HP makes Windows 7 the 'Classic Coke' of PCs
Will Windows 8's mixed reception fuel a boost in sales for the next iteration?
HP is doing something that Coca-Cola tried back in the 1980s: revive flagging product sales by introducing a classic flavour. In this case, the secret ingredient is Windows 7. And the marketing disaster that precipitated the campaign is much-maligned Windows 8.
HP, which saw PC sales fall by more than 12 per cent in 2013, has started promoting Windows 7 desktop and notebooks to consumers in an effort to stimulate sales by offering a more familiar, desirable operating system.
The marketing campaign is already being seen as evidence that Windows 8 is among the worst product launches in Microsoft's history and a major contributor to the 10 per cent 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 and Google 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 per cent of the install base. Windows XP, introduced in 2001 and coming to end of life in April, continues to hold nearly 29 per cent of the install base. Whereas Windows 8 and Windows 8.1 (the updated version) hold a scant 10.5 per cent.
Internally, Microsoft employees reportedly refer to Windows 8 as "the New Vista," which was predecessor to Windows 7 and widely criticised for its flaws and poor sales.
Interesting that some Microsoft employees - and many others in the PC world - call Windows 8 the New Vista, because the HP campaign around Windows 7 is reminiscent of what happened with Coca-Cola back in the 1980s.
In the early 1980s, Coca-Cola was under increasing pressure by rival Pepsi. Market share of the flagship cola was down to 23 per cent and Pepsi was outselling Coke in supermarkets. The presumption was 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. And 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 that 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 that 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 per cent, 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.
As part of our special editorial partnership, CRN is publishing this article from Channelnomics.