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Microsoft Faces 4 Big Challenges

Microsoft CEO Satya Nadella is riding high with analysts and investors -- but look at the remaining hurdles.

only 14% of the overall computing device market, which includes smartphones and tablets in addition to PCs.

4. Will next-gen productivity experiences live up to Nadella's hype?
Right now, Microsoft Office sets the standard for productivity, but for many users alternatives such as iWork or Google Docs might be good enough. This broad parity, however, supposes that most users think of productivity in pretty old-fashioned terms: basic word processing, basic spreadsheets, and so on. Nadella believes Office will remain king not only because it remains the most sophisticated option for traditional productivity, but also because it will become a platform for entirely new types of productivity.

"We believe productivity experiences will go beyond individual applications to deliver ambient intelligence that spans applications," Nadella said this week.

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Delve, one upcoming Office 365 product, acts like a sort of "Facebook newsfeed" for the workplace, for instance. It uses cloud-driven machine learning to observe how, on what, and with whom you work, and then it attempts to surface useful information intelligently when you need it. At a high level, the technology, as Nadella recently put it, challenges the assumption that people know what they're looking for when they conduct a search.

Other examples include natural language queries in Power BI, a feature that Microsoft says can help companies build data cultures by making analytical tools more accessible. During this week's earnings call, Nadella also illustrated new breeds of productivity with allusions to Windows Phone 8.1 personal assistant Cortana, and the Surface Pro 3's digital ink technology.

It's good for Microsoft to center its focus on one of its strengths: productivity. It's also good for Microsoft to think about ways it can disrupt the status quo. But will personalized Office experiences truly revolutionize how we work or just give Microsoft new features to round out its catalogue?

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