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12/19/2011
01:46 PM
Paul McDougall
Paul McDougall
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Microsoft's Dumbest And Smartest Moves Of 2011

The past year was one of highs and lows for the world’s biggest software company. Here are seven reasons why.

Microsoft's struggle to adapt to a computing market in which the PC is taking a back seat to tablets and smartphones is well known, and much of the company's troubles of late have arisen directly from that market shift. But don't count Redmond out just yet--it had some solid wins in 2011. There were also a number of clunkers. Here's a look at 7 of Microsoft's dumbest and smartest moves of the past year.

1. Skype buy (Smart). Microsoft announced in May that it had reached a deal to acquire Skype for $8.5 billion. Why was that smart? Skype's VoiP tools and services will add simple, widely-used video chat features to a whole host of Microsoft's products, including Office and Office 365, Windows Phone, and Xbox, and, in the future, Windows 8 tablets. That could give Microsoft a leg up on rivals like Google and Apple that, going forward, might even have to pay Redmond for the right to use Skype on some of their platforms.

2. Still no tablets (Dumb). If the current holiday shopping season has proven anything, it's that 2011 is the year of the tablet. Market data shows that the hottest gifts under the tree this year will be touch-powered slates from the likes of Apple, Android OEMs, and Amazon and its Kindle Fire. As for Microsoft? It's still talking about tablets in the future tense. The company's tablet strategy is closely linked to the touch-friendly Windows 8, which may not see daylight until late next year or even until 2013. By then it may be too late to the party.

3. Kinect for Windows (Smart). With PCs taking a backseat to tablets and smartphones, Microsoft needs to find a way to reinvigorate its core Windows franchise. It may have just the thing in tools that will allow developers to port Kinect apps from the Xbox to the PC. Kinect on Windows machines promises a number of new applications, from entertainment to manufacturing to healthcare. Some developers at the University of Washington are already using the technology to create systems that will allow physicians to operate miniaturized surgical equipment through hand gestures.

4. Killed Zune (Smart and Dumb). Microsoft officially put its long suffering Zune franchise out of its misery in October. That was smart because Zune had become an also ran in the MP3 music player category, and as a brand did not fit with Microsoft's new mobile strategy, which is based around Windows Phone 7. The dumb part? That it took so long--Zune has been on life support for years and should have been scrapped long ago.

5. Office 365 launch (Smart). With cities like Los Angeles and Washington, D.C. moving their desktops to Google Apps, Microsoft needed to respond to its rival's cloud-based offerings. It did so with Office 365, which launched in June. Office 365 features cloud-based versions of familiar Microsoft productivity and communications tools. It includes access to Office Professional Plus, Exchange Online, SharePoint Online, Lync Online, and Office Web Apps.

Plans start at $6 per user, per month, making the offering competitive with Google's Google Apps service, which includes online email, productivity apps, and calendaring starting at $5 per user, per month. Key Office 365 customer wins to date include Hendrick Automotive Group.

6. Billions To Nokia (Dumb). Microsoft and Nokia earlier this year struck a deal under which the Finnish handset maker will ditch Symbian and use Windows Phone as the default OS on virtually all its mobile devices. On the surface, it's a good deal for Microsoft, given that Nokia still ships more phones worldwide than any other manufacturer. But it turns out that Microsoft will actually pay Nokia billions of dollars to use Windows Phone. Don't OEMs usually pay for the right to use software, not the other way around?

7. SUSE Linux deal (Smart). Microsoft in July announced that it would extend an agreement under which it purchases "certificates" for SUSE Linux support and services and resells them at a markup to Windows customers that operate in hybrid environments. Microsoft, which claims Linux violates its patents, also pledges not to sue certificate holders for infringement. The arrangement allows the company to profit from its claims on Linux without angering customers.

Any other Microsoft moves, dumb or smart, that caught your eye this past year? Post a comment or drop me a line.

According to our Outlook 2012 Survey, IT should expect soaring demand but cautious hiring as companies use technology to try to get closer to customers. Also in the new, all-digital issue of InformationWeek: Inside Windows Server 8. (Free registration required.)

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ThePrisoner6
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ThePrisoner6,
User Rank: Apprentice
12/27/2011 | 4:11:10 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
Far be it from me to rush to Microsoft's defense, yet in truth only fictional companies maintain a 1,000 batting average. Even Apple has had some hiccups this year (and every year), even though they have, on balance, done extremely well with their many product offerings. Microsoft's alliance with Nokia was forged out of an immediate need to find long-term supporters of the Windows 7 Phone OS, when there were few takers elsewhere. Nokia was a fitting partner, but it had to be worth their while to drop their existing product pipeline and retool. If that was a "dumb" move on Microsoft's part, then I would question what the "smart" move would have been.

