Software // Enterprise Applications
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4/7/2014
11:06 AM
Michael Endler
Michael Endler
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Does Microsoft Have Its Mojo Back?

Will free Windows licenses, the Internet of Things, Cortana, and other announcements put Microsoft back on the right track?

Has Microsoft regained its mojo?

When new CEO Satya Nadella introduced Office apps for iPads on March 27, it was his first public appearance after 52 days on the job. Commentators praised Microsoft's firm, arguably overdue embrace of cross-platform tactics. But by his 60th day, Nadella had gone much further, repositioning Azure as the clear center of the Microsoft universe, with Windows shifted to a supporting role.

Between the Wednesday and Thursday keynotes at Microsoft's Build conference, company execs spoke for more than six hours. At face value, the presentations fleshed out Nadella's "cloud-first, mobile-first" strategy -- from Cortana and other attempts to become relevant in mobile, to dozens of new Azure tools aimed at developers of all stripes, including those who develop for iOS and Android but not Windows.

But, on a deeper level, the keynotes also explored the diminution of Windows licenses as a revenue source and their replacement by software, services, and virtual infrastructure. These are not minor shifts, but they are necessary. Among mainstream users, Windows' stature isn't what it used to be.

Microsoft CEO Satya Nadella
Microsoft CEO Satya Nadella

[Wondering about your best option to replace WinXP? See Windows XP Game Over: 9 Upgrade Options.]

Under Nadella, Microsoft has implemented the changes while somehow projecting both confidence about its future and candor about its challenges -- a tricky balance. Given this context, yes, Microsoft has its mojo back.

But can Microsoft reclaim its former glory? Steve Ballmer's Windows 8 strategies created media scorn, investor derision, and relatively few happy customers. Nadella didn't create this mess, but he's inherited it. His ideas are comparatively fresh and different, but they don't make existing dilemmas disappear, at least not overnight. For starters, last we heard, Surface tablets still aren't profitable. Windows XP users, who will lose official support Tuesday, also outnumber Win 8 users by more than two to one, according to Net Applications.

But I'll come back to all that. Nadella didn't control the hand he was dealt, but he did control the agenda at Build -- and he made the most of the opportunity. Here are some of the ways Microsoft impressed.

1. Free Windows licenses for smartphones and tablets with smaller screens.
Arguably a long time coming, this move could help Microsoft tap into the vast network of global manufacturers who have pushed Android to prominence. It should also result in lower device prices. Most important, it indicates Microsoft sees more growth potential in its apps and online services than in Windows itself. In Nadella's Microsoft, Windows is the conduit through which these profit streams flow, but not the source of profit itself.

2. The Start menu is coming back and the desktop isn't going away.
On both functional and symbolic levels, Microsoft's new Start menu could restore faith among the longtime users repelled by the Modern UI. The same goes for Microsoft OS chief Terry Myerson's assurance that the company isn't abandoning the desktop.

At Build, Microsoft previewed an early version of the new Start menu
At Build, Microsoft previewed an early version of the new Start menu

3. Windows has a future in the Internet of Things (IoT).
Former Microsoft CEO Steve Ballmer famously missed the mobile boom, but by playing up IoT, Microsoft showed its determination to catch the next big wave. At both the iPad event and again at Build, Nadella championed IoT-centric themes, describing a future defined by machines that perceive their environments, digitize the information, and turn the data into useful insights. Microsoft also showed off a new "Windows in the car" prototype during a Build session, suggesting the company isn't going to simply roll over in response in to Apple's CarPlay.

4. Cortana looks competitive from day one.
Cortana got more attention than any single topic during Build's opening keynote -- and for good reason. Windows Phone's lack of a digital assistant

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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JayMan1
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JayMan1,
User Rank: Apprentice
4/12/2014 | 11:40:17 AM
Re: Implying that MSFT ever had any Mojo
That revenue came completely from the servers and Azure side, which was ironically (or not) run by Nadella in his previous role.
rradina
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rradina,
User Rank: Ninja
4/11/2014 | 10:47:02 PM
Who Believes They Have Mojo?
The question isn't whether or not Microsoft has Mojo, it's who believes they have mojo?  I like my Dell VP8 Win 8 tablet but it doesn't just work as it should (still suffers from open hardware and bad device drivers).  Of course for $219, maybe I shouldn't expect perfection but I won't buy another (Dell or Win tablet).  Why?  I'm tired of waiting for device driver fixes and apps.  Now Microsoft has provided a chief rival with a version of it's own flagship product while I'm stuck using an interface that doesn't really work without a mouse.  If that doesn't say it all, what else does?

 

There just doesn't seem to be energy around Windows anymore.  My company just had an internal hackathon in which I was fortunate enough to participate.  No team built a Windows mobile, tablet or desktop app.  We all built Android and iOS apps.  Although there were a lot of Windows laptops, there were just as many Macs and and no Microsoft software was used to build or serve anything.  Linux servers and open source middleware.  Literally in the span of a few years, Microsoft seems forgotten by new developers.  Sure there are still plenty of older folks using Microsoft stuff but it isn't what leading talent cares about.  It feels so legacy and left out of the recnt mobile revolution.

