windowsphone-apps-5The Windows mobile operating system still pales in comparison to iOS and Android when you look at overall market share. But one Seattle VC still believes Microsoft will become a viable third OS within three years.

Speaking at a WTIA TechNW event last week, Tom Huseby shared some thoughts on the possibility of a third operating system to compete with the other two giants.

Huseby, a former wireless exec now affiliated with three venture capital firms — including the mega-fund Oak Investment Partners and the Seattle early-stage investor Voyager Capital — said that it will take Microsoft three years to get Windows at a 10 percent market share in the mobile OS space. Currently, Windows only has about three percent.

Tom Huseby. Photo via Voyager Capital.
Tom Huseby. Photo via Voyager Capital.

Former Qpass exec and current Zettics CEO Sterling Wilson didn’t quite agree with Huseby. Though he’d “love to see a third or fourth OS,” Wilson thinks iOS and Android have too much momentum.

“I hate to be fatalistic but I think iOS and Android are it,” he said. “Microsoft has not done well with its Windows product. … I don’t know how you get a [third OS] when you already have 95 percent of the market covered. I’m not sure how that happens in the near-term unless someone comes up with a new idea that just wow’s everyone.”

Wilson did note, however, that the providers like AT&T and Verizon would love to see another OS because “having to deal with Apple every day is a pain in the ass.”

osmarketshare1“That’s why there will be a third,” Huseby responded.

Huseby added that Microsoft needs to “do more for the development community than they do right now.”

“They have a tremendous economic base to push off and they need to spend a lot of that on the developer community,” he said. “There are standard apps that don’t run on Windows Phones and they have to fix that. They were great with the developer community on Windows; I don’t know why they haven’t used the same expertise to go after the phone business.”

In the end, Huseby said it won’t really be about the operating systems or phones. He believes all apps and services will eventually run over an Internet-Protocol homogeneously connected network.

“There’s a lot of stuff out there that won’t care [about the OS], because it will be HTML5, a web protocol that rides on top of any OS,” Huseby said. “And the OS that isn’t compatible with an app is the one that suffers, not the app.”

The conversation starts at 23:00 in the video below.

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  • Kip Kniskern –

    One big difference between traditional PC share and phones is the high turnover rate. If it weren’t for 2 yr contracts, we all might be getting a new phone every year, and 2 yrs out our phone seems awfully dated. Sure, there’s feature lock-in, etc., but phone users don’t and won’t hold on to their devices like they do with, for example, XP. Even with 95% coverage, there’s going to be a lot of churn.
    Now that doesn’t mean that ppl will jump to Windows Phone (unless the phones are well better), but it isn’t quite the same battle.

  • CuriousOffice

    He is right that mobile web (HTML5 etc) is the future in the long term but Microsoft hasn’t shown leadership on the browser side of things as anyone who deals with IE in the web development space well knows. IE will trail Chrome and Safari usage on phones. Microsoft won’t be able to leverage mobile web to their benefit unless something new and significant happened in terms of their ability to get more developer mindshare around IE.

  • Matthew Reynolds

    People are locked in because of the apps and data that they have on their phone. I’ve gotten used to my apps (facebook, linkedin, tripit, pandora). Even if they’re available on another phone, I have to re-login, possibly populate new data, and migrate over to the new system. This is a high barrier to switching. It would be extremely difficult for a manufacturer/software provider to create features that would compel me to switch systems.

  • Derek

    I think the 10% estimate is realistic, not too farfetched. True that Android and iOS have a huge head start as well. But as for me, the reason I switched to WP OS is because I thought Android and iOS were too clunky, and I realized it as soon as I actually stopped bashing WP and tried it for myself. It’s great, and I still get the apps I want or some viable form of them on its OS. People just need the opportunity to try it out! I think there is definitely potential to steal others from the Android & iOS demographic as well. Also hope MS keeps Nokia on the direction of offering more superb camera phones as well, that’s a plus and a unique identifier for its handsets.

  • MikeK

    Microsoft needs to cut some form of deal with Samsung. The Nokia purchase makes that tougher. Otherwise the third OS will be from Samsung, who is as tired of dealing with Google as AT&T is of dealing with Apple.

  • Ron Faith

    Tom is great and usually right. I wouldn’t bet against his predictions. Microsoft + Nokia have plenty of resources and paths to get to #3 (especially given the current path that Blackberry is on).

  • Mike_Acker

    msft/windows is un-acceptable and will be marginalized within 3 years.

  • jepping

    I agree with Huseby, and I don’t even work for MS. But I think many other VCs, judging from others I’ve talked with, are often ignorant of international concerns or, in this case, market penetration and progress Windows Phone has made. It only has less than 4 or 5% in North America, anemic in China and Japan. But it is at 10% in UK, same in Germany, even more in Russia and Mexico where it exceeds iOS, and in most markets it is slowly growing. These are major markets, and as they get bigger, more developers will support it, making it a stronger third platform.

    That being said, as a WP user, I am very frustrated with the SLOW progress MS makes on making the platform better, never mind the lack of certain apps (it’s app coverage is fairly good, contrary to conventional wisdom). Yes, they started late, but they need to iterate at Google’s speed and then be even faster.

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