Even with Nokia's Lumia phones now reaching the market, WP7 has an uphill battle against iOS and Android, but I see it only as a precursor to Windows 8. To be sure, the future is unknown, and anything can happen. Even more exciting times are ahead.
John doe
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John doe,
User Rank: Apprentice
12/27/2011 | 4:30:13 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
Just want to add the reason for no tablet is that they are waiting for there Windows Phone to take off. But with recent Gartner numbers at 1.5% market share I'm afraid this wont happen anytime soon if ever.
frankshifreen
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frankshifreen,
User Rank: Apprentice
12/27/2011 | 4:33:14 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
I hate Microsoft. Their culture is one of arrogance, power-plays, poor performance and squeezing the customers, suppliers, as much as they can. They started that way and have not changed. Windows is still on top, but there has been a shift. They know it too. Microsoft is on the defensive now, and their era will be soon over. People are moving away from them because of the bad taste of dealing with the company, as well as their products. In response the poster below- The Vista debacle is an example of Microsoft trying to steamroll, lie to, obfuscate- do everything except forthrightly apologize, improve the product and move on. Their customer service is the worst of any company in the field, and I for one will celebrate, when other competitors move up and take their place in all areas.
Tom Mariner
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Tom Mariner,
User Rank: Strategist
12/27/2011 | 4:37:39 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
The whole tablet thing points up a generic problem -- too slow. In tech land, a year to come out with a new product is about right, 18 months is risking your market. Windows 8 / Touch technology will be three years if it makes what it considers an aggressive commercialization schedule. The iPhone, which cemented touch and gesturing to even the toughest critic, was more than four years ago! How much arrogance does it take to not understand a sea change when it is in your face?

Microsoft has billions of R&D dollars -- a tiny fraction of that in the right hands in Redmond would have put them equal with the pack. Instead, their internecine battles over turf cost them hundreds of billions and an entire market -- how could mighty Microsoft utterly lose to an implementation of Linux by a browser company (Android)? OK, they get the cloud is somehow important, that HTML5 / JavaScript has a future to VS, but that mobile OS boo boo had better be a gigantic wake-up call. Maybe a giant tech company needs a certifiably crazy techie as head dictator rather than a great salesman.
goldcode
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goldcode,
User Rank: Apprentice
12/27/2011 | 5:26:32 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
Dropping the ball on Silverlight seems dumb to me. At the very least, MSFT has failed to be clear about the future of Silverlight. Will SL live on only in Windows Phone? Or is its path forward mainly relegated to Metro's XAML dev flavor? Or (as many cogniscenti claim) has MSFT shuffled SL onto its oft-used dark conveyer belt to oblivion?

Bottom line: developers who were seduced by the Silverlight vision pushed by MSFT now find themselves with many questions and no clear answers. The really dumb part is that SL has been a major success and had potential to be the biggest advantage of Windows-based tablets.
kerMingle
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kerMingle,
User Rank: Apprentice
12/27/2011 | 8:15:34 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
Microsoft didn't release a tablet (Smart!!).

I have to say that I am happy Microsoft is shaping up. As a person who has been disappointed with MS mobile products in the past ... I think it is good that they are finally waiting until they have a really GOOD product before just rushing something to market. I think that windows mobile/PocketPC versions 1 .. 6 were a complete waste of time. If they aren't going to put out a killer tablet ... then don't put out a tablet at all. All it does is hurt their already wounded branding.

With that being said. WP mango is the best mobile OS to date. It took them a while but they finally got it!!! Good job Microsoft!!. Take your time and do it right for the tablet as well!!!!
kerMingle
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kerMingle,
User Rank: Apprentice
12/27/2011 | 8:27:30 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
The Vista debacle is a case in point as to why I think it is good for MS to hold off on a tablet until they actually get it right. As for someone who has already used the Windows 8, it's lighter and faster than 7 and it will be able to run on mobile devices.

I don't think Microsoft is on the defensive. The last 8 years or so they have been working on their backend technologies. They are miles ahead of anyone else on this. The synergy at Microsoft is turning into a powerful force and the coupling of XBox, windows 8, and windows 7.5 mobile are going to be hard to compete with.
kerMingle
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kerMingle,
User Rank: Apprentice
12/27/2011 | 8:33:16 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
I think it is quite clear that Silverlight will be in Microsoft's eye for as long as the Market is still interested in it and it can compete with javascript. I know silverlight is a superior product but so many more people know javascript ... getting a few silverlight developers to jump on the javascript bandwagon is allot less expensive than getting the entire web to jump onto silverlight. They HAD to cater to the javascript crowd or face alienating them. But I think as long as their are people out there that prefer a superior product, you will always find silverlight out there.
kerMingle
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kerMingle,
User Rank: Apprentice
12/27/2011 | 8:38:35 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
Like the comment about the great salesman and internal turf battles. However, I think that XBox is really showing up the other divisions and making shareholders really question what's going on in the rest of MS.
MJONES000
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MJONES000,
User Rank: Apprentice
12/27/2011 | 10:00:53 PM
re: Microsoft's Dumbest And Smartest Moves Of 2011
I would agree with most of the points, except for #'s 2 and 6.

2. Still no tablets
MSFT has apparently learned from various past, huge mistakes it made in entering new markets. In the phone arena, it's pushing not only an OS over which it has control (as it did with the previous Windows phone failure), but it's also pushing a new user interface (Metro), which is not only well suited to portable devices but also has the advantage of being both distinctively different and in some cases is a simpler, more consistent, and easier UX than its competitors. That being said, MSFT is leveraging its growing experience with Metro, along with its solid Windows base, to have an OS/UX combination for tablets that has the potential to be broadly competitive. And let's not forget the huge reservoir of Microsoft-experienced developers out there who will follow the path of least resistance when selecting an OS platform and development tools for portable apps, which is the MSFT set. All of these factors say that Microsoft is right to wait, especially since the tablet market is still very, very young, relatively speaking.

6. Billions To Nokia
Neither this nor the linked article established any facts that show Microsoft is outright paying billions to Nokia in their OEM arrangement. The facts of the linked article even more strongly suggest otherwise. Regardless, Nokia's world presence and support structure is not to be sneezed at, to say the least. Microsoft has executed a coup in their deal with Nokia, which I believe gives them a leg up in both the emerging smartphone market and in the tablet market as well.
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