Software // Operating Systems
Commentary
12/31/2012
08:08 AM
Paul McDougall
Paul McDougall
Commentary
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6 Things Microsoft Must Do In 2013

This could be a make or break year as Microsoft looks to establish itself in mobile, cloud and other hot new markets while fending off challenges to its Windows franchise.

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The past 12 months were challenging ones for Microsoft. The company launched Windows 8, but early sales are said to be modest at best. Windows Phone 8 also arrived last year, but Redmond's share of the smartphone market remains stuck at less than 4%. Meanwhile, the company continues to push into new markets like cloud, hardware and online entertainment with mixed success.

But don't count out Redmond just yet. Microsoft remains the world's biggest software company, it's got a deep management bench, and it's cash rich. Here are some moves the company can make this year to boost its fortunes.

1. Client: Some people love Windows 8, others not so much. Microsoft needs to acknowledge the mixed feelings by giving users the option of booting into the more familiar Windows Explorer environment instead of Metro. Some third-party tools, such as Win8StartButton, have emerged that let users do just that. But Microsoft needs to step in with official support.

The company also needs to put some of its cash to work enticing developers to build more Windows 8 apps, even if at its own expense. Many big content and service providers, including Facebook and Twitter, are on the sidelines when it comes to Windows 8. Microsoft needs to court them more aggressively.

2. Hardware: 2012 saw Microsoft take its first real plunge into the PC hardware business, with the release of the Surface RT tablet and the upcoming Surface Pro. But the early word is that Surface RT sales are slow. One factor is undoubtedly price. At $499, Surface RT costs the same as the entry-level new iPad. Microsoft needs to recognize that establishing a new brand takes some sacrifices, including profits.

[ Will Microsoft introduce more hardware products beyond Surface? CEO Steve Ballmer suggests it's likely. ]

Surface RT would be better priced at about $399, $100 less than the new iPad, but still two hundred bucks more than Amazon's Kindle Fire HD. Even if that makes it a loss leader for Microsoft, it's well worth it if it gets the device into more users' hands.

3. Services: With software becoming a commodity and Microsoft's hardware plans still nascent, the company needs to steal a page from IBM's playbook and build out its services arm. It primarily plays in the market through its equity stake in Avanade, which is majority-owned by Accenture. But it needs to build out its own offerings to compensate for what will surely be declining Windows revenues in the coming years.

Enterprises may be supporting more and more non-Microsoft products on the front end, but they'll still need help tying it all together on the back end and integrating in-house and cloud services. It's potentially a huge opportunity that Microsoft needs to cash in on, even if means making an acquisition. Accenture itself might be a logical target.

4. Cloud: Microsoft needs to make Azure a more compelling environment for mission-critical enterprise applications and services while reducing migration hassles. To its credit, it's evolving Windows Azure from platform-as-a-service (PaaS) To infrastructure-as-a-service (IaaS). Earlier last year, it added persistent-state virtual machine support to Azure, allowing it to accommodate a wider variety of software, including Linux. Microsoft also introduced Hadoop for Azure and support for MapReduce.

In late December, Microsoft added job scheduler support for Windows Azure Mobile Services, and improved scaling for Azure website services and support for SQL Data Sync Services from within the Azure Management Portal. In 2013, it needs to further its build out of its cloud platform to keep it competitive with Amazon EC2, IBM's SmartCloud and other cloud services.

5. Big Data: When it comes to big data, IT's latest megatrend, Microsoft isn't thought of in the same breath as Oracle, with its Exadata Machine, or IBM and its Netezza line. Yet its own Bing search engine, which runs on Windows Server 2012, routinely crunches more than 100 petabytes of data to yield search results. Microsoft also recently began supporting the Apache Hadoop open source framework for distributed big data processing. And it's got powerful front-end tools like PowerPivot for Excel and SQL Server Analysis and Reporting Services.

With opportunities on the client side declining, the company needs to get more aggressive about packaging and marketing these solutions. Dedicated hardware, along the lines of IBM's Netezza Data Warehouse Appliance, would be a good step.

6. Xbox: Windows' declining cachet in the consumer market hasn't affected Microsoft's Xbox franchise. The platform is going stronger than ever, as 2012 saw the introduction of hits like Assassin's Creed 3 and Halo 4, while the Kinect hands-free motion controller has won critical acclaim.

The company needs to inject some of Xbox's life into other product lines, such as smartphones, that have yet to catch on with consumers. With Windows Phone 8 struggling to find a niche, a good place to start would be an Xbox-branded smartphone, or a smartphone based on an Xbox blockbuster franchise like Halo.

What else do you think Microsoft needs to do in 2013 to recapture its mojo? Let me know in the comments section below.

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kjhiggins
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kjhiggins,
User Rank: Strategist
1/3/2013 | 10:21:01 PM
re: 6 Things Microsoft Must Do In 2013
How do you see Microsoft's role in security in the coming year?

Kelly Jackson Higgins, Dark Reading
wht
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wht,
User Rank: Strategist
1/3/2013 | 6:21:22 PM
re: 6 Things Microsoft Must Do In 2013
#1 no, not a good idea.
#2 maybe
#3 No, no, no. MS is not a hardware company, they are a software company. Don't belly flop like HP after acquiring Compaq. And no Carly or NCR guy fiascos.

