Let's say the rumors are true, and that Microsoft does in fact bring back the Start button and a boot-to-desktop option to address longstanding user complaints. Can that fix what's ailing Windows 8? 

Perhaps, eventually — but Microsoft is still treating the symptom rather than the disease. The problem is the PC itself, not the operating system that runs it. And that's what Microsoft (and, secondarily, its Wintel partner Intel) really needs to transform.

At this point, it seems clear that the tiled, touch friendly Start screen and the lack of a boot option to the familiar "desktop" interface scared off some people who might otherwise have upgraded to Windows 8. Instead, those PC users stuck with their familiar Windows 7 or Windows XP interface, or powered down their PCs altogether and turned to their phones or tablets.

Wintel Panic

All of which has the onetime Wintel duopoly in a bit of a panic. Microsoft needs an OS that will delight consumers. It's so far failed in that, so it's apparently retrofitting Windows 8 for folks who need more handholding to move to the new OS. Similarly, Microsoft needs a robust apps environment, so it's looking to entice developers to its Windows Store. That's not going so well, either.

Intel, meanwhile, continues to push down the cost of its microprocessors to a point where Windows tablets running on its Core microprocessors can compete with the Android and iOS markets. By the holiday season, Intel executives said, we should see Core-based laptops at between $499 to $599, with new, more powerful Atom options in the $200 price range.

Put those together, and here's what needs to happen.

1. Downplay The Start Screen

If Microsoft brings back the boot-to-desktop option, the company faces an interesting marketing dilemma: Should it still promote the tiled Start screen that turns off at least some of its customers? No. That doesn't mean that Microsoft should change the Windows 8 interface — the Start screen was designed as a tablet interface, and should remain so. But Microsoft should make the Start screen the face of the Surface tablet, and make the Windows desktop the face of its Windows 8 advertising for PCs.

2. Gently Push New Users To The Desktop 

Clearly, a portion of Microsoft's customer base has been traumatized by its initial reaction to Windows 8. There's a real risk that these users may never return to the Windows fold.

But gently managing a boot-to-desktop option may mitigate some of that. Boot-to-desktop should be presented as one of the first options in the Windows installation, perhaps accompanied by something like this: "Would you like Windows 8 to boot to the Windows Desktop? The Windows desktop provides a familiar environment for users of Windows XP and Windows 7."

From there, let them explore and do as they wish. If the Start Screen is as compelling as Microsoft seems to think, at least some users will eventually move over of their own volition.

3. Solve The Blah Windows Apps Problem

One of the bigger problems with the Start screen that Microsoft so far hasn't been able to address is that most of the applications featured there are basically uninspiring (Fresh Paint excluded). With Windows XP and Windows 7, those applications were tucked away behind the Start button, where users were free to ignore them. With the Windows 8 Start screen, they're out there for the world to see and grow disillusioned with. And it's not immediately clear how booting to the desktop's empty expanse will be much of an improvement.

But by making the Windows 8 Desktop the focus, Microsoft's advertising, at least, can encompass the broad expanse of Windows apps out there. Mix and match! Steal a page from Apple. Highlight the flashiest apps, whether they be from the Windows 8 world or even from Windows 7. Legacy OS support is a feature, too. And free advertising for Adobe, EA, or some other developer can only engender goodwill.

4. Make Windows Shine On Tablets — Cheaply

Microsoft also desperately needs a successful mobile strategy. And the only real way to to do that is to offer more for less.

In other words, if Microsoft wants to leverage Windows in the mobile space, it needs to really leverage Windows. The Windows RT version of Surface failed in part because it was a crippled version of Windows 8; it's time to retire it. The Surface with Windows Pro, by contrast, could be a hit if its price falls far enough. And if Microsoft pushes hard to convince buyers that they can accomplish a whole lot more with a full-fledged Windows tablet than they can with competing products.

Microsoft needs to show that a Windows tablet — derivative of the Surface, or one based on the new quad-core "Bay Trail" chips — can offer desktop PC-class performance at tablet prices. We know tablets are mobile. Microsoft Stores need to feature a Windows tablet or convertible running the flashiest piece of software it can, on a conventional desktop monitor, with the price tag prominently displayed. The message: all this for $299??!! Why would I ever want an Android tablet?

5. Find A Mobile Apps Tiger Team

Tucking your Android or iOS phone in your pocket is an unconscious decision. And as more game developers choosing to write for iOS and Android, fewer are around to focus on Windows. There's another key advantage for iOS and Android, too: chances are that you can play the same game on your iPad and iPhone, or your Android phone and tablet. You can't often say the same for Windows Phone and Surface.

If users can't share apps, files, and other documents between the PC, notebook, tablet and phone, they're going to start looking elsewhere. Microsoft's realized this with its core apps, including Office and the Xbox. Netflix traverses the range of Microsoft's platforms, but that's about it.

There is no easy fix here. If Microsoft can't develop the apps it needs itself, it's going to have to go out and buy them. This is the Nintendo problem, writ large. Without AAA third-party software, Microsoft will have to go it alone. 

Delaying The Inevitable

IDC's right; the PC is dying. It's inevitable, and Microsoft is merely rearranging desk chairs on the Titanic. But in this case, there's a chance the ship could make harbor before it sinks.

Notebooks will eventually give way to tablets, whether or not they have a keyboard attached to them. Microsoft won the desktop, and it won the notebook. Now it needs to win tablets. If it shows weakness now, it will be buried. 

Can Microsoft throw enough money at these problems to fix them? It may have to. It can patch Windows 8, and Intel can help keep prices falling. But the apps and mobile problems require more extensive surgery, and the time to act is now.

Image Source: Flickr/yoshimov

Hewlett-Packard has said that a partnership between itself and gesture-technology provider Leap Motion is an opportunity for "incredible user experiences." But isn't this really just HP casting about for something, anything, to set it apart from it competitors?

