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Tuesday, January 5, 2016
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China Levels Antitrust Allegations Against Microsoft

China's State Administration for Industry and Commerce on Tuesday launched the latest in a series of investigations against Microsoft for possible violations of the country's antimonopoly law.

Back in July 2014, about 100 SAIC officials burst into four Microsoft offices in various parts of China and copied contracts and records, downloaded data from company servers, and questioned executives.

The latest probe seeks answers to major questions arising from the data seized, according to news reports.

"We're serious about complying with China's laws and committed to addressing the SAIC's questions and concerns," a Microsoft spokesperson said in a statement sent to the E-Commerce Times by Chelsea Rauch of WE.

What Seems to Be Happening

SAIC wants Microsoft to submit a complete explanation for problems discovered in the data, according to reports.

In 2014, the company was suspected of not fully disclosing information about the Windows OS and Microsoft Office applications, causing incompatibility problems. Under Chinese law, introducing incompatibilities without advance warning to users could be considered anticompetitive behavior.

The 2014 raids hit Microsoft offices in Beijing, Liaoning, Fujian and Hubei, as well as the Dalian officers of IT consultancy Accenture, which reportedly performs financial work for Microsoft on an outsourced basis.

China had suspected Microsoft of violating its antimonopoly laws since June 2013 regarding compatibility problems, bundling and document authentication for its Windows OS and Microsoft Office applications, the SAIC said in 2014.

"Microsoft has always been a favorite target worldwide for antitrust action, some of it well deserved and some of it not," said Laura DiDio, a research director at Strategy Analytics. "The EU, for instance, has repeatedly gone after them."

Is It Politics, or Just Business?

The 2014 raids followed China's banning government computers from using Windows 8 after whistleblower Edward Snowden's revelations of the U.S. National Security Agency's surveillance activities raised concerns about security.

They also came shortly before Microsoft's Xbox One became the first gaming console to be released in China since Beijing banned console sales in 2000.

China has been cracking the whip on American companies in general, DiDio told the E-Commerce Times. "It's not just Microsoft, it's Google, Qualcomm and others as well."

The actions against Microsoft were sparked by a complaint from Kingsoft, which develops the freeware Microsoft Office-compatible Kingsoft Office suite, according to an undated report from PaRR.

Kingsoft has relationships with IBM, Dell and Intel, and there have been complaints that in some cases its apps aren't compatible with Windows or Microsoft Office.

SAIC received a complaint from an unnamed company in June 2013 alleging Microsoft had failed to fully disclose information related to the Windows OS and the Microsoft Office suite, creating problems with interoperability, tie-in sales and document certification, PaRR reported.

What's at Stake for Microsoft

"The timing of this probe is pretty suspicious because Microsoft recently signed partnership agreements with a number of Chinese companies," DiDio said.

These include state-owned China Electronics Technology Group and Baidu.

Microsoft has staked its future on Windows 10, which it aims to have running on more than 1 billion devices worldwide within two to three years.

That ups the stakes for Microsoft because "it needs the Chinese market, the Japanese market, India," DiDio pointed out. "Microsoft won't get to those numbers with the U.S. and Europe alone."

The company might have to knuckle under eventually because "this goes into gaming and entertainment where China can throw up huge roadblocks," she suggested. "China could hit Xbox sales as well."

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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Before the Internet, messages were spread by television and newspaper ads and highway billboards. Today that is done through social media. Virtually everyone knows about it, and many people use it. Does it make any sense that a U.S. government agency could violate any laws for using social media to carry out its mission?

Doesn't make sense to me. However, last month, the U.S. Government Accountability Office ruled that the Environmental Protection Agency violated federal law and took part in covert propaganda by using social media to solicit support for an Obama administration rule aimed at protecting streams and surface waters.

Having followed the EPA for many years, I have always thought that the point of the agency is to help protect the environment for future generations. Using social media to help protect the nation's streams and surface waters seems to make a lot of sense, particularly since the EPA's website states that its mission is to protect health and the environment.

