What lays ahead for the software giant?
New direction underway Too late for Windows 8? Will the Xbox One turn the tide?
Long before the recently announced retirement of CEO Steve Ballmer, Microsoft had a lot invested in the current generation of products centered around Windows 8.
Lagging sales and dwindling market shares demand action, instigating severe overhaul in the last year while questionably reserved to staying the course.
For the last two decades Microsoft has dominated desktop computing, for both the business and personal sectors. Even with the ongoing negative onslaught, nothing is worse with Windows 8 than it was when Windows Vista released (meaning nothing a new release can't cure). Yet the attitude from many in the
community seems to be that Microsoft's pitfall is insurmountable. Most of this can be attributed to the rise of Google.
Google has been teaching lessons up and down the tech industry, demonstrating that no matter your size, no tech giant is safe resting on their laurels (I'm looking at you Yahoo and BlackBerry).
No longer can corporate giants rest easy, it's either put up or shut up. So which will be the fate of Microsoft?
Despite how valuable brands have become, a company's product line remains the most important factor to study for future performance. Let's look at what Microsoft has going for it.
Windows 8- Less than stellar release. Reviews were critical and adoption has been a crawl1barely above a 7% market share after a full year. Most of the negativity revolves around the updated display/interface however, performance and functionality remains unrivaled. The OS combines products with ease, from integrated video communications (combining Skype's large community with Lync's impressive tech capabilities), office, cloud services, and still the largest amount of compatible applications. Verdict- Nothing a new version number can't fix.
Xbox one- Utilizing all of the work put into Windows 8, the upcoming Xbox is actually built from a version of Microsoft's latest operating system, stripped of unnecessary parts to free up system resources. Competing with Sony for the game console market, Microsoft has also been preparing to take on the home entertainment system market. Deals struck with big names- ESPN, NFL, NBA, Disney, and Netflix show how much MS has concentrated on living room media. By providing this core range of media, the Xbox can combine functionality such as overlaying fantasy sports information over a live game or split screening a Skype while watching a movie. Despite your opinion on how they'll do, there is no question MS has had big plans in the works for Xbox, Xbox Movies, Xbox Music, and the Windows 8 app store.
Windows Mobile-Like the desktop OS, Windows Mobile has been unable to gain any momentum. The UI is more suited for touchscreens and mobile devices but the name of the mobile game is Apps. There is too little support for the current Windows generation due to the low adoption rate. While the desktop enjoys widespread development on the main Windows platform, Windows Mobile has been unable to recruit new efforts. The result a barren wasteland of apps for Surface or Windows Mobile. Thus begins the vicious cycle of nobody buying the devices because there aren't any apps, and nobody developing because nobody has bought the devices.
As a whole Windows Mobile performance shines and the interface rivals any product on the market, bar none. If not for the issue with lack of Apps, phones like the Nokia Lumia2The Verge- Nokia Lumia 1020 Review would do phenomenally well on the market. Unfortunately everybody's already at Google's party and Microsoft simply hasn't done quite enough to lure them away.
Office Suite- The totalitarian reign of MS office may soon be coming to an end. While still maintaining an unparalleled wide range of functionality which is still praised by many, is being bought and used by fewer and fewer. The truth is most of what MS Office offers is covered by free alternatives; mainly Google Docs. How long is until Google's suite of products meets the needs of most businesses, the bread and butter of Microsoft's profits. What recently seemed a long way off, is quickly happening as Google's exemplary record wins over customers in the business field after they've converted the entire personal market.
Enterprise Software- See above. Microsoft's business products expand way beyond the Office Suite ( .NET applications, MS SQL, Windows Server, and SharePoint aren't going anywhere anytime soon), but it was only a few years back that it seemed impossible that anybody could take the desktop OS or Office/Docs crown away from MS, now look where we are. Banking on the status quo to continue indefinitely is never a good long-term strategy.
So what's next for the original king of tech?
Despite horrendous coverage from the tech media industry and a staggering lack of respect from the twitter generation, Microsoft isn't in any danger of going anywhere with their substantial amounts of tech investments and business products revenue.
People will point to Microsoft's 3% market share in smartphones, or 10% adoption rate of windows 8, and the fact that Xbox division has cost the company money. But with the profits from business products/services and the massive amount of tech investments, Microsoft has enough lined up to be relevant for the upcoming years.
Windows 8 and mobile have both struggled, but once Microsoft finds a way to grow their customer base, they'll be able to match Google service for service. While Google capitalizes on their substantial third party support, Microsoft has a vast tech value and plenty of resources to keep building.
Investing in the future.
Google get's a lot of press for their upcoming products still in beta testing such as Google Drive and Google Glass. The market for these products has already begun forming with media coverage and consumer attention. Meanwhile Microsoft's future tech products are largely unknown.
Illumiroom- A 2D projection for now, this proof of concept show's Microsoft's objective to improve the visual interaction you receive from your living room media.
MS 3D display with haptic feedback- Microsoft demonstrates a clear desire to introduce 3D interaction. Glasses are still required for now, but 3D modeling and user input can be precisely implemented. Down the line the goal will be to combine this with the Illumiroom concept.
Kinect While it's still largely considered as an Xbox add on, the Kinect represents a significant investment by Microsoft towards it's vision of computer interaction. Microsoft has been resolute in their vision of touchless interfaces stretching beyond restrictive screens. Whether that dedication pays off remains to be seen, but there is no question that they have a lot of tech resources behind it's continued development.
There is no doubt a true Virtual 3D interface would sell well across all markets. While the price point may start high, it's only a matter of timing to refine the process and get costs down. Microsoft's vision for home entertainment is a truly interactive environment, personalized to users. While there may be much industry hesitation, Microsoft remains convinced in their ability to deliver this vision.
How can they realize this vision?
Within the year it's likely that Microsoft will have a new CEO, to go along with an already drastically reorganized company structure3gigaom.com- Microsoft reorg aims to break down silos. What will be the changes that Microsoft needs to change in it's process to start capitalizing on it's impressive tech?
Improve brand image- Microsoft is often dismissed these days. The operating system is still respected but their mobile platform barely gets recognition and so far Sony is outpacing Xbox on the upcoming console generation. So what's with the sudden Rodney Dangerfield act? It might be related to the disapproval from tech community towards the big corporation's tactics and policies towards new developers and today's tech market.
Turn around developer support- This can be done by improving company outreach and support to developers, and also making the process as smooth and easy as possible. It wouldn't hurt MS to hire as many developers as they can if they're confident with their employee continued training process.
Deliver on Xbox one- The one aspect universally acclaimed about windows 8 line is the outstanding performance. There is no reason to think the Xbox one will be any different. If the box one delivers on performance and the capabilities that Microsoft is proposing then it may be surprisingly successful. By tapping into the casual gaming market, smartphone market through smartglass, the Xbox can win a lot of people over and help improve Windows 8 rep.
Release the next windows- Little known is that Windows Vista was actually a great operating system at the end with SP2 fixing every complaint with the OS. Windows 8 is actually better out of the gate, but the interface threw too many people off before it could get going. Despite touting it's strengths, improving the interface in 8.148.1 Preview, there may be no reversing the bias which comes with the name Windows 8. Similar to the transition from Vista to Windows 7, Microsoft can likely win over a lot of people by simply starting fresh with the next version.
Make no mistake, Microsoft has plenty of options and reasons to believe in a fourth quarter recovery. Google has been chipping away Microsoft's revenue streams but MS still has plenty left standing.
Will Microsoft be able to deliver? A lot depends on their adaptive corporate strategy over the next year as well as a strong choice for next CEO. Time shall tell and we will wait and see.