(See also Leap Motion-HP Deal: Gesture Control Goes Mainstream.)

Leap executives said Tuesday that they see HP's clout justifying sales to other PC makers, as well as non-PC markets  like surgery and automation. But how does HP benefit from all this? A bit of sizzle from one of today's most hotly promoted technology firms, that's how. (Asus announced its own partnership with Leap earlier this year.)

And boy, does HP need some sizzle right now.

(See also This Tiny Gizmo Could Be A Very Big Deal In 2013 - And Beyond.)

PC Market In Free Fall

Just last week, IDC and Gartner chronicled a free-falling PC market, dubbing Microsoft's Windows 8 an anchor, when it was supposed to be a life preserver. Consumers are increasingly turning to tablets and phones as their "personal computing" devices. And without a viable tablet or phone offering (the Windows 8-based ElitePad excluded) HP must ride the barrel over the falls for at least the next two quarters. PC owners simply aren't replacing their PCs as quickly as they once might, which makes Hewlett-Packard, the leader in the PC market, look especially vulnerable. HP's PC shipments dropped by nearly 25% last quarter.

That's not to say that the Leap Motion partnership is nothing but a smokescreen. HP representatives said that there are viable technical reasons for the deal.

"Our customers are looking for new ways to interact with, and create content," an HP spokeswoman said in an email. "Leap Motion combined with HP technology and developer apps will offer incredible user experiences.

"Leap Motion's not intended to fully replace existing input mechanisms like the mouse or keyboard, but rather to augment them and provide new and/or improved functionality," she added. "Many creation and exploration tasks - like molding virtual clay or moving through maps - are intuitive in the real world but highly technical tasks when handled with computers. Leap Motion can help overcome the input barrier to give people a new interaction experience."

What Leap Motion Really Means To HP

Reading between the lines, two things jump out:

1. Expect HP to either commission or partner with a developer to ensure that the Leap Motion gestures are well represented with at least one showcase app, like Windows 8's Fresh Paint app
2. HP carefully avoided the use of the word "touch"

Navigating through a map doesn't seem that difficult (pinch to zoom? Scrolling mice?) but sculpting a piece of virtual clay might be a fun experience using Leap Motion's technology. Navigating in virtual space (as we did with the Leonard3Do at the Consumer Electronics Show this January) provides a new, fresh way of interacting with a computer. And that's exactly what new technologies like Windows 8 hoped to offer.

HP declined to comment when asked if Leap's technology was designed to replace touch, and another representative hasn't yet responded to my question of whether the Leap peripherals would be bundled with HP's (non-touch) desktop monitors. The latter capability would be quite useful, I think. 

A Leap Ahead Of Touch?

In a way, I was really hoping that HP would position the Leap technology as a way to enable touch-like interactivity, but without gunking up the screen. It may seem a bit fussy, but who really wants to have to scrub off a fine glaze of Cheetos after lunch?

Bob O'Donnell, a PC analyst with IDC, said he sees the Leap Motion partnership providing another way of interacting with the PC, augmenting the mouse and keyboard. But he said it's also pretty impressive.

And Leap Motion could also save HP - and consumers - some money: A 13-inch touchscreen costs a PC maker $65 or $70 more than a similar non-touch screen; Leap's technology will probably be about $45, O'Donnell predicted. That's a big difference, especially with touchscreen competition making them hard to come by these days. "Remember, these guys argue over nickels and dimes," O'Donnell concluded.

At this point, the PC industry seems inclined to clutch frantically at whatever splinters it can to keep itself from drowning in sea of red ink. Will the partnership between Leap Motion and Hewlett-Packard be enough to save HP? Probably not, but it sure can't hurt to try.

But here's another thought: wouldn't building a competitive tablet be a better idea for HP?

The PC market tanked in the first quarter, IDC reported. Shipments fell by a stunning 14% from a year earlier, almost twice what IDC had predicted and the worst performance since the firm began tracking the market in 1994. Can we all agree now that Windows 8 has wounded an already dying PC market?

Gartner chimed in, too: worldwide PC shipments totaled 79.2 million units in the first quarter of 2013, a 11.2 percent decline from the first quarter of 2012. Global PC shipments went below 80 million units for the first time since the second quarter of 2009, the firm said.

The question now is just how severe the damage is. And man, it looks bad.

Granted, first-quarter sales figures inevitably fall from the fourth quarter. But that's why quarter-over-quarter metrics are important, as they eliminate seasonal variation. Unfortunately, this is the fourth straight quarter of declining PC sales. U.S. sales fell 12.7 percent year-over-year, and 18.3 percent versus the fourth quarter.

Windows 8, In The Office, With A Touchscreen

When you put it that way, IDC's report reads like an obituary. And Windows 8 appears to be holding the knife.

"At this point, unfortunately, it seems clear that the Windows 8 launch not only failed to provide a positive boost to the PC market, but appears to have slowed the market," said Bob O'Donnell, IDC's vice president of clients and displays, in a statement. He continued:

While some consumers appreciate the new form factors and touch capabilities of Windows 8, the radical changes to the UI, removal of the familiar Start button, and the costs associated with touch have made PCs a less attractive alternative to dedicated tablets and other competitive devices. Microsoft will have to make some very tough decisions moving forward if it wants to help reinvigorate the PC market.

PC shipments fell to 76.2 million units, down from 88.6 million units in the same quarter last year. Sales fell across the board, in all regions, and every single one of the top PC manufacturers saw sales fall — although Lenovo eked out an almost flat trajectory with a shipment decline of only about 5,000 units. HP, Dell, Acer, and Asus all saw shipments decline in double digits. In the United States, lenovo was the only named vendor to enjoy positive growth.