Free Speech and Social Media

Over the years, many people have filed lawsuits involving libel, slander and even revenge porn related to anonymous social media postings. Since under the U.S. Constitution, the First Amendment gives everyone the right to free speech, the principles should apply to social media.

However, when these types of cases were first filed in the 1990s, they routinely failed, maybe because judges didn't understand or lawyers were not good at explaining their claims, or both. Then around 2000, U.S. courts accepted what was called "cybersmear" as a legitimate legal claim. However, if there was a grain of truth to a statement in question, it was not considered cybersmear.

For example, if a posting stated that an EPA commissioner was incompetent, which is an opinion, that posting would be considered free speech under the First Amendment. However, a posting stating that the commissioner is a convicted felon, if untrue, would be not be protected free speech.

The standard also is different for a public figure than for a private citizen. In 1964, the Supreme Court decided in New York Times v. Sullivan that slander or libel directed at a public figure is entitled to less protection than a nonpublic figure. Based on the Sullivan standard, the EPA is open to criticism, but whether is violating a federal law is altogether different.

EPA Doesn't Back Down

Last month, EPA spokesperson Liz Purchia posted a blog on the EPA website defending the agency's use of the GSA-approved Thunderclap social media platform "to get the word out about our historic Clean Water Rule -- a law to better protect the streams and wetlands that are the foundation of our nation's water resources."

The page on Thunderclap included the EPA logo and byline with this message: "Clean Water is important to me. I support EPA's efforts to protect it for my health, my family, and my community," she said.

The EPA Thunderclap page was "linked to an EPA website with information about the rule. We shared this page with all of our stakeholders -- no matter what sector, geographic location, or perspective -- with the goal of catalyzing our public engagement process, and getting people excited about the importance of clean water," Purchia said.

Apparently the EPA is not backing down.

Senate Inquiry

The GAO is the investigative arm of the Congress, which is currently controlled by the Republican Party. This inquiry began last year when the Senate Environment and Public Works Committee requested that the GAO review the EPA's use of social media, and in particular Thunderclap.

During the inquiry, Sen. James M. Inhofe of Oklahoma, the committee chairman, requested that the GAO expand its inquiry to examine "whether EPA's activities constituted prohibited covert propaganda or publicity." Other senators requested more information.

The "GAO's finding confirms what I have long suspected, that EPA will go to extreme lengths and even violate the law to promote its activist environmental agenda," Inhofe said after the GAO submitted its 26-page report last month.

The Senate committee took note of other highlights of the GAO report about the EPA.

"We conclude that EPA's use of Thunderclap constitutes covert propaganda, in violation of the publicity or propaganda prohibition," the report says.

"We conclude that EPA violated the anti-lobbying provisions contained in appropriations acts for FY 2015 when it obligated and expended funds in connection with establishing the hyperlinks to the webpages of environmental action groups," it maintains.

"Because EPA obligated and expended appropriated funds in violation of specific prohibitions, we also conclude that EPA violated the Antideficiency Act, 31 U.S.C. § 1341(a)(1)(A), as the agency's appropriations were not available for these prohibited purposes," the report says.

Next Steps

Congress seems to have made this more political than legal in nature, which means there likely will be a political resolution rather than a lawsuit between the GAO and the EPA.

Regardless of how the issue is resolved, the legal issues presented are interesting and could result in more scrutiny of other U.S. agencies and their use of social media, giving other agencies free rein over social media use, or something in between.

E-Commerce Times columnist Peter S. Vogel is a partner at Gardere Wynne Sewell, where he is Chair of the Internet, eCommerce & Technology Team. Peter tries lawsuits and negotiates contracts dealing with IT and the Internet. Before practicing law, he was a mainframe programmer and received a master's in computer science. His blog, Internet, IT & eDiscovery, covers a broad range of technology topics. You can connect with him on Google+.

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Monday, January 4, 2016
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Will 2016 be a breakaway year for virtual reality technology?

