Today Microsoft released a couple of major announcements regarding the restructuring of their entire business. The complete One Microsoft email from Steve Ballmer along with an internal memo entitled Transforming Our Company are available online at Microsoft’s news center, but what does it all really mean? That’s actually a bit difficult to say; clearly times are changing and Microsoft needs to adapt to the new environment, and if we remove all of the buzzwords and business talk, that’s basically what the memo and email are about. Microsoft calls their new strategy the “devices and services chapter” of their business, which gives a clear indication of where they’re heading.

We’ve seen some of this already over the past year or so, in particular the Microsoft Surface and Surface Pro devices are a departure from the way Microsoft has done things in the past – though of course we had other hardware releases like the Xbox, Xbox 360, Zune, etc. We’ve discussed this in some of our reviews as well, where the traditional PC markets are losing ground to smartphones, tablets, and other devices. When companies like Apple and Google are regularly updating their operating systems, in particular iOS and Android, the old model of rolling out a new Windows operating system every several years is no longer sufficient. Depending on other companies for the hardware that properly showcases your platform can also be problematic when one of the most successful companies of the last few years (Apple Computer) controls everything from the top to bottom on their devices.

There’s also the factor of cost; when companies are getting Android OS for free, minus the groundwork required to get it running on your platform, charging $50 or $100 for Windows can be a barrier to adoption. When Microsoft talks about a shift towards devices and services, they are looking for new ways to monetize their business structure. The subscription model for Office 365 is one example of this; rather than owning a copy of office that you can use on one system, you instead pay $100 for the right to use Office 365 on up to five systems for an entire year. This sort of model has worked well for the antivirus companies not to mention subscription gaming services like World of WarCraft, EverQuest, etc., so why not try it for Office? I have to wonder if household subscriptions to Windows are next on the auction block.

One of the other topics that Microsoft gets into with their memo is the need for a consistent user experience across all of the devices people use on a daily basis. Right now, it’s not uncommon for people to have a smartphone, tablet, laptop and/or desktop, a TV set-top box, and maybe even a gaming console or two – and depending on how you are set up, each of those might have a different OS and a different user interface. Some people might not mind switching between the various user interfaces, but this is definitely something that I’ve heard Apple users mention as a benefit: getting a consistent experience across your whole electronic ecosystem. Apple doesn’t get it right in every case either, but I know people that have MacBook laptops, iPads/iPods and iPhones, Apple TV, iTunes, and an AirPort Extreme router, and they are willing to pay more for what they perceive as a better and easier overall experience.

Windows 8 was a step towards that same sort of ecosystem, trying to unify the experience on desktops, laptops, smartphones, tablets, and the Xbox One; some might call it a misstep, but regardless Microsoft is making the effort. “We will strive for a single experience for everything in a person’s life that matters. One experience, one company, one set of learnings, one set of apps, and one personal library of entertainment, photos and information everywhere. One store for everything.” It’s an ambitious goal, and that sort of approach definitely won’t appeal to everyone [thoughts of Big Brother…]; exactly how well Microsoft does in realizing this goal is going to determine how successful this initiative ends up being.

One of the other thoughts I’ve heard increasingly over the past year or two is that while competition is in theory good for the consumer, too much competition can simply result in confusion. The Android smartphone and tablet offerings are good example of this; which version of Android are you running, and which SoC powers your device? There are huge droves of people that couldn't care less about the answer to either question; they just want everything to work properly. I’ve heard some people jokingly (or perhaps not so jokingly) suggest that we would benefit if more than one of the current SoC companies simply “disappeared” – and we could say the same about some of the GPU and CPU vendors that make the cores that go into these SoCs. Again, Microsoft is in a position to help alleviate some of this confusion with their software and devices; whether they can manage to do this better than some of the others that have tried remains to be seen.

However you want to look at things, this is a pretty major attempt at changing the way Microsoft functions. Can actually pull this all off, or is it just so many words? Thankfully, most of us have the easy job of sitting on the sidelines and taking a “wait and see” approach. Steve Ballmer notes, “We have resolved many details of this org, but we still will have more work to do. Undoubtedly, as we involve more people there will be new issues and changes to our current thinking as well. Completing this process will take through the end of the calendar year as we figure things out and as we keep existing teams focused on current deliverables like Windows 8.1, Xbox One, Windows Phone, etc.”

Whatever happens to Microsoft over the coming year or two, these are exciting times for technology enthusiasts. Microsoft has been with us for 37 years now, and clearly they intend to stick around for the next 37 as well. Enjoy the ride!