Via email, O'Donnell told me that recent discounts for Windows 8 PCs and tablets in the Windows Store and elsewhere were likely spurred by the low shipment numbers, as I suspected. Microsoft had claimed that the discounts were "seasonal."

Where Do We Go From Here?

"Although the reduction in shipments was not a surprise, the magnitude of the contraction is both surprising and worrisome," David Daoud, IDC research director for its Personal Computing analysis, said in a statement. And the bad news doesn't stop there, he said:

The industry is going through a critical crossroads, and strategic choices will have to be made as to how to compete with the proliferation of alternative devices and remain relevant to the consumer. Vendors will have to revisit their organizational structures and go to market strategies, as well as their supply chain, distribution, and product portfolios in the face of shrinking demand and looming consolidation.

Translation: PC makers are in for a world of hurt. Consolidation is inevitable, and lots of people are going to lose their jobs.

We've known for some time that tablets, phones, and ultraportables like the Google Chromebox are taking an increasing share of user time, attention, dollars, and computing power. But this is a disaster. As Daoud notes, we may see a note of panic begin to creep in to traditional PC vendors. It certainly explains why companies like Hewlett-Packard — still the top PC vendor, by the way — are making Chromebooks. 

Just how did HP fare, anyway? In a word: Awful. Sales fell by 23.7 percent, and Lenovo is within striking distance of becoming the world's largest PC vendor. Lenovo's sales were essentially flat, and HP's market share is 15.7 percent worldwide, with Lenovo at 15.3 percent. Dell's sales plunged 10 percent, Acer's fell a whopping 31.9 percent, and Asus was down 19.2 percent. Acer faces increasing competition in mini notebooks.

Even Apple's U.S. sales were off by 7.5 percent by IDC's reckoning — yet another indication of how bad things are. As if we needed one.

PC makers will be reporting first quarter financial results soon, and traditionally weak second quarter results are only a few months down the road. It's going to be an ugly time for PC hardware makers. Buckle up.

Updated at 3:45pm PT with Gartner results, and again on April 11 at 10:50am PT to clarify Apple's U.S. sales, which declined 7.5% year-over-year in IDC's data.

Image Source: flickr/OpenSkyMedia

Gartner has finally come out and said it: The PC market is dying.

Except it hasn't said that, quite. But it is, and saying so is really important.

The market-research firm predicts a 7.6% decline in PC sales this year, to 315 million units (including desktops and notebooks) from the roughly 341 million PCs sold in 2012. The real knife in the PC's heart, though, is that Gartner is now finally willing to predict a long-term decline: 302 million PCs in 2014, falling to 272 million in 2017, approaching the sales levels of 2006 and 2007. 

"While there will be some individuals who retain both a personal PC and a tablet, especially those who use either or both for work and play, most will be satisfied with the experience they get from a tablet as their main computing device," said Carolina Milanesi, research vice president at Gartner, in a statement. "As consumers shift their time away from their PC to tablets and smartphones, they will no longer see their PC as a device that they need to replace on a regular basis."

Gartner predicted that tablet sales would outpace the PC market sometime between 2014 and and 2017. By then, the firm predicted, manufacturers will sell 468 million tablets, almost double that of the PC market. Phone sales will top 2 billion units.

What Gartner Can't Say, And Why

Gartner, however, can't bring itself to say the PC market is shrinking toward irrelevance. Instead, it describes the PC market as "transitional," in much the same way companies firing large swathes of their workforces insist that employees have been "downsized." If Gartner was a brokerage firm, its analyst would have placed a "hold" rating on the PC market, with all the wishy-washy implications that word connotes.

"Transitional" is one of those wussy words that says nothing. Here it's designed primarily to protect the lucrative relationship that Gartner has with its clients. If Gartner declares an industry dead, why should a company like Dell spend thousands of dollars a pop for a report that says so?

"An analyst cannot issue a sell rating because he doesn't want to lose access,'' former securities analyst Tom Larsen told Bloomberg in 2007. Exactly.

To Gartner's credit, the company began hedging its bets way back into 2010, when the company noted five "disruptive forces" challenging the PC industry, which I've condensed to three below:

• Stale "mature markets" like the United States;
• Thin clients;
• A shift in consumer purchasing habits to tablets and other mobile devices that would displace PC sales and incline companies and individuals to keep PCs longer.

Only that last point appears prescient today — and only if you forget that Gartner issued its report in Nov. 2010, seven months after Apple launched the iPad.

Why Gartner's Hedging Matters

On balance, then, Gartner's report is nothing more than a reactive sell-side Wall Street analyst which issues a "sell" recommendation after a company has already issued bad news that's tanked its stock. The PC industry is dying, so let's move on.

But we actually need a company like Gartner to declare the PC dead — or at least to release data that supports that view, as it's just done, because companies across all industries use reports from Gartner, IDC, and others to justify their investments.

In order to develop a new PC version of TurboTax, for example, Intuit must demonstrate that there's a market for it. Gartner's report indicates that Intuit and other PC developers should consider abandoning the PC in favor of either a Web service or dedicated applications for various mobile platforms, at least if they want to address a market that's growing instead of shrinking.

We've known since 2010 that mobile devices would play an ever increasing role in our lives. But it's become increasingly clear that the cycle may be accelerating. 

Over at his blog Tech-Thoughts, analyst Sameer Singh noted recently that developers are already picking up on this:

[T]he growth of Windows 8 apps has noticeably slowed in Q1 2013. According to the data, the Windows Store is expected to top 50,000 apps by the end of March, but MoM [month-over-month] growth has slowed to just 10-15%.

If the trend continues, the reasons for buying a new PC also decline. Microsoft has begun paying small developers a pittance — $100 per app — to develop for the Windows 8 platform. But that's barely going to pay for a round of beer and appetizers at the end of the day.