 

Now I'm attending a software dev event and they gave everyone iPads to use during the event unless, you guessed it, you had your own iPad or Android tablet.  No Windows app and as usual, my Win tablet looks like a fifth wheel on a sports car.

 

What baffles me is the money Microsoft reportedly spends on R&D.  Where is the market leading innovation resulting from the billions invested every years?  It's almost as if Microsoft cannot even keep up by following others, much less lead.

There also seems to be some karma at work.  People seem to shudder at the thought of using Microsoft.  It's like they finally feel freedom and don't trust them after years of questionable practices and results.

 
mak63
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mak63,
User Rank: Ninja
4/8/2014 | 2:01:47 PM
Re: Windows 8: best supporting OS
@ Shane
"Give Cortana Scarlett Johansson's voice. Game changer."
Indeed. :) They will also need to rename Cortana to Samantha, right? I'm all for it. As long as she doesn't leave with SirI and other assistants.
But the way, the new Start menu looks neat and useful, doesn't it?
Charlie Babcock
IW Pick
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Charlie Babcock,
User Rank: Author
4/7/2014 | 6:33:42 PM
Why Windows has become more like open source
Not to crow or anything, but back in January 2009, InformationWeek predicted: "Why Windows Must Go Open Source." We didn't claim Windows would become an open source project but that free versions would emerge to keep developers, particularly mobile developers, engaged with the platform, in the face of open source competition. And according to Michael Endler's point number one, that just beceme true. Steve Ballmer might have enjoyed greater longevity, if only he'd read the piece. http://www.informationweek.com/software/operating-systems/why-windows-must-go-open-source/d/d-id/1076104
RobPreston
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RobPreston,
User Rank: Author
4/7/2014 | 5:26:29 PM
Re: Implying that MSFT ever had any Mojo
"...and then wonder why nothing is selling"? Microsoft posted record revenue of $24.52 billion in its most recent quarter, squeaking out an operating profit of $7.97 billion. So it's selling a few knick-knacks here and there. Microsoft certainly isn't the hottest tech company on the planet -- we'd all like to see it innovate more -- but it still knows how to make money. 
Thomas Claburn
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Thomas Claburn,
User Rank: Author
4/7/2014 | 4:39:08 PM
Re: Implying that MSFT ever had any Mojo
I doubt Microsoft can regain its former dominance but that's for the best. The company more or less rested on its laurels for two decades while the industry changed around it. Nadella appears to have positioned Microsoft to thrive in the new reality. At least Microsoft will get to see Apple suffer through the same diminuation of dominion as cedes its leadership position to Google for a few years, before the game of music chairs continues.
Michael Endler
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Michael Endler,
User Rank: Author
4/7/2014 | 2:32:51 PM
Re: Implying that MSFT ever had any Mojo
"so hopefully their future is now brighter - but not in simple terms of sales and people feeling like they are forced to use the stuff - but in their producing great products people want to use."

Semantics around the word "mojo" aside, I think this is the key point. ;)

Microsoft still faces problems-- Windows XP, Surface, etc. But before Build, it faced even more problems: old developer-new developer balance; Windows versus cross-platform; license revenue versus cloud services revenue; feature deficiency on mobile phones; developer hesitancy to re-write apps for different Windows platforms; no Office on iPad; price and feature competition from AWS and Google; and so on.

Nadella didn't completely solve this longer list of problems, but he did a lot to point the ship in the right direction. The last parts of Ballmer's tenure were marred by his hesitancy to embrace what works now, rather than what worked once upon a time. His strategies advocated partial solutions (were this not the case, Nadella, in his former role, wouldn't have led the Azure to such rapid growth) that were sabotaged by Windows protectivism. Nadella still has work to do, but I think he's justified new optimism.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
4/7/2014 | 2:15:55 PM
Re: Windows 8: best supporting OS
Give Cortana Scarlett Johansson's voice. Game changer.
Michael Endler
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Michael Endler,
User Rank: Author
4/7/2014 | 2:04:45 PM
Re: Windows 8: best supporting OS
Great points, Shane.


Regarding marketing-- I think Microsoft's Windows ads have gotten much better lately. It's the recent Samsung ads that annoy me. But you're right: Microsoft has some momentum that could translate to consumer traction, and with Windows Phone 8.1 about to launch with new features and new hardware, Nadella will face pressure not to repeat the poor messaging that sometimes characterized the Ballmer years.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
4/7/2014 | 1:59:20 PM
Windows 8: best supporting OS
The challenge for Microsoft is to keep up the momentum as a cross-platform cloud/mobile champ without letting Windows 8.1 fall off the map. It's clear Windows OS is transitioning to a supporting role. But with BlackBerry out of the picture, Windows can be a solid third option on smartphones and tablets. Cortana, free Windows licenses (which should reduce phone prices), and the Univeral Apps program for developers put the company in a position to finally get some consumer attention. As long as they don't screw it up with lousy marketing as they did repeatedly in the Ballmer era.
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