Microsoft's TechEd conference this week showcased more than just Windows 8 and its amazingly well-designed Metro touch-based user interface. It also heralded what may prove to be a tectonic shift in the strategic position of Microsoft in the enterprise. And with that shift may come an equal and opposite shift in the fortunes of Google and Apple as they contend--in their respectively challenged ways--for the heart and soul of the enterprise/consumer convergence.
We've seen versions of this movie before. And while the past is never as good a predictor of future performance as we all wish it could be, this is looking like a rerun of the Windows, Office, and SQL database market share wars of yesteryear. In all three cases, Microsoft was not first to market, nor were its initial products instant successes. But over time, and through that plodding patience that has frustrated competitors since the company was founded, Microsoft eventually clawed its way into a leadership position.
This year's version of "Revenge of the Nerds" is brought to you by the combination of a helluva great user experience in Win 8/Metro and an underlying platform and development strategy that only Microsoft could even try to pull off. And while nothing is ever guaranteed in techy land and Microsoft could still lay an egg with its new approach, some glaring omissions and unavoidable limitations on the part of Google and Apple give Microsoft more than a fighting chance at success, especially when it comes to meeting the needs of the enterprise and its employee/consumer constituents.
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The core of Microsoft's strategy is relatively easy to explain: provide a single, unique, and visually superlative multitasking user experience (Metro) across mobile and desktop devices while simultaneously providing a single development environment that supports an extremely broad set of development technologies and a write-once, deploy-anywhere design paradigm. Back that up with an enterprise-class security model and commercial experience, and you have, at least on paper, a major comeback strategy for Microsoft's converged phone, tablet, and desktop aspirations. And just to cover all the bases, Microsoft is allowing Win 8 users to run a fully Windows 7-compatible desktop for those apps and users who want or need to interact in the older desktop paradigm.
On the commercial side, Microsoft is offering an app store experience that doesn't subject customers to the vagaries of Google's Wild West, security-challenged, malware-friendly app store and that rewards developers with a more streamlined on-boarding experience and a much greater cut of the action than they can get out of Apple. Enterprises that develop their own Metro apps can opt to have them provisioned exclusively from the Windows store or distribute them internally to their users (who must use a corporate site-licensed account to access the internal apps.)
The result is a very enterprise-friendly development and deployment model that solves the security and platform problems of Google while out-enterprising Apple, which is the undisputed master of the retail technology market but is still trying to figure out how to target corporate IT's procurement needs.
There are, however, three glaring problems facing this otherwise rosy-looking future for Win 8/Metro:
--The operating system isn't yet in general release.
--The enterprise will need a major hardware refresh in order to take advantage of this opportunity.
--Microsoft will be facing an uphill battle for critical mass against Apple iOS and, to a lesser extent, Android on the mobile and tablet side of the enterprise. This is hardly a trivial matter, and Microsoft will have a hard slog in order to overcome Apple's amazing momentum.
There's a fourth factor as well: there need to be more Windows 8 phones on the market in order to entice consumers, and I don't think Nokia can--or should--do this alone. Interestingly, there's no dearth of products on the PC or tablet side--I'm writing this blog post on a Lenovo X220 convertible tablet/PC, which will run Win 8 just as soon as I have a moment to install it--and new tablets and PCs are coming from pretty much every PC vendor on the planet: HP, Dell, Lenovo, and Samsung, to name just a few.
On the other hand, there are four factors in Microsoft's favor. The first is that the BYOD "movement" has been only grudgingly supported by IT folks, who would rather have a more secure way to ensure that mobility doesn't result in data leaks or theft.
Second, BYOD in the enterprise is still in a nascent phase, especially on the tablet side, as corporate IT and the line of business work out the apps and use cases for these devices ahead of truly massive procurement cycle. This means Microsoft can stay in the game: A single OS (that multi-tasks on all three platforms) and underlying security model would be one way to bring your own device to work without inadvertently taking home or giving away something you shouldn't.
The third factor is that Google is flunking enterprise security and RIM is imploding, which opens up the number-two phone spot for Microsoft. And finally, the development model for Win 8/Metro can harness a developer community that is second to none in size and enterprise knowledge. This overcomes a prime requisite for building critical mass, and any competitor that discounts the potential of this developer community does so at its extreme peril.
It's pretty clear to me that Win 8/Metro will be a hit in the enterprise--the question is really how much of a hit. From a development standpoint, having a single user experience for enterprise software will overcome a major innovator's dilemma for the entire enterprise market: right now, innovative new functionality that is being deployed on the iPad--whether from a newbie like Workday or an old-guard vendor like SAP, Oracle, Microsoft Dynamics, Infor, and the like--makes pretty much anything they try to sell on a desktop or browser look last year's model. It's been remarkable how quickly the mobile/iPad user experience has leapfrogged most of what the enterprise software vendors have done to provide a modern user experience over the last few years.
Metro can change that dramatically, and presenters at TechEd this week showed prototypes from SAP and Microsoft Dynamics of Metro-based apps that would instantly bridge the desktop/tablet gap that iPad presents today (and for which Apple has no comparable fix). Again, this will require a hardware upgrade for most users, though even that may be less onerous than upgrades have been in the past. In addition to buying laptop convertibles like the Lenovo X200, companies can pick up Samsung's Slate PC/tablet, currently retailing for approximately $1100, which can function as a Metro tablet or sit in a docking station and function as a keyboard-based Windows 8 desktop machine--and switch back and forth as the app requires or the user prefers.
Either way, that's one device that covers both the desktop and the tablet. And with cell phone pricing geared toward low up-front costs in exchange for long-term contracts, it's safe to assume that the consumer retail cost of Microsoft's hardware refresh would be about $1300 at the high end. That's a cost that IT procurement should be able to improve on significantly and that Apple can't even begin to touch. I firmly believe that even without any net new apps, Win 8/Metro's usability and unified user experience across all three platforms, compared to a touchless keyboard mouse paradigm and a wholly separate tablet experience, should provide a lower TCO and a demonstrable ROI for the hardware upgrade.
So while it's a gamble on Microsoft's part--and a big, bet-the-business one at that--I don't think there's much chance that it can go wrong. The real question is how right it can go, and whether the result is a zero-sum war of attrition against Apple and Google, or a rising tide that lifts all three vendors, despite their differences. I'm leaning towards the former. The consumerization of IT has made IT buyers more like fickle consumers than conservative, buy-for-the-long-term IT procurement specialists, and that means "new and cool" will get its day in the sun more rapidly than it has in the past.
And that's before we factor in the advantage that Microsoft Azure will play in the development and deployment of Win 8/Metro apps. This will bring another whole set of capabilities that add significant cloud-based functionality to the Microsoft enterprise experience.
Win 8/Metro may prove to be much more than just a sequel to "Revenge of the Nerds" a la Windows, Office, or SQL Server. This tectonic shift could happen much more quickly and dramatically than anything Microsoft has ever pulled off. And that's saying a lot.
Josh Greenbaum is principal of Enterprise Applications Consulting, a Berkeley, Calif., firm that consults with end-user companies and enterprise software vendors large and small. Clients have included Microsoft, Oracle, SAP, and other firms that are sometimes analyzed in his columns. Write him at firstname.lastname@example.org.
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