With Windows 8's much ballyhooed launch barely a month behind us, alleged details of Microsofts next next-generation operating system have already begun swirling around the Net. And if those whispered rumors prove accurate, Windows Blue—as the rumored OS has been dubbed—will continue the seismic sea changes started in Windows 8.

Blue would introduce a standardized software base shared between Windows proper and Windows Phone, and also move toward cheaper, yearly software updates.

Is the rumor true? We won't know for sure until the middle of next year, when Windows Blue will allegedly be released. We can, however, examine the deeper implications of each aspect of the Windows Blue rumors—as well as whether the very existence of these rumors could hurt Windows 8's success in the short run.

More frequent releases mean lower prices

It's uncertain whether Windows Blue could be a service pack, a feature pack or something else altogether, but both ZDNet and The Verge report that it will be the kick-off of a new yearly release schedule for Microsoft's operating system—similar to the cheap, annual releases favored by Apple. After Blue, the "big bang" Windows launches of the past will go the way of the dodo.

Yearly updates would translate into cheaper updates for consumers. Apple charges between $20 and $25 for its annual OS X release, and The Verge reports that Microsoft may give away Windows Blue a low cost or possibly no cost to encourage mass adoption to the operating system. Of course, if Windows Blue does in fact introduce a merged or standardized SDK across Windows Phones, tablets and desktops, Microsoft has a vested interest in pushing the release to as many Windows 8 users as possible, and follow-up releases should likely sport a low sticker price as well.

More frequent releases should reduce Windows' typical $100-plus price tag.

"I think we witnessed a new mode of aggressive upgrade pricing this year with Windows 8, and Microsoft could well try that tactic again, really dropping in an incentive for frequent upgraders to do so," says Wes Miller, an analyst at Directions on Microsoft, an independent analytical organization focused on the Redmond company. "If (Windows Blue) is the full-fare cost of Windows, even for Windows 8 users, I can’t imagine that going over too well."

Rob Enderle, president and principal analyst at the Enderle Group, thinks users won't mind paying for annual Windows releases—if they're done right. "The Windows 8 update seemed to do well at $40 per download, so I think the market will take to this just fine if the updates provide solid benefits," he says.

Don't think you'll score a cheap upgrade if you decide to wait for Windows Blue's release, however. According to The Verge, you'll need to have a legitimate version of Windows installed on your PC to download a working version of Windows Blue.

More frequent releases mean more frequent features

Moving to a more rapid release schedule could also reap dividends for Microsoft on the innovation front, giving the company an opportunity to release new features on a far more frequent basis than with the traditional three(ish)-year Windows cycle. Three years is three lifetimes in the technology world.

To put Microsoft current release cycle in perspective, consider that the original iPad hadn't even seen the light of day when Windows 7 launched.

Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, says that the massive gap between Windows releases has led to the company being "perpetually behind as a thought leader," with each new Windows iteration playing catch-up with the competition rather than introducing truly forward-thinking features like Siri or Google Now. Yearly upgrades could level the playing field for Microsoft.

"I don't think there's any doubt the right thing for Microsoft to do is accelerate the pace of desktop updates," Moorhead says.

The uproar over Windows 8's drastic design change points to another potential benefit of switching to yearly updates: More frequent updates mean less radical updates, which in turn means fewer changes for users to become acclimated to. "Nowadays, nobody does radical, big-bang departures like Windows 8," NPD Group analyst Stephen Baker told PCWorld when the Windows Blue news first broke. "The reason you do a lot of small upgrades is to give people more time to adjust to changes."

While the analysts we spoke to said that moving to an annual release schedule is a good idea for Microsoft—"They should have done this years ago," says Enderle—they expressed varying levels of confidence in Microsoft's ability to actually pull off the transition successfully.

"I am skeptical Microsoft can fundamentally accelerate innovation, because they are not wired to do that," Moorhead told us. "Microsoft is a commercial company first and a consumer company second, and commercial interests move much slower than consumer innovation."