"Microsoft's promotion is primarily aimed at low-end publishers," Singh wrote. "Their prime concern at the moment isn't app quality, but quantity. Unless the app growth on the Windows Store remains strong, Microsoft has very little chance of attracting many major developers to the platform."

Gartner's data would indicate that Microsoft faces long odds there. Even if Gartner's too scared to say it.

Image via Flickr/Qfamily

The PC is market is expected to shrink. Again.

The smartphone market is expected to grow. Again.

On Monday, IDC predicted that PC sales will fall 1.3% in 2013, and that smartphone sales will continue their explosive growth, topping 50% and displacing the legacy feature phone as the dominant mobile phone platform. 

Although IDC released the two reports separately, they're best considered together, for context. What IDC predicts merely reflects the conventional wisdom: that the age of the PC is ending, and that the smartphone is the dominant platform. And, if the Apple iWatch is real, and Google Glass becomes a viable platform, then we have the past, present, and future of the computing market: the PC, the phone, and wearable computing. 

The Windows 8 Phenomenon

The 2012 performance of the PC market could be written off as a consequence of Windows 8: the pause in sales before the launch, followed by what might be called a "mild" reception by the market. PC sales fell 3.7% for the year, IDC found, with an 8.3% drop in fourth-quarter shipments. U.S. PC sales fell 6.5% for the fourth quarter and 7.6% for the year.

"The PC market is still looking for updated models to gain traction and demonstrate sufficient appeal to drive growth in a very competitive market," said Loren Loverde, an analyst for IDC, in a statement. "Growth in emerging regions has slowed considerably, and we continue to see constrained PC demand as buyers favor other devices for their mobility and convenience features. We still don't see tablets (with limited local storage, file system, lesser focus on traditional productivity, etc.) as competitors to PCs – but they are winning consumer dollars with mobility and consumer appeal nevertheless."

Gartner hasn't yet released its 2013 PC forecasts, but has already said that PC sales dropped 4.9% in the fourth quarter, as it seems consumers just didn't really care about them any more.

Smartphones: A Worldwide Phenomenon

Smartphones, meanwhile, have worked their way through "mature" markets like the United States and into the high-volume, lucrative BRIC (Brazil, Russia, India, China) countries, IDC reports. As the smartphone begins selling in high volume in those regions, look for even higher shipment numbers: IDC predicts that more than 1.5 billion smartphones will be shipped by the end of 2017, worldwide, or more than two-thirds of the phone market. In India, for example, less than half of the phones sold there in 2017 will be smartphones, IDC predicted - and yet it will be the world' third-largest smartphone market.

Gartner, meanwhile, said that sales of mobile phones actually fell 1.7%  during 2012 - not because of lack of demand, but due to consumers turning to smartphones instead of feature phones.

Meanwhile, IDC reported earlier this month that tablet sales reached record levels, 52.5 million units, during the fourth quarter.

PC sales may yet rebound - Microsoft seems to believe that, and it still maintains close ties to enterprises and consumers. But, increasingly, the PC seems be a legacy device of interest to a slowly declining number of users.

The 2002 movie Minority Report committed one unforgivable sin: it made UI designers want to design interfaces like Minority Report. 

The most recent example of this is the SpaceTop 3D desktop, which MIT grad student and former Microsoft intern Jinha Lee unveiled at the TED show this week in Long Beach. The user interface, which probably falls under the umbrella of beautiful, though unnecessary technology, uses a series of cameras and projected images to create a "true" three-dimensional display: users put their hands "into" their computer monitor and "grab" files and other documents, moving them around. Gestures can be used for more complex actions, essentially serving as macros. (See a video of Lee's desktop below.)

An awesome use of technology? Undeniably. Impractical? In a normal computer environment, almost certainly. And the fatal flaw? The keyboard.

Touch: Either Superfluous Or Arbitrary

For the last few days, I've continued to use the Chromebook Pixel, Google's marvelous yet massively overpriced Chromebook. It's clear what Google has done here: create a so-called "aspirational" Nexus-style device that ChromeOS developers will want to own, as well as develop for. But one of the routes that Google has chosen has included touch, a technology that adds an additional element of cost to its "Companion PC."

At this point in its development cycle, there is absolutely no reason that the Pixel should have included a touchscreen. Everything you would want to do via touch – moving windows around, repositioning the cursor, switching tabs – can be done as quickly and with more precision using the touchpad or a connected mouse. As I've noted before, touch-enabled apps like Microsoft's Contre Jour or the new ExploreTouch.ie site (which requires Windows 8, so they won't work on the Pixel) provide the best showcase of touch-enabled apps on the Web. Google has done nothing to enable them. (Is there a potential partnership here?)

What the Pixel has done, in my mind, is brilliantly demonstrate just how arbitrary Windows 8's emphasis on touch actually is. Touch redefined how Microsoft should lay out its user interface – pack the elements of the screen closely together, and fat-fingered users would become frustrated trying to distinguish between them. Instead, everything needs to be spaced out, which has the unfortunate side effect of increasing unused space.

(This isn't necessarily a bad thing. I've accidentally closed tabs in Chrome because I mistakenly clicked the "X" to close them, rather than "grabbing" the title to shift them around.)

And there's the cost. As Microsoft's Tami Reller noted, the industry was caught short by the demand for touchscreen notebooks, which – and I'd agree with her – are the best way to experience Windows 8. But although prices are coming down, they're still premium devices, and cost a bit more. The true hidden cost of touch comes when you come home, sit down, at your desk, and realize that the lovely desktop monitor you invested in for Windows 7 has been rendered obsolete. Replacing it will cost about $300 more.

