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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  • Voldenuit - Friday, July 19, 2013 - link

    >check out the fire sale on Win RT tablets.

    I don't think $450 (with Type cover) for a last-gen SOC and low-resolution tablet counts as a "fire sale", especially when half the storage space is used up by the recovery partition. If anything, it's another sign of Microsoft's ongoing delusion over the exaggerated value of their brand.
  • blacks329 - Friday, July 12, 2013 - link

    The rumours of Apple making iLife and iWork free on the mobile platforms (and possibly Macs as well - iLife already is free with a Mac) makes this very interesting.

    On the Mac, Office is pretty pathetic, I happened to come across Pages (the iLife Word equivalent) by chance and was astonished just how much better it was than Office (even on Windows) for at least 95% of my needs, Word still has significant depth with their macros, but that fullscreen mode on Pages completely blows away anything in Word. Whether it be for heavy document editing or reading, it makes it so much easier to concetrate and just write/consume. And Keynote is also a better PowerPoint. But Excel is still untouchable.

    I'm hope Apple makes iWork for iCloud free and they make their iWork suite free as well on the iPad and iPhone like the rumours suggest (a page was found in the iOS 7b3 German App Store which indicated that these apps would be free).

    iWork is quite sufficient for most casual workloads for page or presentation editing. Although when it comes to number crunching nothing beats Excel on Windows, if only they could make that experience better on the Mac.

    It would be interesting to see how a free across all platforms iWork suite would affect MS.
  • name99 - Friday, July 12, 2013 - link

    About as much as GDocs has affected MS...

    The problem with Office is that everyone hates it (except Excel, the one part that is overall a pretty good product) but everyone is forced to use it for compatibility with everyone else. That's a hard barrier to get around, especially since for most of the people paying (large organizations) it's just not that much of an expensive, and worth it for the compatibility.

    So who CAN switch? Basically individuals who don't need compatibility. Which means
    - people giving presentations by themselves
    - people making spreadsheets for themselves
    - people writing documents which they submit as PDFs (ie read only format)

    Basically home users and students. Not a market MS ever gave a damn about anyway --- they're cheap, they're happy to use some version of MS Office from 10 years ago or some bootleg copy. That's why MS offers those cheapo home/student packages in the first place. At least that way they can make SOME money occasionally from these people --- if they charged full price, no-one would pay and MS would make nothing.

    The way this changes is some LARGE organization (The Pentagon, UCLA, Boeing) decides there's value in switching from Office to GDocs to iWork. I don't see that happening. These organizations are full of drones who have zero initiative and whose only skill set is that they happen to know how to click a few buttons in Office. Switch them to anything else and you'll be in for a year or more of zero productivity and never-ending whining about how the old way of doing things was so much better.
  • Subyman - Friday, July 12, 2013 - link

    I'm wondering if fast iteration is sustainable. The article compares iOS to Windows iteration, saying that Windows takes years between updates but iOS/Android are constantly changing. I think that is a poor comparison. iOS/Android are in their infancy and need to be iterated on quickly. But if you look at OSX, Ubuntu, etc, they have major releases every 2 years or so instead of every 6 months. I think there is room to tighten the releases, but I'd hate to have to move onto a new OS every 6 months on my main computer. Windows going sub would be a one way ticket to OSX/Linux for me.
  • blacks329 - Friday, July 12, 2013 - link

    Apple has also indicated they're accelerating their OSX release cycle to about 1/year. Although they've been only charging in the realm of 20-30 bucks for the past 2 or 3 major OSX updates.

    In a sense a similar $20/year for the latest greatest Mac OS without them explicitly saying as such. Although $20 is pretty easy to digest yearly.
  • fanofanand - Friday, July 12, 2013 - link

    The subscription model will not work for the vast majority of consumers because really, do we need a constantly evolving operating system to watch netflix and "like" stuff on FB? The average Anandtech reader needs significantly more, but to most people out there, computers are nothing but media consumption devices which are occasionally used to play Candy Crush or Angry Birds. If Microsoft attempts this, I would expect either new competitors to emerge or Google will figure out a way to capture the majority of that market share. Microsoft has had quite a few blunders in the last few years, but I think this would be the most harmful to the company's long-term prospects. What works for Enterprise is not necessarily what will work for consumers. Besides, people have gotten spoiled with free updates to Android etc., and without the need for x86 programs why would they pay for what they can get for free? I think if most people didn't have Windows pre-installed on their laptops you would see a significantly smaller market share going to Microsoft. Maybe it's time for a new OS to appear on the market?
  • blacks329 - Friday, July 12, 2013 - link

    I don't know what other company out there, besides the afformentioned 3 (MS, Apple, Google) could possibly succeed on a world wide level with a consumer oriented OS. (Succeed = sales + developers support). I honestly don't think we need more OS' on the PC or mobile front for that matter.

    While web based programs may be the future, we're still at least a decade away from seeing that as plausable for >50% of the population in North America (bandwidth, local computational power among various other things) and even longer for world wide adoption. So if Google plans to stick with that approach for the PC side of things, they're not really going to be all that significant of a player beyond the ultra low end market, who would likely be better off getting an N7 or iPad mini or something. The other approach for them could be to adopt Android to the PC, they already have an ARM based Chromebook, would be interesting to see how that would play out.

    That leaves MS and Apple for the traditional PC OS's. And there really won't be any new players coming in to this market, since first and foremost its a dwindling market, it'll always exist, but its shrinking in size. And even if a new player did come out, getting the amount of developer support that MS and Apple have at this point would take 5 or more years, it took Apple about a decade to shake that 'oh but will I be able to run X, Y and Z on a Mac?' I don't think any one would have the patience for a new player, especially considering how good W7/8 and OSX are.

    "if most people didn't have Windows pre-installed on their laptops you would see a significantly smaller market share going to MS"
    - thats been true for that past 15 years, lol.
  • danjw - Friday, July 12, 2013 - link

    What they really need to do is go the same route as apple with a mobile OS and a Desktop one. They also need to throw out their current culture that is stagnating their OS performance. They need to start advancing the performance of Windows for it to survive.
  • tonyn84 - Friday, July 12, 2013 - link

    The consistent user experience across platforms is actually something I'm very much against. I have different devices because they each specialize in certain things, I don't want them gimped on the interface to make the experience similar. A phone will never do everything my desktop or gaming console does so it should focus on being a phone first.
  • name99 - Friday, July 12, 2013 - link

    You might want to look at what this actually MEANS in the context of Apple, rather than simply dismissing it as nonsense...
    The fact that MS can't do it right, and that Google can't figure out what the hell it's plans in this area are, doesn't mean it's impossible.

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