"In many ways, Microsoft's hand is being forced, as Apple has really emphasized this idea of annual releases for first their mobile, and now their desktop, OS," says Miller. "These changes have to be carefully considered, though – as even Apple makes these releases more iterative, and less 'revolutionary,' where we are used to the opposite from Microsoft; consider the changes between Windows 2000, XP, Vista, 7, and 8."

On the plus side, frequent and incremental changes could make new Windows releases more palatable to the notoriously gun shy enterprise crowd. Big companies are very hesitant to make major changes. Many only recently switched to Windows 7 recently, many more still utilize Windows XP, and very few I.T. managers have plans to implement Windows 8 anytime soon.

Windows Blue: A boon or bane for developers?

Image: Microsoft.com A Windows developer event in Asia.

Since Microsoft maintains tight control over its core ecosystem, moving to more frequent OS updates shouldn't cause the same fragmentation woes that plague the overall Android experience. In fact, reports (however murky) say that Windows Blue will introduce an SDK that either merges or standardizes software development for Windows desktop and Windows Phone 8. All current-gen Windows devices already share a common kernel core to streamline cross-platform development. Theoretically, the Windows Blue SDK will bind Windows Phones, tablet and PCs even more tightly together, and the rumors say modern-style Windows 8 apps will continue to work just fine on Windows Blue.

"I think it is crucially important that Microsoft aligns the SDKs and platforms for Windows Phone and Windows," Miller says. "I think the dissonance between the Windows Phone 7, Windows Phone 8, and Windows RT platforms aren’t helping developers to make great apps. Unification, or at least closer alignment, could really help build a stronger application story and make it easier for developers." Enderle echoes the sentiment.

In theory, introducing a standardized SDK should make it easier to create a Modern-style app that translates easily across the various hardware form factors Windows supports. That could potentially be a major boon for Microsoft, which has had trouble swaying developers to the Windows Store and the Windows Phone Store. Both app marketplaces offer far, far, far fewer apps than iOS or Android.

The analysts warn that Microsoft will need to tread the introduction of a new SDK very carefully, however.

Windows Blue's SDK could streamline cross-platform development.

"I don’t think developers are ever fans of big shifts in their platform—but so much of it depends on how much the APIs underneath forcibly change, and how much the tools help them navigate or migrate through those changes," Miller continues.

"If Microsoft keeps the SDK stocked with similar languages, it shouldn't cause too much ire," Moorhead says. However, he cautions that the possible specter of yet another new SDK looming so shortly after the release of the Windows 8 SDK could convince hesitant developers to sit on the sidelines until more details emerge—especially since Microsoft will allegedly stop accepting apps programmed for Windows 8 alone when it releases Windows Blue's SDK.

The last thing Microsoft needs is another excuse for developers to take a "wait and see" approach, which would be killer given the Windows Store's woeful app situation. Windows 8 needs more apps, and Windows 8 needs big-name apps, and Microsoft needs those apps to appear long before the summer of 2013 if it wants Windows 8 to be successful.

A negativity-tinged thread about Windows Blue's possible SDK changes has already popped up on Microsoft's TechNet forums.

Sacre blue!

Before you get too excited about Windows Blue (or depressed, if you're a developer who was about to get started on a Windows 8 app), Rob Enderle brings up another important consideration. "The question is, is Windows Blue pre- or post-Sinofsky?" he asks. "A lot of this stuff is in flux given his sudden departure."

Windows Blue may or may not be real, but the ideas behind the alleged upgrade hold some real potential for Microsoft's future—if the company plays its cards right. The folks in Redmond need to prove they have the institutional flexibility to implement worthwhile yearly changes, and more importantly, Microsoft absolutely, positively, utterly, indubitably must implement any new SDK changes in such a way that doesn't alienate developers.

If Microsoft can manage that, and if the Windows Blue rumors prove true, a ubiquitous cross-platform SDK combined with yearly OS releases could just be the shot in the arm Microsoft needs to finally gain a foothold in the vaunted mobile market.

If the rumors are true, however, it's also another sign that Microsoft won't be turning away from the divisive modern UI, no matter how much desktop enthusiasts bemoan the finger-focused interface. Deepened ties between Windows 8 and Windows Phone no doubt rely on Live Tiles being universal.