Exhibitors at CES 2016 this week seem to think so. More than three dozen of them will be flogging their VR wares at the show, more than double the number from last year.

"2016 will be the year of VR," said Brian Blau, a research director at Gartner.

"That's pretty clear with all the hardware that's going to be coming on the market and the push by developers and content producers into VR," he told the E-Commerce Times. "It will be a real awakening year for VR."

Still a Niche

Other analysts are being cautious.

"It will remain a niche, but 2016 will set the stage for the future," said Cliff Raskind, a senior director at Strategy Analytics.

"It could be a breakout year, but it will by no means cross the chasm into the mainstream," he told the E-Commerce Times.

The jump to the mainstream is at least three years away, according to a Strategy Analytics report authored by Steven Waltzer and released in October.

"The virtual reality (VR) market is expected to remain niche among hard core gamers and tech enthusiasts for at least the next three years," he wrote, "but as technology allows for a higher quality user experience at a lower price point, it will eventually emerge as an exciting new mainstream content consumption medium."

Sixfold Jump

Whether VR is a niche or not, vendors should see demand for their products climb to heights they haven't seen before.

VR headset shipments will reach 1.2 million units in 2016 -- six times what they were last year, predicts the Consumer Technology Association, which sponsors CES.

IHS Technology pegs headset shipment numbers even higher than that: 7 million.

Those numbers include all forms of headsets, from the most expensive to the cardboard models Google peddles.

"High-end integrated display headsets coming to market in 2016, which include PlayStation VR, Oculus Rift and HTC Vive, will sell well within a relatively narrow audience of enthusiast gamers that are very keen to try out the latest technology at any price point," said Piers Harding-Rolls, a director at IHS.

"I'm not a VR skeptic," he told the E-Commerce Times. "I think the technology has significant potential, but I also think we have to be realistic about how strongly it will be adopted in the short term."

Cool but Clumsy

One barrier to mainstream adoption may be the clumsiness of VR hardware.

"It's a bit of a cumbersome experience," said Glenn Hower, an analyst with Parks Associates.

"It's cool and there's a novelty aspect to it, but right now it's a tough sell for the mainstream markets," he told the E-Commerce Times.

"There's still some work to do with user experience," Hower added. "2016 may see some more significant implementations, but I'm hesitant to say it will make the jump from novelty to mainstream."

More Muscle Needed

Another barrier to VR adoption may be a lack of horsepower in the existing base of personal computers.

Less than 1 percent of the 1.43 billion PCs in the world have the muscle to run VR, according to an Nvidia estimate.

For gamers, who are some of the most enthusiastic fans of VR, that means shelling out US$300 for a new graphics card -- in addition to $350 to $450 for the VR hardware.

"As such, I forecast only a minority of PC gamers will have access to the necessary source hardware to drive a successful VR experience when the headsets are launched in Q1 2016, which reduces the addressable market for PC-based headsets significantly," IHS' Harding-Roll noted.

At the same time Nvidia was appraising the ability of the installed base of PCs to run VR, it also was launching a marketing campaign -- called "VR Ready" -- to inform consumers about which of the company's graphics cards can handle VR.

"I think we're seeing a heavy marketing play here," Gartner's Blau observed.

John Mello is a freelance technology writer and contributor to Chief Security Officer magazine. You can connect with him on Google+.

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The U.S. Federal Trade Commission is engaged in an internal struggle over how it should assess the effect on consumers when businesses fail to provide proper e-commerce security.

The outcome of the debate will have a significant impact on the FTC's ability to initiate cybersecurity violation cases. Depending on the outcome, in fact, the legal issue could spill over to federal courts or even Congress for resolution.

The internal debate surfaced last month. FTC staff members issued a notice that they were challenging the dismissal of a commission complaint against a company for alleged cybersecurity failures. An FTC administrative law judge who was selected to rule on the complaint dismissed it.

The staff challenge will occur through an appeal of the ALJ's decision to the full commission.