From an ergonomic standpoint, however, a touchscreen display is a mixed bag – at least when you're at a desk. To its credit, Microsoft designed Windows 8 so that touch feels natural; swiping left and right with a touchpad simply doesn't reproduce the experience. All-in-one PCs, which already implement touch, are perfect for Windows 8. 

Otherwise, a keyboard still remains the superlative form of input for a PC. Many of you can type 60 words per minute or more. Every time your fingers move from the keyboard, in one sense, it means lost productivity. Swipe. Type. Swipe, type. You get the idea. That's precisely whey I fell in love with Tobii, an excellent eye-tracking technology which replaces your mouse with your gaze, and so neatly integrates with the keyboard.

Shackled To The Keyboard

The problem is that that keyboard is a boat anchor that weighs down the true vision of Windows 8. 

At about 3:48 into Minority Report, we see the first vision of John Anderton's computer: a curved sheet of glass, which serves as an overlay over a video wall. Tom Cruise's character swipes through various video windows and data feeds while presenting the "evidence" to a judge and witness. No keyboard is present.

Instead, Anderton communicates by voice, asking the computer or his assistants for relevant information. The synergy fuses into a harmony of man and machine, embodied by the classical music Anderton uses as a backdrop.

Whether it be Windows 8 or something from Google, a true Minority Report future won't be enabled until we can replace the keyboard with true speech recognition. This isn't impossible, technically – but it may be so, culturally.

We know that both Apple's Siri and Android's own cloud-based speech recognition aren't perfect, but constantly improve. Google is also feverishly polishing Google Glass, trying to make voice commands and dictation part of the interface.

We also know that we're increasingly forced to work on top of one another. A purely speech-driven interface is problematic, both in the crowded environs of a trading floor, as well as the library-quiet culture of my previous employer's sales staff. As cubes shrink – and as employers like Yahoo require workers to collaborate on-site – the problem will worsen. And I can't even begin to imagine how you'd write software code via voice command.

The answer may be a further loss of privacy. In San Francisco, you can play a fun little game: is that person mentally deranged and talking to himself, or using Bluetooth? We're a bit more used to it on the street. Within the office, things tend to be a bit different.

The alternative, though, may push even further into science fiction: subvocalization, or embedding a sensor into your larynx to allow users to quietly issue commands and dictation. Research in that direction will have to anticipate a voice-enabled future, too – one that, unfortunately, I'm pretty sure I don't ever want to see.

Here's that video of Jinha Lee's transparent 3D desktop:

Lead image via leejinha.com

Dell Inc. confirmed Tuesday that it has agreed to a $24.4 billion deal that will take the company private, removing the second-largest PC company from the prying eyes of investors, analysts and regulators. But its partner Microsoft may provide at least a small window into the company's finances.

(See also: Michael Dell Goes To Hell.)

What The Deal Looks Like

Michael Dell and a collection of financial partners, including Silver Lake and MSD Capital, will buy up Dell's outstanding shares at $13.65 apiece, representing a 25% premium over Dell's closing price on Jan. 11., the day before the rumors of Dell going private surfaced. (A company like Dell that goes private must buy up all the company's outstanding shares, which means offering shareholders an incentive - a better price on their shares then they could otherwise get.)

The deal also includes a $2 billion loan from Microsoft, which is not a permanent investment. Terms of the loan were not disclosed. In addition, debt financing was provided by a number of Wall Street banks. Dell Inc. also said that a Special Committee in charge of the deal would be open to alternative proposals during a 45-day "go shop" period, although the person or group that proposed an alternative deal could be subject to termination fees of between $180 million to $450 million.

Michael Dell will retain his title as CEO and chairman, and will contribute his 14% stake in the company; which means that the company will buy up his shares, paying him a very large sum in return. Dell approached Silver Lake last August to take the company private, and the company formed a special committee at the time to evaluate its options.

What The Deal Means For Dell

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,"  Michael Dell said in a statement.

For Dell, going private means that the company can invest in new technologies and otherwise pursue risky strategies that shareholders could otherwise criticize. With the buyout, Dell Inc. answers to no one, save for the banks and Microsoft, who are funding the deal. It also gives Michael Dell himself an exit strategy, should he wish to step down or if the banks choose to replace him.

"We can deliver immediate value to stockholders, while we continue the execution of our long-term strategy and focus on delivering best-in-class solutions to our customers as a private enterprise," Dell added. "Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision. I am committed to this journey and I have put a substantial amount of my own capital at risk together with Silver Lake, a world-class investor with an outstanding reputation. We are committed to delivering an unmatched customer experience and excited to pursue the path ahead.”

Microsoft: A Window into Dell's Finances

It's possible, however, that Dell won't go completely private. For the period of time that Microsoft's loan is active, Microsoft's shareholders are going to want to know how its investment is doing. Microsoft accounts for its investments on its income statement, and could break out the Dell investment as a separate line item. That number won't offer much insight into how profitable the newly private Dell is, or what revenues it will have pulled in, but it will indicate whether Dell's business is going in a positive or negative direction. 

“Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private," Microsoft said in a statement. "Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.

“We're in an industry that is constantly evolving," the company added. "As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.”

So why Dell? Influence.

"Microsoft, with a $3 billion investment, would get a certain amount of control and influence over Dell," wrote Patrick Moorhead, a former corporate fellow with AMD and now principal of his own analyst firm, Moor Insights, in an email earlier this month. "Dell has pulled back from the PC business as of late and that is not good for Microsoft as its cash cow is Windows. An investment of this size could guarantee a longer term Windows customer."

Besides the consumer market, Microsoft could steer Dell toward being more focused on the Windows platform for the data center, rather than "trying to do everything for everybody," said David Johnson, analyst for Forrester Research, in an earlier interview with ReadWrite's Antone Gonsalves. In addition, Microsoft could get access to Dell's enterprise sales force and could provide a "converged infrastructure" that unifies the silicon, the hardware, the operating system platform and the management and operation tools.

