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Yeah, this looks to be the most probable course of action to me, and the doom and gloom that is raining down from the rafters seems a little premature.

In the same way that Vista was a disaster due to its changes and incompatibilities, Windows 8 is a version 1. And in the same way that, by the time Windows 7 had come out, the industry had adapted, new drivers had been written, C# was a standard, etc, etc, when Windows 9 comes out 2-3 years from now RT apps will be widespread, Windows tablet hardware will be a couple of generations refined, and Office will probably work with Metro.

And there will be glowing reviews talking about what an achievement Windows 9 is, how it is the best OS Microsoft has released in years, and how it completely wipes out the colossal disappointment that was Windows 8, ignoring of course that Windows 8 like Vista before it provided the foundation upon which the new system is built.

Will Microsoft be around forever? Who knows, but a company this large, only a few years removed from the success that was Windows 7, is going to get at least a few more kicks at the can.

The question is: by the time they get version 2 out, will the rest of the industry have moved on?

If they miss an inflection point, they could be in deep trouble.

If Windows 8 flops the most likely outcome will be people just staying on whatever version of Windows they have now. That's pretty much what happened when Vista flopped. And honestly, seeing as how Windows 7 only overtook XP in terms of popularity around September of this year (despite being a hit), there seems to be no real rush in the industry for OS upgrades to begin with.

Let's say it takes them another 2 years to release the "good" version. What happens if over the next 18 months more and more people learn they don't need full computers and happily adopt iPads and Android?

At that point their sales are declining as people move off desktops, and they face the much higher bar of having to convince people not only to buy computers with their new OS but drop their investment in other platforms (such as apps purchased).

At some point they won't be able to count on their market still being there by the time they have an OS people want.

I see, I was primarily commenting on their situation in the PC world. Things get a bit blurry depending on whether you look at tablets and PCs as being in one market or two, and a bit more so when thinking about which category to place some of the hybrid Windows 8 devices into.

So to clarify, my opinion is that they're probably pretty safe as far as maintaining their position in the PC world even if Windows 8 bombs as a PC OS. Losing entrance into the tablet world for two extra years on the other hand is a lot worse since it would be very difficult to get those two years worth of tablet buyers to switch to their platform after having already bought into another during that time.

How the second part actually plays out in the real world is really hard to predict since a lot of it will be based on the hardware that runs the OS. For example, I personally think Windows 8 is a pretty poor Desktop OS, but I'd definitely consider it when buying a tablet. So my problem isn't so much the OS but their current flagship device; the Surface RT looks to have too many deal breakers for me and I don't think I have a need for the Pro version.

also: people will have come to terms with the new UI, and touchscreens will be standard on laptops

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