Exposure of Data Triggered Complaint

In the complaint, the FTC contended that cyberprotection deficiencies at LabMD had exposed personal consumer information. However, the ALJ dismissed the complaint in November, ruling that the FTC staff had failed to prove that the exposure and dispersion of the electronically processed records on company networks had caused any injury to consumers.

The ALJ's decision "confirms what our client, LabMD, has said all along, which is that the Federal Trade Commission's case is meritless," said Daniel Epstein, executive director of Cause of Action, which provided legal counsel to LabMD in contesting the FTC's charges.

The FTC "produced no evidence that even a single patient was harmed by LabMD's alleged inadequacies," he said. "Instead, it was the FTC that victimized LabMD and its employees, and more importantly, the doctors that it served."

LabMD's business involved performing diagnostic specimen tests for medical providers and managing related records for medical and insurance purposes.

The evidence in the case involved peer-to peer computer exchanges, expert testimony and physical printouts of data. The proceedings also involved issues regarding assertions of a relatively limited scope of exposure.

Injury Standard Questioned

Broadly speaking, the FTC staff contended that company's clients were injured because the mere exposure of the personal data put them at risk. However, the law judge questioned the applicability of such a broad standard for meeting the federal legal definition for injury or harm.

The FTC is empowered to initiate enforcement actions in the event it suspects a party has engaged in "unfair or deceptive" business practices. By law, the FTC must show that a business practice "causes or is likely to cause substantial injury to consumers," in order to be judged as unfair. The FTC claimed LabMD engaged in unfair business practices by putting clients at risk.

However, the ALJ rejected the staff's position, concluding that evidence of actual harm was lacking. Financial injury, inconvenience and even embarrassment are some of the types of harm considered in such cases. The FTC staff's failure to demonstrate any material, actual harm over a significant period also showed that the potential for future likely injury was virtually nonexistent, the ALJ contended.

"The absence of any evidence that any consumer has suffered harm" as a result of LabMD's "alleged unreasonable data security" after the passage of many years "undermined the persuasiveness" of the FTC staff that such harm likely would occur, FTC Chief Administrative Law Judge D. Michael Chappell said in his dismissal of the case.

In line with his emphasis on the need to provide evidence of actual harm, Chappell questioned the mere recitation of risk statistics related to cyber data exposure or breaches for fulfilling the legal definition of likely harm. He turned around the mathematical risk probabilities the FTC staff cited in noting that, given such statistics, it was curious that the FTC staff could not cite a single actual consumer victim.

Case Could Become a Benchmark

The evidence produced to support the charges may have been unique in that it was hotly contested and involved some convoluted and controversial elements regarding the validity of sources and the role of a third party. Still, the outcome of the case could have a broad impact on similar cases in that the decision raised the issue that the FTC will need to meet a stricter real-time standard for proving harm and injury in cyberprotection cases than it has in the past.

"Importantly, the ALJ opined that historically, liability for unfair conduct has only been found in instances where there is proof of actual consumer harm," said Patricia Wagner, chief privacy officer at Epstein Becker & Green, in a case analysis.

The ALJ held that the standard for what is likely to cause substantial injury "does not mean that something is merely possible. Instead, likely means that it is probable that something will occur," she noted, citing the decision.

"One of the striking things about the ALJ's opinion is his willingness and ability to parse through the evidence, understand what the studies presented demonstrated -- and failed to demonstrate -- and evaluate the circumstances in a well-reasoned manner. Rather than just assume that a breach automatically means that consumers would be harmed, he evaluated the facts and circumstances at issue in this case," Wagner told the E-Commerce Times.

"The recent LabMD decision serves to highlight that the commission's cybersecurity authority under the FTC Act is not without limits, and that the commission must prove that specific cybersecurity incidents actually meet the requirements for an unfair or deceptive practice under the statute," Chris Burris, a partner at King & Spalding, told the E-Commerce Times.

While the issues the LabMD case raised are significant in terms of cyberlaw -- especially related to the FTC's role -- a resolution of the injury issue could take awhile. First, the FTC staff's appeal of the ALJ decision means that the full commission could possibly overturn the ruling.