The deal is expected to be completed by the end of the second quarter. Dell's future will become a bit more shadowed then, by its own choice.

An estimated 40 million Windows 8 licenses have been sold by Microsoft in the first month of sales, with an indeterminate number sold after that. But it is not clear how many of those licenses will show up in the enterprise vs. the consumer market  (or even whether those licenses represent actual user numbers). With a radical departure in interface and mission, Microsoft may have gone too far for the business world with Windows 8, forcing always-conservative enterprise IT shops to stick with Windows 7 (or even Windows XP).

How Windows 8 will fare in the enterprise depends on how you define enterprise computing. What defines the enterprise is rapidly changing, thanks to Bring Your Own Device (BYOD) and Corporate-Owned, Personally Enabled (COPE) policies that are expanding client devices beyond the worker's desktop machine to include tablets and smartphones.

Breaking down those segmenst, we can grade Windows 8 chances of enterprise success in 2013:

Traditional Desktop: C-

It's easy to point a finger and laugh at Microsoft for throwing such a radical departure into the market. With echoes of Microsoft's history of  Fear-Uncertainty and Doubt (FUD) campaigns warning that "it's too hard learn a new interface," many observers woudl find more than a little schadenfreude in watching Windows 8 crash and burn in the enterprise like Vista did.

The obvious issue is that enterprise IT - and enterprise workers - are still trying to wrap their heads around the interface formerly known as Metro. And trying to figure out how big their training budgets would have to be to re-train workers to use it. 

But it's not just a new interface. It's what that new interface represents. In an effort to make be more of a social platform, Windows 8 incorporates tiles and applets to connect users to news, social feeds and other info. IT managers, though, tend to read "social" as "distractions from work." 

So why not give Microsoft the failing grade it seems to deserve? One word: SharePoint. Specifically, the SharePoint 2013 collaboration platform, which will have more social tools built into it when released.

When most people look at Metro, they immediately see an interface geared for tablets and smartphones. And that's true. But Microsoft is not dumb - it had something else in mind with this desktop. Expect SharePoint to have hooks that help enterprise users run news feeds from SharePoint 2013 about document collaboration, company news and upcoming appointments. In that context, "social" could mean "getting more work done."

When you include SharePoint or some other enterprise content management system, Windows 8's desktop grade has to account for  potential for growth in this area. As social enterprise software grows, Windows 8 may be the best platform on which it will run.

Mobile Devices: B

According to Goldman Sachs, if you add up all of the consumer computing devices in the world, not just the PCs and laptops, but the phones and tablets too, Microsoft has just 20% of the world consumer market share - where it once dominated with 97%.

That's a crazy drop, very much attributable to the rise of Android and iOS devices, with some help from BlackBerry, Symbian and Bada along the way.

So why does Windows 8 earn a B in a sector where it is clearly yet not doing that well? This is about enterprise deployments, and when comparing Android vs. iOS vs. Windows 8 devices as part of a mobile strategy, enterprises are likely to give a lot of weight to Windows 8 machines.

The reason, of course, is application compatibility. As cool as iOS and Android devices are, there's still some work to be done to get these devices to talk to every enterprise service. It's getting better all the time, which supports Dan Rowinski's prediction about Apple in the enterprise. But right now, Windows 8's near-seamless compatibility with existing Windows applications is something that enterprise managers can't ignore.

Is compatibility alone enough? No.

Microsoft and other hardware vendors need to release a very hot and not-so-expensive device to make this all work. If enteprise users don't want to use Windows 8 devices, their compatability won't matter much The Surface looks cool enough to be that device, but the Windows RT version isn't fully compatible, and the Windows 8 Pro version is too expensive.

Remember, we're grading Windows 8's enterprise potential, not where it is today (that would be an incomplete, naturally). There are a lot of ifs involved in Windows 8 earning even this middling report card for 2013. If social enterprise takes off. If there's a really hot Windows 8 mobile device... But given the task facing Windows 8 in the business word, even the possibility of success is worth a lot.

Note: This lede for this article was updated to reflect a more accurate estimation of Windows 8 licenses sold.

The case for Windows 8 is a response to the Bring Your Own Device (BYOD) trend?

That's the take of Dell founder Michael Dell, who told customers and partners Wednesday that corporate interest for Windows 8 is, surprisingly, "quite high."

It's Dell's World

Michael Dell opened Dell World, its annual partner and customer showcase, by announcing a slew of service offerings, including support services aimed at PowerEdge server customers and a managed threat protection appliance. But Dell hasn't forgotten its roots as a PC supplier, and offered hearty support for Windows 8, including an 18-inch all-in-one PC whose screen apparently snaps out, like a tablet, to create a massive personal workstation.

Users and customers have already questioned the need for Windows 8, with some saying that they preferred Windows 7 - or even WIndows XP - over the new OS. And research firms IDC and NPD have followed suit, sharing numbers or anecdotes that indicate that Windows 8 support hasn't been as strong as predicted or hoped for.

But Michael Dell, who built his company on the back of the personal computer (and a well-managed supply chain), apparently feels differently.

The PC Ain't Dead Yet

"As I’ve said, we strongly believe that PCs are important. There are about a quarter billion PCs sold every year," Dell said Wednesday. "And the installed base of PCs is about a billion and a half. Overwhelmingly, PCs are how business gets done in the world today.

"And now with Windows 8, we’re on the cusp of the next revolution of Windows hardware and software, bringing together the laptop and the touch screen," Dell added. "And as you see here in Dell World and across the expo, we have a really compelling full line of touch-enabled products from our XPS 10 tablet, to the stunning XPS 27, with its quad HD display, 27-inch touch display, and every kind of imaginable product you can think of in between."

