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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  • Crono - Thursday, July 11, 2013 - link

    " I have to wonder if household subscriptions to Windows are next on the auction block."

    I hope not. The subscription model might work for occasional use of professional grade software like Photoshop where I might need only a month or two of usage for a project, but for a fundamental product I use daily, like an operating system, it is not something I want to see charged to my account on a monthly or yearly basis. Software companies might benefit from the product-as-a-service mentality that seems to becoming popular, but I'd rather not worry about having to pay month-by-month. I like owning software, even if it means it isn't up-to-date in a few years time.
  • N4g4rok - Thursday, July 11, 2013 - link

    It does make dealing with software licenses a bit nicer.
  • Omoronovo - Friday, July 12, 2013 - link

    This is more to do with the horrible state of current software licensing than there being any real advantage to a subscription based license. The only people this benefits directly are Microsoft; if you stop paying, you lose access to the software even if you have already paid more than the original "sales price" for the indefinite license.
  • Flunk - Friday, July 12, 2013 - link

    I suspect that they wouldn't be able to get away with that, it's more likely that Windows will move closer to Android's pricing model. Either that or people will move to cheap OSes when they start charging yearly.
  • crimson117 - Friday, July 12, 2013 - link

    If MS sends me a bill each year reminding me that it's not free, I'm far more likely to switch to OS X or Linux before that bill comes due.

    If I eat the whole cost of the OS up front, I'm less likely to switch since the cost going forward is zero.
  • brucek2 - Thursday, July 11, 2013 - link

    "$100 for an entire year" for office productivity doesn't sound like such a good deal to me. We're at least a couple decades into the personal computer era and the basic functionality needed was completed many years ago. I've paid for office suites several times already and don't see why I need to pay again so soon, and certainly not every month for the rest of my life.

    I don't think its good for our economy and I know its not good for me that we're trying to greatly expand the price of basic things by changing them from a pay once and done model to a must subscribe for life mode. Companies seem to have gotten that smaller size and lower power consumption are important, maybe they'll get lower cost consumption next.
  • jlaforge - Thursday, July 11, 2013 - link

    I pay for Office 365 and find the desktop apps to be worthwhile. However, the basic functionality that you describe is available for free online as the Office Web apps that are part of Skydrive. These applications are constantly improving, and have already reached the point where light office productivity users will find them feature complete.
  • Penti - Thursday, July 11, 2013 - link

    You also have skydrive integration if you already has Office 2010/11. So your documents are already there hosted online, if you like to and it's not like the home/student versions of Office 365 has sharepoint online.
  • Thornik - Monday, July 15, 2013 - link

    Key point of MS fail are:
    1. It's "online" means Internet ALWAYS have to be ON. Needless to say how stupid this assumption.
    2. "Hook" like subscription is an obvious agony of MS while their income falls, but products cannot offer anything new.
    3. I won't pay for "online service" just by principle: damn editor is not a "service", but a simple program! I start it, edit and close, that's it. Who the hell overcomplicate simple things??
    Finally if MS will continue their self-killing, they will reach the goal :)
  • cupholder - Thursday, July 11, 2013 - link

    If you need even 2 licenses for Professional, it becomes incredibly worth it. (It'd take you 8 years to cover that cost at full value)

    Heck, even one license makes it pretty worth it for that same reason. Families who need 2 versions with outlook and have a kid going to college? Worth it.

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