In its appeal, the FTC staff continued to contend that just the exposure of data creates a risky situation for consumers and that in itself satisfies the legal threshold for harm or injury. The ALJ mistakenly neglected to assess the substantial risk of alleged deficiencies at LabMD involving passwords, firewalls and other protection measures, the staff noted in its appeal.

The law judge "failed to analyze LabMD's multiple, systemic, and serious security failures before issuing [the] ruling," the staff said. "This was a fatal flaw: whether LabMD's security practices caused or were likely to cause substantial consumer injury can be determined only through an analysis of the significant risks created by LabMD's security failures. The decision is wrong as a matter of law and fact."

The commission has set a deadline of Feb. 5 for LabMD to file an answering brief in the internal appeals process. The outcome of the internal FTC appeal could then be brought before a U.S. appeals court.

"We will take this to the U.S. Supreme Court if necessary," LabMD CEO Michael Daugherty told the E-Commerce Times.

LabMD ceased normal operations in 2014 as a result of the FTC action.

John K. Higgins is a career business writer, with broad experience for a major publisher in a wide range of topics including energy, finance, environment and government policy. In his current freelance role, he reports mainly on government information technology issues for ECT News Network.

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Sunday, January 3, 2016
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General Motors has agreed to invest US$500 million in Lyft, and the companies will work together to develop an integrated network of autonomous vehicles, they said in a joint announcement on Monday.

As part of the agreement, GM will become a preferred provider of short-term vehicles to Lyft customers, and it will provide them with its OnStar vehicle location services.

GM will gain a seat on the Lyft board of directors.

The companies see the future of personal mobility as "connected, seamless and autonomous," and they believe they can reach that goal more rapidly by working together, said GM President Dan Ammann, pictured above (center) with Lyft cofounders John Zimmer (right) and Logan Green (left).

Self-Driving Space Revs Up

The investment is part of Lyft's overall $1 billion capital raising effort, the company said, which includes $100 million from Saudi-based Kingdom Holding and several new and existing investors, including Janus Capital Management, Rakuten, Didi Kuadi and Alibaba.

The Kingdom contribution brings the company's investment total to $250 million, Lyft said.

Lyft -- the second largest ride-sharing service in the U.S., behind Uber -- provides more than 7 million rides per month in 190 cities nationwide, according to company figures.

GM is the latest automaker to jump into the autonomous vehicle space, which is under development on a number of fronts, in a bid to compete with Google, which has taken the lead in promoting this promising new industry to consumers.

"This shows GM is paying attention to that and positioning itself for when that day comes," said Egil Juliussen, a principal analyst at IHS.

Toyota late last year announced a $1 billion plan to invest in robotics and artificial intelligence. Other automakers, including Tesla, have begun testing autonomous vehicles.

Google, which has led the industry in this space, last year hired industry veteran John Krafcik, the former chief of Hyundai's U.S. operations, to lead its autonomous vehicle unit.

"We've talked in this space to a number of companies," said Vijay Iyer, spokesperson for GM's Global Connected Customer Experience and Urban Mobility business.

"I think it complements what we do quite well," he told the E-Commerce Times.

GM Wades Into the Pool

GM last fall signaled plans to expand its development in the self-driving space, announcing that it would provide a fleet of autonomous 2017 Chevrolet Volts for use at it's Warren( Mich.) Technical Center campus.

The "supercruise" autonomous vehicle feature, which has been undergoing tests since 2012, will be available in its 2017 Cadillac CT6 vehicles, GM said.

GM joined with Google in 2014 to test a ride-sharing service that utilized Chevrolet Spark electric vehicles, and it announced a New York City program called "Let's Drive NYC." Residents of the Ritz Plaza, a 479-unit luxury residence in Times Square, were given access to Chevrolet Trax and Equinox vehicles and parking at 200 Icon Parking System garages around the city for up to three hours a month, with additional time priced at $10 an hour.