Source: Microsoft News

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  • brucek2 - Thursday, July 11, 2013 - link

    But why do we need a "license"? I'd imagine virtually all of us readers here have already bought one office productivity suite. Have there really been new developments in the actual practical use of office memos, spreadsheets, presentations etc that require a full priced entire new set of applications? I doubt it, and if there were the appropriate price for them seems perhaps much smaller, to cover the incremental add.

    Or take your college kid. OK, new young adult, let's say this will be their first purchase. Is $100 for life -- say roughly $7,000 in today's dollars, vastly more after adjusting for inflation -- for basic office productivity an appropriate use of resources for functionality that was mostly completed before they were even a teen?
  • johncbennett - Friday, July 12, 2013 - link

    Actually, the present value of a series of $100 annual payments for sixty years, assuming a 3% annual rate, is closer to $2,700, not $7,000.

    Of course, I'm using Microsoft Excel to calculate this, and given that Excel has an incentive to keep me as a loyal user, you should take the result with a grain of salt.
  • Flunk - Friday, July 12, 2013 - link

    If you think they're not going to ever increase the price you're living in a dreamworld.
  • Dug - Friday, July 12, 2013 - link

    "But why do we need a "license"? I'd imagine virtually all of us readers here have already bought one office productivity suite. Have there really been new developments in the actual practical use of office memos, spreadsheets, presentations etc that require a full priced entire new set of applications? I doubt it, and if there were the appropriate price for them seems perhaps much smaller, to cover the incremental add."

    Yes there has. If you are an Office user then the upgrades in just Excel are worth the price. If you are paying someone $20/hr and you can get a project done quicker because of $100-$144/yr software then it is worth it. If I'm using the software and can save an hour of my time in one day then its worth it.

    Right now Office 2013 costs us $379 for an open license. That's for one seat.

    With Office 365, we can let a user put it on a desktop, laptop, tablet, etc. because the license is per user with 5 devices. They can log into any computer with their credentials and run the Office suite from anywhere. Our Mac users that also run bootcamp can have Office on both sides for no additional cost. Not to mention that by the time 3 years is up, there will be a new version that will have features that will help users. With 365 you can automatically upgrade.

    So buying once really doesn't save any money. Especially with people or employees that have more than one device. Or even a family that has multiple computers. I have a wife and two kids that need office for school. That would cost me a minimum of $600 for a basic version for all of us.
    If they need to upgrade in a few years, I've lost $300 dollars right there.
  • name99 - Friday, July 12, 2013 - link

    So you are running Word 1.0 and Excel 1.0, on Windows 3.0?
    Then your comparison is BS, isn't it? You're ALREADY paying to upgrade every three years or so.

    There are plenty of things to complain about with Office, even about Office pricing, but your particular complaint is nonsense.
  • brucek2 - Friday, July 12, 2013 - link

    While I have a relatively current Office, I find increasingly that I'm just using Google Docs because that's what's compatible with some of the people I'm working with. Without trying to be pejorative to that service the feature set there does feel roughly like what I remember Word 3.0 and Excel 3.0 being. And you know what? It turns out that's fine most of the time. There's a few QoL things I occasionally miss but nothing that would come close to adding up to "hours" of actual gained productivity in a week or even a month. And I'd expect same would be true for most users most of the time.

    I'm not going to respond to 1.0 or 2.0 because I think those versions really weren't feature complete yet. I think 3.0 was getting there with rapidly diminishing returns since then. While its true few users are actually running versions that old, I think in most cases that's because of artificial reasons like staying compatible with work mates, staying on a supported version, having the version that was updated for the current platform, etc vs. actually having received beneficial new features.

    Going even farther back -- on unix shells I still frequently use vi. I'd don't know if there's been new features in the last 25 years but if so I doubt I'm noticing. I'm sure glad no one was trying to charge me $5/month for all that time though.
  • Notmyusualid - Monday, July 15, 2013 - link

    Not true.

    I'm still using my copy of Office 2007, that I've been using for years.

    I recently added Visio to it too, no problem.

    Before that I believe I was using a copy from 2002.

    No drama, just getting good use from your purchases.
  • bountygiver - Friday, July 12, 2013 - link

    Not to mention that you get upgrades as new versions are released if you stay subscribed to the service.
  • Notmyusualid - Monday, July 15, 2013 - link

    What, are all MS employees online today?
  • Voldenuit - Friday, July 19, 2013 - link

    Anandtech is being Reddited.

    I got 3 licenses of Office 2010 from work for $10, but I'm using LibreOffice on my home laptop (yeah, it's pretty sucky UI-wise) because I don't want to be held hostage to Microsoft's price structure.

    Once all my core Steam games get Steamplay and Linux support, I'd like to make the switch to Linux, too , although the transition and learning curve so far has been too steep for me to step into - and this is from someone who's used AIX and hpUX in the work environment for several years, and who ran OS/2 Warp as his main OS for a couple years.

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