Is Microsoft's Windows 8 U-turn a spinout?

(MoneyWatch) After growing rumors that Microsoft (MSFT) was considering major changes to Windows 8 in response to negative user reaction to the operating system's new look and feel, now it is official.

Microsoft will change "key aspects" of the user interface in a an undated release of Windows 8 later this year, according to a Financial Times interview with Tami Reller, the chief marketing officer and chief financial officer for Microsoft's Windows business unit. This is as big a tacit admission of defeat as the Coca-Cola Co. made when it changed the formula for its flagship drink and then had to reintroduce the original as Coke Classic within three months.

Only Microsoft has kept pushing on its own reformulation since last fall, more than twice as long as it took Coca-Cola management to realize its mistake. However, unlike the beverage company, the software firm may be too late -- as it has been for years -- with a distinct possibility that its former market strength is gone forever.

One of Microsoft's greatest strengths and weaknesses has been its cordial treatment of the past. Backward compatibility complicated Windows but also kept people and companies migrating to new versions for years and trusting in a learning curve that would not be overly long.

Windows 8 was going to change that last part. The tiled interface, developed for Windows Phone, was designed for a touchscreen device. Unfortunately for Microsoft and its customers, the vast majority of desktops and laptops sold do not have touch screens, which made the software clumsy and awkward for many users.

Hence the about-face. But unlike Coke in the 1980s, Microsoft is facing more than its list of rivals. Instead, people have been moving en masse to smartphones and tablets as mobile devices increasingly become the primary ways people satisfy their computing and electronic communications needs. Because it was so late with Windows Phone that it missed the chance to take a large share of the mobile market, allowing Apple (AAPL) and Google (GOOG) to set the agenda in that sphere and capture most of the market.

The problems with Windows 8 build upon Microsoft's earlier mistakes and slow reactions to market changes. Many consumers and businesses no longer consider Windows a necessity. Even with a more traditional look and feel to Windows 8, chances are that won't change, nor will the trending decline in PC sales.

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