GM also worked with dealerships in Europe to launch a ride-sharing program called "CarUnity" with its Opel brand.

The company has been testing a ride-sharing program at Jiao Tong University in Shanghai, with a fleet of EN-V 2.0 electric concept vehicles.

The potential market for autonomous vehicles is massive, IHS' Juliussen told the E-Commerce Times, as about 1.1 billion of the world population of almost 7 billion are licensed drivers.

There is a massive market of potential customers who cannot drive their own vehicles, he pointed out, ranging from those who cannot afford to own their own cars, to members of two-income households who may not need two full-time cars, as well as senior citizens and disabled individuals who cannot drive their own vehicles.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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Microsoft on Monday announced that its Windows 10 operating system is now active on more than 200 million devices.

Windows 10 adoption accelerated at the end of 2015, with more than 40 percent of new devices activated since Black Friday, said Yusuf Mehdi, senior vice president of the online audience business group at Microsoft.

Windows 10 is on the fastest growth trajectory of any of version of the Windows OS, and the newest edition is outpacing Windows 7 by nearly 140 percent and Windows 8 by nearly 400 percent, he said.

However, it trails behind the more than decade-old Windows XP and even Windows 8.1 in terms of overall Web traffic, NetMarketShare reported.

Windows 10 had 9.96 percent of all Web traffic generated on desktop operating systems in December, compared to 10.9 percent and 10.3 percent, respectively, for Windows XP and Windows 8.1, according to its latest report, released last week.

In With the New

"With 200 million installs already, Windows 10 is an undeniable success for Microsoft already," said Josh Crandall, principal analyst at Netpop Research.

It has built on the success that was Windows 7, said Scott Steinberg, principal analyst at TechSavvy Global.

"Microsoft was wise to listen to customer feedback and took the suggestions to heart," Steinberg told the E-Commerce Times. "It is also preinstalled on all new devices, so anyone who bought a new computer already adopted Windows 10."

Reaching Its Goals

Even with the surge, Microsoft has quite a way to go to reach its target of 1 billion installs within the first year of release, Crandall told the E-Commerce Times.

"Windows 10 will continue to build momentum in the market, but it's just going to take more time to educate the market than previous operating system releases," he noted.

"Microsoft is still suffering the Windows 8 debacle, and for consumers on Windows 7, they have heard the horror stories of Windows 8 and are reluctant to change anything in their computing environment," Crandall added.

Out With the Old?

"Getting users of older Wintel systems [to upgrade] is always problematic, especially those with awful memories of trying to upgrade to Vista," said Charles King, principal analyst at Pund-IT.

In this case, Microsoft is a victim of its own success, he told the E-Commerce Times.

"Windows 7 was a terrific OS, and its satisfied users are this decade's version of the XP users who forcefully resisted upgrading to more contemporary versions of Windows," King said.

"In addition, Microsoft did an excellent job of correcting problematic issues in Windows 8 with the 8.1 upgrade," he noted. "In both of these cases, users simply don't feel any compelling need to upgrade, and that's likely to remain the case until they purchase new systems."

Today's productivity applications don't require the hardware upgrades of decades past -- and that means older software typically will do the job.

"For consumers on Windows 8, most had purchased new computers, and their processing power is sufficient for their needs," said Netpop Research's Crandall.

"They don't need a new computer to surf the Web or run the latest Office software," he added. "So, the consumer adoption curve of Windows 10 is not nearly as steep as it had been for previous Windows operating systems."

Business as Usual

Businesses are slower to adopt a new OS for many of the same reasons. Current software and applications already run on Windows 7/8.1 machines, so there is little incentive to upgrade.

As a result, "corporations have yet to adopt Windows 10 in full force," said Crandall. "We'll start to see increased adoption in the corporate world in 2016."

The final consideration may be a changing business model.

"Windows 10 licensing is a paradigm shift from previous versions," noted Crandall.

"It's a subscription-based model rather than purchase, i.e., purchasing a license to use," he added.

