Microsoft just announced the formal preview of the successor to Windows 8, which is rumored to be named Windows Blue. Blue will be unveiled at the Microsoft BUILD developers conference in June 2013. Rumor has it that Microsoft will release Blue to the public in 2013, just 1 year after shipping Windows 8. This stands in stark contrast to the 3 year release cadence for the preceding 2 iterations of Windows.
Why is Microsoft transitioning from a 3 year OS cadence to 1 year? And why is this transition happening now? Why didn't it happen years ago?
A 1 year OS cadence will substantially reduce competitive risk to its cash cow Windows and Office monopolies. The greatest threat Microsoft faces is the cost of being wrong. Microsoft's old OS cadence was 3 years. If Microsoft's OS is wrong for any significant reason, competitors will have at least 3 years to gain ground against Microsoft. In fact, this could be closer to 5 years depending on when the competitor's product is released relative to Microsoft's OS release cycle. Given the timelines required to plan, develop, test, release, and support an OS, Microsoft can easily fall into a position where it cannot release a competitive OS until 5 years after its competitors.
When and how did Microsoft realize this? Microsoft learned this lesson the hard way in the mobile computing market. They were wrong about the iPhone, and the cost of being wrong has astronomically large. Additionally, the cost of being wrong has also created opportunities for Microsoft's chief rivals - Apple and Google - to chip away at Microsoft's core businesses - Windows and Office. In order to stay competitive, Microsoft needs to keep its planning and development cycles lean enough so that even if it's wrong, it can quickly catch up. Windows Phone was released in October 2010, 3.5 years after Apple released the original iPhone in June 2007. However, Windows Phone didn't reach feature parity with iOs and Android until 2012, 5 years after the iPhone was released.
Apple has adopted a similar OS cadence. iOs has been on annual cadence since launch, and Apple has stated that they're transitioning OSX to an annual cadence as well. Google updates Chrome every 6 weeks, and has been upgrading Android 2-3 per year. Google has said they plan to slow Android releases to 1-2 times per year as the OS matures.
It would appear that all of the major tech giants are afraid of begin wrong.