This is not a good build a better mousetrap solution for MS.
wht
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wht,
User Rank: Strategist
1/3/2013 | 5:57:14 PM
re: 6 Things Microsoft Must Do In 2013
MS does not need this writer's advice or 6 step program to "save them". Other writer's need not offer their list either.
wht
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wht,
User Rank: Strategist
1/3/2013 | 5:55:15 PM
re: 6 Things Microsoft Must Do In 2013
MS is not like HP, or IBM. The same "solution" does not apply. MS has been a software company and still is a first priority, but they are working to become more of a complete solution provider (software, hardware, consumer and business, etc.) like Apple is on the consumer front. Big difference is MS is the primary business solution provider, which is some cases will require 2 different software approaches. This all takes time. Consumers have no patience, and for the most part ignore security issues; they are a different breed and market than the world I work in. It seems many tech writers fit the consumer hat much better than the professional/business hat.

Much of what is being written in supposedly business or technical journal articles is not of value or relevance to an IT manager, it is too consumer focused and of little value, if any. Too often an article is misleading or incorrect. If I read 5 articles on the same subject from 2-3 different magazines, why do they all read too much alike? It's as if the writers gathered in the same lunch room and collaborated on the topic. Maybe 10% are on the right or a neutral path, and 90% can't figure out anything different or new. So they in their arrogance state how they would fix it! That is B.S.not journalism.
jqb
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jqb,
User Rank: Apprentice
1/3/2013 | 2:00:36 AM
re: 6 Things Microsoft Must Do In 2013
Here is my recipe for Microsoft:
1. Open-Source windows. No, not the server versions. Just the end-user editions.
2. Put native version of Office on every platform out there, including iOS and Linux
3. Build every type of hardware imaginable: desky / lappy / tabby / phony / printy
---Perhaps buy HP PC division for quick entry into hardware?
Discuss amongst yourselves.
cbabcock
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cbabcock,
User Rank: Strategist
1/3/2013 | 12:16:14 AM
re: 6 Things Microsoft Must Do In 2013
From the way Steve Ballmer said they would sell "a few million tablets" at a Santa Clara Churchill Club dinner, I concluded Microsoft wants to seed the market with Windows 8 software on its own hardware devices as a proof of concept. It doesn't want to dominate and won't try to dominate the hardware market. Intel does the same thing when it builds its own software to illustrate what its chips can do, then relies on the marketplace to take the hint and create multiple variations. My take is that Microsoft knows that it is a software company and must remain focused on that, not chase hardware sales or try to mimic Apple. It's only when they sound like they don't understand that that I begin to wonder about them. Charlie Babcock, InformationWeek
bwdolphan
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bwdolphan,
User Rank: Apprentice
1/2/2013 | 7:48:45 PM
re: 6 Things Microsoft Must Do In 2013
asutt7n,

To your point, in this same email/blog notice, panties are already getting wet over the thought of an iPhone6, when in the article (yawn), they admit "At the end of the day, we have to assume that Apple (and every other company, for that matter) is always working on new products."

...so why is this positioned as "news" when it's really a fanboy post?
asutt7n
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asutt7n,
User Rank: Apprentice
1/2/2013 | 7:25:40 PM
re: 6 Things Microsoft Must Do In 2013
Re-brand themselves as iMicrosoft, or Apple, then no matter what they put out it will be wonderful, the press will pee themselves with delight and supply them with pages of Free advertising. the Windows 8 environment is great, but my cell phone provider (Sasktel) can't even offer one windows 8 phone almost three months after the launch, but has 5 iPhone variants, 13 Android Phones, 3 Blackberry (poor choice though) and zero Windows 8. "Coming Soon" sometime in the future is a choice of ONE Win8 phone, how is Microsoft supposed to win when the press and industry don't offer their products, but worship Apple?
Aden11
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Aden11,
User Rank: Apprentice
1/2/2013 | 6:02:15 PM
re: 6 Things Microsoft Must Do In 2013
Paul: You are missing one more item on your list and i.e. get rid of Ballmer and bring either Gates back or someone else with a vision.
melgross
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melgross,
User Rank: Ninja
1/2/2013 | 5:07:28 PM
re: 6 Things Microsoft Must Do In 2013
Microsoft has a lot of issues. The biggest one is company understanding of the consumer market is, and has always been, poor. The reason why the XBox 360 has done seemingly well is because the PS3 was delayed by 10 months due to issues with the new, at the time, Blu Ray player. Then, the cost was higher than it was expected to be, so the 360 had somewhere to slip in.

But it was heavily discounted to below cost. The fact is that Microsoft has lost over $9 billion on the Entertainment Division since the first XBox came out. That includes profits from game licensing, etc., music and movie income, and all the rest. This is hardly a successful division. Sales are now down by more than half of the peak.

Other than that, they've had failures in all their other consumer products. The Zune, the Kin, Win Mobile, and others have all been failures. Now, the Surface, and Win Phone have been failing so far.

To say that some love Win 8, and others "not so much", is an understatement. "Hate it" would be closer to the truth. Apple has forced their hand here, and it's difficult to see what the future will be for Windows.

As far as losing money on Surface at a $399 price point, well, who knows if they are not losing money at $499? They lost money on the Zune, the XBox, and other products, such as Bing. Even if they're making some money on Surface (other than losses because of poor sales), lowering the price will force Win 8 tablets into a poor situation. As we all should know, you can't raise prices once they are low, as people expect computing prices to go down, not up. This is why Ultrabook sales were only 25% of what was hoped for in 2012. Windows products of any type can't compete at higher price brackets. That's a dilemma. So while $499 may be too high to be really competitive with the iPad, any lower will squeeze any possibility of profits out of the Win 8 tablet category altogether.

Microsoft really does have major problems, and they won't be going away with a simple fix. There may be no fix.
<<   <   Page 2 / 3   >   >>
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