Does Microsoft Have Its Mojo Back?

Has Microsoft regained its mojo?


When new CEO Satya Nadella introduced Office apps for iPads on March 27, it was his first public appearance after 52 days on the job. Commentators praised Microsoft's firm, arguably overdue embrace of cross-platform tactics. But by his 60th day, Nadella had gone much further, repositioning Azure as the clear center of the Microsoft universe, with Windows shifted to a supporting role.


Between the Wednesday and Thursday keynotes at Microsoft's Build conference, company execs spoke for more than six hours. At face value, the presentations fleshed out Nadella's 'cloud-first, mobile-first' strategy -- from Cortana and other attempts to become relevant in mobile, to dozens of new Azure tools aimed at developers of all stripes, including those who develop for iOS and Android but not Windows.


But, on a deeper level, the keynotes also explored the diminution of Windows licenses as a revenue source and their replacement by software, services, and virtual infrastructure. These are not minor shifts, but they are necessary. Among mainstream users, Windows' stature isn't what it used to be.



[Wondering about your best option to replace WinXP? See Windows XP Game Over: 9 Upgrade Options.]

Under Nadella, Microsoft has implemented the changes while somehow projecting both confidence about its future and candor about its challenges -- a tricky balance. Given this context, yes, Microsoft has its mojo back.


But can Microsoft reclaim its former glory? Steve Ballmer's Windows 8 strategies created media scorn, investor derision, and relatively few happy customers. Nadella didn't create this mess, but he's inherited it. His ideas are comparatively fresh and different, but they don't make existing dilemmas disappear, at least not overnight. For starters, last we heard, Surface tablets still aren't profitable. Windows XP users, who will lose official support Tuesday, also outnumber Win 8 users by more than two to one, according to Net Applications.


But I'll come back to all that. Nadella didn't control the hand he was dealt, but he did control the agenda at Build -- and he made the most of the opportunity. Here are some of the ways Microsoft impressed.


1. Free Windows licenses for smartphones and tablets with smaller screens. Arguably a long time coming, this move could help Microsoft tap into the vast network of global manufacturers who have pushed Android to prominence. It should also result in lower device prices. Most important, it indicates Microsoft sees more growth potential in its apps and online services than in Windows itself. In Nadella's Microsoft, Windows is the conduit through which these profit streams flow, but not the source of profit itself.


2. The Start menu is coming back and the desktop isn't going away. On both functional and symbolic levels, Microsoft's new Start menu could restore faith among the longtime users repelled by the Modern UI. The same goes for Microsoft OS chief Terry Myerson's assurance that the company isn't abandoning the desktop.



3. Windows has a future in the Internet of Things (IoT). Former Microsoft CEO Steve Ballmer famously missed the mobile boom, but by playing up IoT, Microsoft showed its determination to catch the next big wave. At both the iPad event and again at Build, Nadella championed IoT-centric themes, describing a future defined by machines that perceive their environments, digitize the information, and turn the data into useful insights. Microsoft also showed off a new 'Windows in the car' prototype during a Build session, suggesting the company isn't going to simply roll over in response in to Apple's CarPlay.


4. Cortana looks competitive from day one. Cortana got more attention than any single topic during Build's opening keynote -- and for good reason. Windows Phone's lack of a digital assistant


Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio


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