"While free today, it's unclear how Microsoft will charge for the operating system in the future," said Crandall.

"Consumers understand what it means to purchase a license and own the media for their use, however they need," he said. "With a subscription-based model, there is less clarity around what they can do with the media, whether they can reinstall it if their computer crashes or upgrade their hardware."

Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing. You can connect with Peter on Google+.

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Microsoft on Monday announced that its Windows 10 operating system is now active on more than 200 million devices.

Windows 10 adoption accelerated at the end of 2015, with more than 40 percent of new devices activated since Black Friday, said Yusuf Mehdi, senior vice president of the online audience business group at Microsoft.

Windows 10 is on the fastest growth trajectory of any of version of the Windows OS, and the newest edition is outpacing Windows 7 by nearly 140 percent and Windows 8 by nearly 400 percent, he said.

However, it trails behind the more than decade-old Windows XP and even Windows 8.1 in terms of overall Web traffic, NetMarketShare reported.

Windows 10 had 9.96 percent of all Web traffic generated on desktop operating systems in December, compared to 10.9 percent and 10.3 percent, respectively, for Windows XP and Windows 8.1, according to its latest report, released last week.

In With the New

"With 200 million installs already, Windows 10 is an undeniable success for Microsoft already," said Josh Crandall, principal analyst at Netpop Research.

It has built on the success that was Windows 7, said Scott Steinberg, principal analyst at TechSavvy Global.

"Microsoft was wise to listen to customer feedback and took the suggestions to heart," Steinberg told the E-Commerce Times. "It is also preinstalled on all new devices, so anyone who bought a new computer already adopted Windows 10."

Reaching Its Goals

Even with the surge, Microsoft has quite a way to go to reach its target of 1 billion installs within the first year of release, Crandall told the E-Commerce Times.

"Windows 10 will continue to build momentum in the market, but it's just going to take more time to educate the market than previous operating system releases," he noted.

"Microsoft is still suffering the Windows 8 debacle, and for consumers on Windows 7, they have heard the horror stories of Windows 8 and are reluctant to change anything in their computing environment," Crandall added.

Out With the Old?

"Getting users of older Wintel systems [to upgrade] is always problematic, especially those with awful memories of trying to upgrade to Vista," said Charles King, principal analyst at Pund-IT.

In this case, Microsoft is a victim of its own success, he told the E-Commerce Times.

"Windows 7 was a terrific OS, and its satisfied users are this decade's version of the XP users who forcefully resisted upgrading to more contemporary versions of Windows," King said.

"In addition, Microsoft did an excellent job of correcting problematic issues in Windows 8 with the 8.1 upgrade," he noted. "In both of these cases, users simply don't feel any compelling need to upgrade, and that's likely to remain the case until they purchase new systems."

Today's productivity applications don't require the hardware upgrades of decades past -- and that means older software typically will do the job.

"For consumers on Windows 8, most had purchased new computers, and their processing power is sufficient for their needs," said Netpop Research's Crandall.

"They don't need a new computer to surf the Web or run the latest Office software," he added. "So, the consumer adoption curve of Windows 10 is not nearly as steep as it had been for previous Windows operating systems."

Business as Usual

Businesses are slower to adopt a new OS for many of the same reasons. Current software and applications already run on Windows 7/8.1 machines, so there is little incentive to upgrade.

As a result, "corporations have yet to adopt Windows 10 in full force," said Crandall. "We'll start to see increased adoption in the corporate world in 2016."

The final consideration may be a changing business model.

"Windows 10 licensing is a paradigm shift from previous versions," noted Crandall.

"It's a subscription-based model rather than purchase, i.e., purchasing a license to use," he added.

"While free today, it's unclear how Microsoft will charge for the operating system in the future," said Crandall.

"Consumers understand what it means to purchase a license and own the media for their use, however they need," he said. "With a subscription-based model, there is less clarity around what they can do with the media, whether they can reinstall it if their computer crashes or upgrade their hardware."

Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing. You can connect with Peter on Google+.

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