Dell also announced a new 18-inch all-in-one PC, presumably a variant of the One family, "where the screen just pops out, snaps out, just take it with you. and you’ve got a full, portable, 4.5-pound, workstation or entertainment center. You’ll have to wait a bit to see that, but you’ll think that’s very cool,” Dell said. "The possibilities are limitless, and as adoption accelerates for Windows 8, and for touch, it will give the billion and a half users of the installed base the reason to get a new PC," he added.

The argument Dell made - the consumer argument - has been well understood. But most observers believe enterprises will be slow to adopt Windows 8 - as they would be slow to adopt any new technology until it was proven, validated and supported. Even enterprises that showed off corporate applications running on Windows 8 at launch would normally be considered rather ambitious launch partners.

Windows 8: A BYOD Remedy?

But Dell pooh-poohed all that.

"And in the customer conversations that we’ve been having, the interest in Windows 8 is quite high, even with commercial customers, who would normally wait a few releases to adopt the new versions," Dell said. "What we’re seeing here is really an immediate need, because CIOs are worried about the ramifications of a BYOD world. With Windows 8 products... we’re pleased with the incredible experience that they expect, while you get the security and versatility and reliability that your enterprise really requires."

It's hard to say how the apparent interest in Windows 8 will translate into sales, with most analysts expecting it will take until mid-2013 before sales ramp up.

But if what Dell says is true, then CIOs are truly scared to death of BYOD devices. Windows 8 certainly has a consumerish look and feel, and those CIOs apparently hope that their workers will be happy to use a tablet that looks like a consumer device, but was designed to be managed by the corporate IT department.

The Problem You Can't Touch

But Windows 8 has another problem: Mainstream Windows 8 devices apparently aren't selling all that well. Bob O'Donnell, an analyst for IDC, reports that only the 10% or so of Windows 8 devices that are touch-enabled are selling well.

"Most touch screens for notebooks (basically, anything bigger than phones) are the LCD plus a separate panel bonded on," O'Donnell said in an email to ReadWrite. "The problem is, the yield rate for these panels is low, the capacity is relatively low, so bottom line, we think only about 15% of notebooks will have touch next year. Plus, they're expensive, which just adds to the problem."

That could be good news for Dell, which emphasized touch in its Windows 8-powered offerings. But is the corporate Windows 8 enthusiam Dell sees reflective of the general market, or just its own sales force's experience?

As I've said before, until Microsoft releases its Windows 8 sales numbers in January, we won't know for certain.

With billions of dollars of property damage already incurred from Sandy this week, it's a sure bet that there's going to be a lot of electronics included in that tally. If you're one of the unlucky owners of some gear that's been hit by water damage from the storm, don't despair yet. You may be able to get your stuff back online… but it takes serious effort and a lot of patience.

Power Down

This may seem a gimme, but it's very important that you turn off the power to your devices. If there's been water damage, it's not only dangerous to your device to send energy flowing across possibly compromised circuit boards and drives, but also potentially dangerous to yourself. Unplug everything that's plugged, even if you think there's no water damage to that specific device. If your home has a just a couple of inches of water on the floor, there could still be moisture gathering and condensing inside the case.

If your home is flooded, be very careful getting to the main circuit breaker panel. If there's any water near the box, wait for the power company to come out and kill the power from the outside. Saving your devices isn't worth electrocuting yourself.

For smaller devices, remove the battery if you can.

Regardless of the device, follow this one big rule: no matter how tempting it is to turn the device on to see if it's still working, do not do it. Just one power activation is enough to completely short out the device (if it's not already). Do not do turn on the device until you have tried all of the possible steps to get it dried out.

Wring It Out

First, move the device to somewhere dry. You'll need to do that, no matter what path you take to recover the device.

After making sure the more important aspects of your life are in order, there are two main ways to get your device fixed. If you're not insured and don't want to replace it or even if you are insured, you may need to recover files that are stored locally on the device.

First, you can contact a professional restoration service. Check your local listings and be sure they are qualified to handle electronics. Depending on the level of damage, you might also want to find a drive-restoration service that can specifically go in and dig out the files from a damaged hard drive.

If you think you can handle it, you can try to dry out the device yourself. I would not recommend this for sealed Apple laptops and desktops… your best bet is letting them get mostly dry and bringing them into an AppleCare specialist for final opening and cleaning.

If you have a damaged PC desktop computer, open the case and let it air out. The same for a laptop, though that may be trickier depending on the model. Drying alone won't be enough, because as water evaporates, it's going to leave behind residue from salts or whatever else was in the water. That residue is enough to damage your machine when you try to power it on again.

Obtain a commercial cleaning solvent designed for circuit work and gently brush out the innards of your machine using the solvent with a soft toothbrush (one you never plan to use again). Get a can of compressed air and use that to blow out water, debris and residue, too. This will take a lot of time, so be patient.

After you are as sure as you can be that everything is dried and cleaned, put the device back together, plug it in and power it on. If things work, great. Immediately back up the data on the device and either use it or replace it as you originally intended to do.

If the drying process was not successful, chances are something else went wrong - perhaps corrosion set in faster than you could recover the device. At this point, data recovery may be your best option. This is something that should be left to the pros, recommends John Christopher, a recovery engineer from DriveSavers.

"Do not attempt recovery of your data personally by using any type of diagnostic or repair tools. Doing so may cause further damage or permanent data loss," Christopher urged. "Remember, the first recovery attempt is the most successful. Play it safe and send hardware to a professional."

[Update]

One thing to be careful about in any disaster recovery situation is the skill set of the vendor you're using. Like roofers descending on a town after a big storm, already a number of recovery companies are starting to advertise their post-Sandy services. A discount is one thing, but watch out for the companies that are out to just make a fast buck. It's your data we're talking about.

