Windows has an operating system market share of somewhere between 76.17% to 92.53%. During the key note presentation of Microsoft's (NASDAQ:MSFT) new Surface tablet, Steve Ballmer noted that Windows powers 1 billion PCs.
However, the most valuable constituency of Windows is its software engineers. Status-quo bias may help to maintain their loyal customers, but the army of engineers waiting to develop on Windows 8 represents the greatest strength of the new platform.
The size of the engineering base can superficially be gleaned by the popularity of programming languages. Of the six most popular programming languages, one is an Apple (NASDAQ:AAPL) language (Objective-C) and one is a 'universal' language (Java). The remaining four are mostly used with Windows. (Also of note, Apple's Objective-C language barely registered on the scale in the past, it has only grown in influence since the iPhone.)
In the early 90's Sun Microsystems developed the programming language Java whose basic thesis was "write once, run everywhere." Today most software developed for Windows, it is not compatible with its other devices or those of Apple. The idea of Java was to create a programming language which could be written on any platform and run successfully on any other platform. Java, however, has always failed to live up to its full expectations.
Microsoft, with Windows 8, may have accomplished part of this goal. Software written for Windows 8 PCs can be run on their tablet and on their Phone--that is, Metro applications are designed to operate across the whole Windows 8 family. This revolutionary power will allow software engineers to design with all three platforms in mind--within the same project. This is not a small detail--it is the defining feature of the future success of Microsoft across all three platforms. The value it creates for users and developers is immeasurable by traditional accounting standards.
Please note, this is their goal and I do not know whether they have successfully achieved it across all three platforms yet.
One idea which is constantly repeated in headlines is that Microsoft is late to the party. Why, exactly, does that matter? I'll be criticized for this comparison, but Honda was late to the automobile party by 30 or 40 years. Further, because of the convergence of their development platform, any "App" head start by Google (NASDAQ:GOOG) or Apple will melt away since people can develop for all three Microsoft platforms at once.
Of all the new Microsoft products, I am personally most skeptical about the phone. But the ability to design software for the tablet will help create an application ecosystem for the phone too. Also, if Microsoft is able to leverage its power in the PC market by integrating PCs with their tablets and their phones--their phone stands to gain. Further, the success of one device will help the other devices along.
The three platforms are a form of diversification; but the platforms are now highly correlated. If Windows 8 is a success on one platform, it will pull some success along in the other platforms.
As a software engineer I know firsthand how well designed Microsoft development tools are. The value Microsoft tools bring to software development is tremendous and largely intangible. Further, they have long sought to create a consistency across the programming languages within their .Net development platform. Windows 8 is a further increase of that strategy. It leverages productivity by increasing consistency. It lowers the learning curve and saves developers time. It will allow the application ecosystem to flourish and grow at a rapid pace.
In a wonderful speech in 1980, Steve Jobs pointed out that a human on a bicycle uses less energy per distance traveled than even the most efficient animal; but without the bicycle we humans are far behind. The computer, he said, is like a bicycle for the mind. As technology has progressed, we have created more types of bicycles, all which operate slightly differently. Windows 8 is an attempt to unify the bicycle. The value the unification will bring to developers and consumers, if realized by Microsoft, will be tremendous.
The value these things create for people is intangible. It is never measurable. But if they create value for people, they will be able to realize a portion of that value themselves.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.