MS Windows Boom Is Over, says Analyst

A venture capitalist claims that the Windows operating system is on the decline. However, that doesn't mean it's doom and gloom time for Microsoft; instead, Roger McNamee says the software giant will still thrive thanks to its business services.

McNamee is co-founder of Elevation Partners, a firm that has invested in corporations including Forbes, Palm and Facebook. It's also a major donor to Wikipedia.

Speaking in an interview on CNBC, McNamee says Windows has reached a cycle in which it would stop growing. As a result, he predicts Apple will expand significantly, which will actually wind up hurting Google -- the logic being the more established Apple becomes, the more people are drawn to its closed proprietary systems rather than the more open systems of Google. (Source: sfgate.com)

Most Internet Devices No Longer Operate Windows

The main argument McNamee puts for Windows' decline is that of the number of machines that are connected to the Internet, less than half now run Windows. At one time, 97 per cent of all web-connected computers ran Windows.

Of course, that's largely due to the addition of millions of portable devices, such as smartphones and tablet computers, two markets in which Microsoft is a minor player at best. In terms of full-fledged computers, Windows is still dominant.

PC Sales Slump, But Overall Market is Enormous

Where McNamee's logic is open to question is that it's by no means certain that people are buying such devices instead of PCs.

For example, figures this week showed a decline in PC sales of between one and three per cent year on year. That's led to speculation that a corresponding rise in sales of devices such as the iPad may be the cause. (Source: idc.com)

Even if that's the case, such a trend is still very small in proportional terms: at least 80 million PCs were sold worldwide between January and March this year, whereas sales of tablet devices for the same period will likely be less than five million.

Whether or not McNamee's Windows argument proves correct, he's still not writing off Microsoft. He believes the company's Exchange product is so dominant in the corporate email market that it will be able to get away with steep price rises to boost profits.