Saving A Bricked Phone

If your phone has been dunked in the waters of the Atlantic Ocean that suddenly entered your front yard, or some similar mishap, a simpler solution may be at hand. First, don't turn the phone on. Not even once.

Open the case (if you can) and remove the battery. Then get a big plastic container full of raw rice, and completely bury your phone in it, sealing the lid of the container. Leave it there for a couple of days at least. The rice acts as a natural desiccant and pulls moisture naturally from the phone's innards. You may also want to blow compressed air into the phone's ports a bit during the process to help the process along.

Once you remove the phone from the rice, charge it and and see if it works. This method worked for me after a recent camping trip accident where Android met creek.

Preparing For The Next Time

Whether you escaped the fury of Sandy or not, it's critical to keep computing devices and their data backed up. Cloud services are a goodway to accomplish this, since on-site backups can become damaged in the same disaster that affects the device itself.

Ultimately you will have to decide the best recovery method for your particular situation, but if this week reminds us of anything, its the importance of being prepared. Disaster is never that far away.

Image courtesy of Shutterstock.

Today will be one of the most important days in Microsoft's nearly 40-year history. The company that ruled the PC era rolls out a long-awaited new version of its flagship operating system that could determine whether Microsoft can regain its standing in the computer industry and carve out a place for itself in the post-PC era.

Windows 8 is not just another OS update. It's a radical overhaul of the world's most widely-used operating system, with a new user interface that some people find sexy and forward-looking - and others find incredibly annoying.

This is a huge and risky bet. If Windows 8 succeeds, Microsoft will be seen as a daring leader and innovator. If it's a flop - well, after a decade of drifting and missing out on new markets, Microsoft can't really afford any more flops.

No wonder then that Microsoft is pulling out all the stops, with a splashy event in New York and a global ad blitz that will cover more than 40 countries at a cost of $1 billion, by some estimates.

You can watch a live stream of today's keynote at 11:15 EDT on the Microsoft website. And we'll be covering the event throughout the day here on ReadWrite.

Is This Vista 2.0?

I've used Windows 8, and liked it well enough, though I can't say it convinced me to switch away from my Mac. Then again, Mac users like me aren't Microsoft's target audience. 

The people Microsoft really needs to please are the millions of PC users in businesses and homes around the world. And that's the scary part, because Windows is really different from Windows 7 (much less the still widely used Windows XP), and the kind of people who use Windows are not usually the kind of people who enjoy change.

The biggest difference - and it's a huge one - is a colorful tile-based user interface that used to be called Metro but now, suddenly, at the last minute, is just called "the Windows 8 style." 

Some people are going to love it, but even more are going to find it baffling. The first time I looked at Windows 8 I could already hear the sound of thousands of frustrated Windows veterans leaning over their laptops, swiping at their screens and shouting. 

It's so different that Samsung has actually created a program that replicates the old Start button to make it more familiar to people. That's nice and all, but when you spend years designing a shiny new operating system, and your hardware partners start crafting workarounds to it before it even ships, well, that's not a good sign.

Many consumers will have no choice but to accept Windows 8 since new PCs will come with Windows 8 pre-loaded. The guys at Geek Squad must be drooling over this.

Big corporate customers are a different story. What CIO in his or her right mind would rush to roll out Windows 8 across thousands of people?  Gartner predicts 90% of enterprises will stay away from Windows 8 through 2015.

Corporate Customers

No doubt Microsoft will have some corporate customers on hand tomorrow, standing up on stage and talking about how excited they are that Microsoft is paying them to take arrows in the back to be early adopters of this bold new operating system that offers so many compelling new features.

Truth is, any company rolling out Windows 8 will have to endure all of the usual migration headaches - bugs, patches, glitches, apps breaking - but on top of that will get hit with a tidal wave of incoming support calls from baffled users asking, "Hey, where's the Start button?"

So in addition to the huge bill from Microsoft, you'll need to dish out millions more for training and extra tech support to move to Windows 8. Why bother, when Windows 7 works great?

Microsoft claims Windows 8 is super stable, thanks in part to the 16 million people who have been hammering away at the pre-release version for months now. Nevertheless, history tells us that the first version of any big Microsoft product is usually a nightmare. The rule of thumb has been that Microsoft needs three cranks of the wheel to work out the kinks. 

In the case of Vista and Windows 7, they got it right on the second try, and that, for Microsoft, was almost a miracle. 

So let's imagine Windows 8 ends up having some issues but that Windows 9 gets everything straightened out. Based on the tempo of past releases -- Vista in January 2007, Windows 7 in July 2009, Windows 8 in October 2012 -- we might not see Windows 9 until 2015.

Can Microsoft hang on that long? Certainly. This is a wildly profitable company doing $80 billion a year in revenues. Microsoft isn't going away anytime soon.

What Really Matters Is Mobile

The real question is whether it can remain relevant. Yes, Microsoft dominates the PC market, but (a) PCs don't matter anymore and (b) even in that market Apple has been gaining share in recent years. 

In mobile, the only market that really matters, Apple and Google dominate and Microsoft is so far behind as to be almost negligible.

One product that's supposed to turn that around is the new Surface device that Microsoft is also showing off today. It's a kind of tablet-laptop hybrid that runs a different version of Windows 8 called Windows RT. Unfortunately it has been getting pretty tepid reviews, with consensus being that the software is still half-baked.

The same complaint was made about Windows Phone 7, the last version of Microsoft's smartphone operating system. Windows Phone 8 will be better, but, sad to say, it's not generating a lot of excitement either.

Not so very long ago Microsoft was so powerful and so dominant that everyone in the industry lived in fear of the team from Redmond. Over the past 10 years it has fallen so far, so fast, that you almost feel bad for the people working there. Today is the day when they can start to turn things around. Stay tuned.