Friday, April 04, 2014

The Microsoft resurgence


Background

The last few months have seen Microsoft take several leaps on the path of re-establishing itself as a relevant force in the technology industry. It's not the driving force that it used to be, but it is becoming relevant again. Mind you, Microsoft has gone to hell and back in the last 9-months or so:

1. Ballmer announced a huge shake-up as part of his One Microsoft Strategy (the stock price tanked)
2. Ballmer promptly announced his resignation immediately after (the stock price started to tick up)
3. Microsoft stayed in the news for all the wrong reasons - Mulally vs. Nadella vs. Insert-Name-Here - the world's preeminent software company cannot find a CEO?
4. Ballmer ushered in Nadella (hallelujah - he quit!)

Everyone worried that Nadella would be a figurehead. They couldn't be more wrong! In the last week alone (to the day), Microsoft has made some groundbreaking announcements that align very closely with Nadella, not Ballmer. Here are the ones that stick out for me:

1. Office for iPad
2. Windows is free for devices smaller than 9-inches
3. Open sourcing the C# compiler
4. Package Manager for Windows Power Shell (a la apt-get)
5. Gorgeous Lumia 930

Stock Price as of this writing: $41.39, a level unseen in the last 10-years.

The Renaissance

Let's be clear about one thing: All these products were not developed in the few months since Nadella took on the office of CEO. The more plausible hypothesis is that these have been in development for a long time or were ready to go but were being held back like water is held back by a dam. Nadella is the force that helped tear that dam down, an event that has triggered a metamorphosis of Microsoft's DNA. It is finally starting to act on the realization that it cannot monopolize and dominate every market/category in which it chooses to compete. It has also become comfortable with not foisting Microsoft Windows on everyone that wants to use their world class applications and tools, especially on desktops and on mobile devices. This particular shift might hurt Windows sales in the long term, but let's break down the impact on sectors impacted by this shift.

Consumer

Windows sales have been tanking for a while in this arena. Windows 8 has been to consumer sales what climate change/global warming have been to the ice caps. Microsoft's moves indicate that they are okay with ceding some of this space in lieu of lost sales.

Mobile

Microsoft announced the elimination of OS license fees for devices smaller than 9" in size. Expect all Windows Mobile devices to be 8.99" or less over the course of the next few years! More importantly, Microsoft finally released Office for the iPad (something I have written about in the past) and is already the #1 application on the App Store. This is a devilish play if you ask me. The apps are free to download and free to consume content. Creating content requires a $100 Office365 subscription. Paying customers will have 5 additional licenses to leverage Office - the best productivity suite on the planet, hands down. It moves Office customers to consuming SaaS services, which further improves Microsoft's capabilities in this space. With Microsoft teams collaborating more and more these days, the increased user base can only have positive knock-on effects for current and future Microsoft SaaS services.

Enterprise

There is no viable alternative in the Enterprise space, and this has a lot to do with Nadella's leadership in the Server & Tools division. Under his stewardship, Microsoft has released some of the best management and automation tools in the industry.

The Multi-Platform Embrace

Microsoft finally seems unencumbered with the burden of pushing its operating systems on everyone on this planet. For observers and share-holders with my collaborate or be decimated bent of mind, this is a harbinger of a bright future. Cloud-delivered applications are a key part of the technology future, and Microsoft is for once leveraging its strengths without locking out customers on non-Microsoft platforms. I hope Microsoft continues to forge collaborations and partnerships that increase its market share of applications, tools and operating systems. This isn't a zero sum game; everyone needs to be touched by the greatness of Microsoft products. "For Microsoft to win, others don't need to lose"!

0 Comments:

Post a Comment

<< Home