With the release of Windows 10, some are pointing to a new era of relevance for Microsoft. Others believe that a revamped Office experience will do the trick.
Both visions are completely wrong.
It's not that Microsoft is doomed. As the world shifts to mobile, Microsoft's old business is absolutely, irretrievably doomed. But with its increasing strength in cloud, Microsoft's new business looks set to grow. Because cloud is really a mobile strategy. Does Microsoft realize this?
Office won't save you, crying won't do you no good
Mark Kaelin posits that Microsoft's big vision—its grand, winning strategy—is to double down on Office:
"Microsoft is a software company first and foremost, and that is what the company and all of its employees should be improving, innovating, and selling. Under this strategy, Office 365 is the flagship product and productivity is the essential service of Microsoft."
Lost in this assessment is what consumers actually think, and what they'll use. This is a glaring, fundamental mistake.
Because, as Andreessen Horowitz's Benedict Evans explains, Office (and Windows) don't resonate like they used to, and Windows 10 doesn't significantly improve that fact.
"In the past, leveraging Windows and Office was the key to Microsoft's success, but that didn't work this time. Windows had actually ceased to be the dominant development platform in the late 1990s with the rise of the web (though that mattered less at the time since you still needed to go online, and for almost everyone that meant a Windows PC). Hence, though a big part of Microsoft's mobile strategy has been to push towards common code across Windows on the desktop and on mobile, so that it's easy to write apps for both at the same time, in practice that's largely irrelevant. The apps that people want on smartphones are not being written for desktop Windows anyway."
Or, as he summarizes, "The rise of SaaS services and new productivity models on one hand and more and more capable mobile devices on the other means that Office, and hence desktop Windows in the enterprise, is also probably a declining model."
Microsoft has lost in mobile. Utterly. Completely. Microsoft is losing in "office productivity" too, because it can't help but approach the problem through an outdated lens.
Mobile makes things different
In a separate post, Evans highlights how mobile is changing the way we think about productivity. Instead of a "manilla envelope" filled with documents we've carefully assembled and now distribute around the office, content and the communication thereof get mashed together into things that start to look like Slack... or even email.
In this way, "PowerPoint gets killed by things that aren't presentations at all. The business need is met, but the mechanism changes."
I don't think there's anything sacred about Office. My children certainly don't see any reason to use it, and by the time they enter the corporate workforce, I don't believe Office will even exist (and they're actually not far off from that day).
No, something mobile will displace the thoroughly desktop-oriented Office.
Looking at how the rising generation uses smartphones, does anyone seriously believe this mobile trend can be stopped?
Fortunately for Microsoft, even if its old-school Office paradigm dies (and it will), Microsoft has a strong hand in shaping the future of mobile... from the cloud.
Azure is Microsoft's mobile strategy
Microsoft may or may not realize this—it's a smart company, so let's assume the answer is "yes"—but Azure is its best answer to mobile, not Windows 10.
Not that Microsoft CEO Satya Nadella is through pitching Windows as The Answer. Ashe told ZDnet, "You talk to somebody like Airbnb. It might be more attractive, given our 3% share on phone, for them to actually build something for the desktop and for the Xbox. And by the way, when we hook them on that, we have a phone app."
This idea of "hooking" developers on the ease of writing Windows apps that span device form factors is not going to work. See the Evans quote above. "Windows is not a point of leverage for Microsoft in mobile," he concludes, no matter how you gussy it up. It's just not.
But Azure (read: cloud) services? Definitely maybe.
We used to think of hardware as "the thing that runs my code." But then the web came along and largely rendered the operating system, and the hardware running it, obsolete. While we're not there yet in mobile—native apps are the rule of the day—we are definitely enmeshed in a world where native code matters far less than the cloud data feeding it.
On this score, as Eric Knorr points out, Microsoft "keeps adding features [to Azure] to make web and mobile development easier."
Microsoft seems to be looking to Windows 10 to revamp its desktop and mobile fortunes, which is a losing strategy. But Azure, precisely because it will help enterprises build compelling cloud services that can feed data to mobile (and desktop) devices, looks like a winner.