Microsoft Changes Course

ON JULY 10, with the release of a Microsoft strategy memo, CEO Satya Nadella charted a new course focused on inter-connectivity and productivity—one in which the standard-setting Office applications and other products and services could slowly blur together, becoming different modes of working with the same data.
      Right now, of course, you can still buy Windows, Office, Windows Phone, and other Microsoft products and services. But within the next decade, your interaction with Microsoft products could be radically different.
      Nadella’s strategy memo marks an evolution: Following Steve Ballmer’s “devices and services” strategy and Nadella’s own “mobile first, cloud first” concept, the plan now is to make Microsoft “the productivity and platform company for the mobile-first and cloud-first world.”
      “Microsoft has a unique ability to harmonize the world’s devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered todo more and achieve more with what is becoming an increasingly scarce commodity—time!” Nadella writes.
      For Nadella, productivity requires connections, intelligence, and most of all, ubiquity. He writes at length of the need to “reinvent” the company’s culture and products to achieve that new reality.

Connections forged

      Microsoft has already spent considerable effort connecting its apps to one another. For example, Microsoft’s Business Intelligence platform can tap into Bing Maps, and Excel can connect to live data sources stored within the Azure cloud. The Bing search engine has morphed into a knowledge repository powering Cortana and other services. And Microsoft has responded to the collaborative advantages of Google Apps and other competing services by making enhancements in its Office suite, especially its Web apps.

Microsoft has used its Web apps to quickly launch new features.

Nadella also recognizes the potential pitfalls of the so-called Internet of Things—that we could be overwhelmed by a wave of data that we simply can’t grasp, let alone place in its proper context.
      “Billions of sensors, screens and devices—in conference rooms, living rooms, cities, cars, phones, PCs—are forming a vast network and streams of data that simply disappear into the background of our lives,” Nadella writes. “This computing power will digitize nearly everything around us and will derive insights from all of the data being generated by interactions among people and between people and machines. We are moving from a world where computing power was scarce to a place where it now is almost limitless, and where the true scarce commodity is increasingly human attention.”
      It’s easy to dismiss this notion of “reinventing” the company as mere marketing-speak. And Microsoft’s product portfolio won’t change; Nadella identifies Bing, Dynamics, Excel, OneDrive, OneNote, Outlook, PowerPoint, Skype, and Word as components of the roster.But Nadella also calls out other Microsoft technologies that aren’t so much products as services—namely its ”Oslo” technology, now renamed Delve, and Cortana, the digital assistant powering the latest iteration of Windows Phone. Both technologies interact in new ways with data that Microsoft has collected elsewhere. Other services, such as Skype Translator, will help to surmount language barriers affecting coworkers who are collaborating across continents.
      “Increasingly, all of these experiences will become more connected to each other, more contextual and more personal,” Nadella writes.

Microsoft’s Delve outlines working relationships and relevant information.

Software as services

      Microsoft’s role, as Nadella outlines it, is to facilitate those connections among devices, people, and data, parsing the data in such a way that it’s genuinely useful. “All of these apps will be explicitly engineered so anybody can find, try and then buy them in friction-free ways,” Nadella writes. “They will be built for other ecosystems so as people move from device to device, so will their content and the richness of their services—it’s one way we keep people, not devices, at the center.”
      Note his emphasis on “people, not devices.” It’s a hint regarding how Microsoft will differentiate itself as the company rethinks its strategy.
      Not too long ago, Google regarded offerings such as Google Drive and Gmail as services that belonged on their own platforms. But that’s less true today. While email can flow across platforms, it’s the intelligence on top of your email—reading a message to learn about an upcoming flight, say, and determining how soon you need to leave for the airport, factoring in traffic—that’s increasingly becoming platform specific. I can open my Gmail account on my Windows Phone, but Google Now will ping me only if I have my Samsung Galaxy Note 3 handy.
      It’s conceivable, then, that what we currently think of as Microsoft products may evolve into services as our data flows freely in and out. In this arrangement, users are invited to partake of the services that Microsoft, Google, and Apple each offer—but those respective services never venture outside their corporate walls. (Compare this approach with the way Wolfram Research handles data in its latest Mathematica release).

Office for iPad looks great, but it lacks the smarts of Office on Windows.

      You can see this idea in action already. You can open a spreadsheet in Excel, or in Word. You can also manipulate that data via a Web app, if you like. Or to use Nadella’s example, you can take language—which is just another form of data—and interact with it through Skype, Word, or Outlook, translating it and correlating it to your contacts. It’s that last bit, however, where Microsoft’s own software is required.
      In other words, Excel can run on an iPad, but Excel runs best on a Windows PC or a Surface tablet—not because of any hardware limitations, but because Microsoft reserves its digital intelligence for users who choose Microsoft platforms. In a way, a Windows PC or tablet authenticates the user, allowing that person access throughout Microsoft’s ecosystem.
      And that’s the direction Microsoft is heading these days. Instead of encouraging you to purchase a Microsoft Office DVD, the company now promotes Office 365 and asks you to treat the productivity suite as a subscription, with the promise of new capabilities and features added over time. You’re simply buying a bundle of services.
      Five or ten years from now, Nadella suggests, we may still open Word, or Excel, or Internet Explorer to do our work. But we may increasingly regard those apps as remnants of a bygone age.