not a good experience (defenders spare us the comments, I work in the industry with 20+ yrs of exp). When folks who are cost conscious or PC devotees decide to try an Apple laptop for the first time, thinking MS is going down this path forever with Win8, that should tell you something.

    Whoever pushed this idea internally at MS needs to be educated – the mobile and PC OS/GUI function is different for a reason, and forcing them together does not make the groups that use them magically change years of habit or structure. If MS wants to converge these systems, they have to do it over a very long time, not in one fell swoop. Lesson learned MS.

  • Roger Smith:

    In all of the hullabaloo over New vs.Classic, most people missed what Coke was really trying to do, switch from using sucrose to high-fructose corn syrup. At that time, sucrose was more expensive and Coke couldn’t get exactly the same taste and “mouth feel” with the corn syrup. But by flushing out the pipeline with New Coke, then when Classic Coke was introduced the original product wasn’t around to compare.

    Windows 8 is New Coke and is disliked by many end users. But Microsoft has sold millions of copies.

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