Microsoft is getting a bit of black eye in the press due to its about face on the ambitious Windows 8 platform change. While the unit numbers match up well against Windows 7, there has already been quite a bit of noise about how steep the learning curve is for the operating system. Apparently, Microsoft agrees and is doing a major re-vamp. Some people are calling it the biggest consumer product about face since New Coke. Could be. The question is whether Microsoft is making the right moves and whether this will keep the stock from floundering. I think these are the right moves and I will explain a bit why below.
I wrote a bit on Microsoft’s mobile strategy back in February. I want to make some follow-up comments based on the news flow in the past few days.
I read John Gapper’s piece on Microsoft’s snafu in the FT and I think he is right about a lot of it. And his basic point is that what Microsoft has done is release a mobile-centric marketplace to everyone of its customers including its cash cow legacy computer customers who are going to be supporting the company through a transitional phase. That’s a big no-no. And so now Microsoft is being forced to go back to the drawing board and re-do their operating system strategy.
What’s clear here though is that Microsoft gets it. The computing world is moving to mobile whether Microsoft likes it or not. And so the company needs to move to mobile too or they will get lost in the shuffle. The Windows 8 platform shift is Microsoft’s attempt to get them there. And while I will admit the execution was flawed, the idea was right: get people used to the new interface, which is more mobile centric, and it will make it easier for them when they move over to Microsoft-run tablets and cellphones. That makes sense; Microsoft was simply too heavy-handed about the switch – which is a departure from form given how conservative the company has been. So all in all, this is a good mistake because it says Microsoft gets it.
What I find most encouragig here is that, Microsoft seems to realize that tablets are where their bread and butter should be as they make the mobile transition. As I noted in the February piece, Microsoft needs to focus on tablets because the form factor is close enough to existing laptops that it can provide the best transition vehicle for the company, especially since the interface is the same touch-screen variety as it is for smartphones. Think of tablets as half smartphone, half PC and you can see why the tablet is a good focal point for Microsoft. The problem is how to develop for ALL of the platforms using the same operating system.
This is a bandwidth problem similar to the one I mentioned in the last post on Adobe. Adobe doesn’t want to develop for packaged software upgrades and iterative cloud application ste revamps at the same time. That is a lot of moving parts. And so they are moving wholesale into the cloud – a risky move to be sure. Microsoft is being a bit more conservative – and it has to since all of its money comes from the legacy platform. But this is why it has run into problems because it has moved too far toward the mobile platform and too far away from its legacy platform interface. The revamp will probably undo some of this, but not all of it.
The move to mobile at Microsoft is irreversible. And so Microsoft is going full bore into the cloud and mobile devices. The latest news that it is looking to buy Barnes & Noble’s Nook platform reinforces this. The merger news also reinforces the sense that Microsoft is very focused on beefing up its tablet offering because it knows that this is where the transition point will be. Unlike Blackberry’s CEO, Microsoft thinks that the tablet form factor is here to stay and I agree. Tablets and laptops will morph into one market and be the central line blurring mobile and PC. Microsoft has to be a key player in making this happen. And strategically, they are doing this the right way.
Some good Microsoft-related links are below. Also see the last tech post for more, especially as related to smartphones and Nokia.
“Shares of Barnes & Noble skyrocketed in early trading on Thursday after a report said Microsoft was offering $1 billion for the digital assets of the bookseller’s e-reader business.
In morning trading, shares of Barnes & Noble were up 18 pecent, at $20.99.
Investors appeared encouraged by signs that there might be a deal for the digital arm of Nook Media. The report appeared on the technology blog TechCrunch, which cited internal Microsoft documents.”
“Microsoft already has a stake in Nook Media, and now it is reportedly seeking to buy out the entire company. In Nook, Microsoft sees a shot at competing against Amazon and Apple – in a way it might not be able to do from scratch.
What Microsoft does need is a reading ecosystem for its Surface tablets and other Windows 8 devices. That’s why the company bought a stake in Nook in the first place, but so far it hasn’t resulted in much more than a Nook app for Windows 8 (released after Amazon launched its own Kindle for Windows 8 app). With full control over the Nook ecosystem, Microsoft can take advantage of some of the technology – including book discovery and “scrapbooking” features – that Barnes & Noble has built for these devices without being dragged down by the devices themselves. It would also presumably get access to Nook’s ebook publisher relationships, which lie with Nook Media, not with Barnes & Noble.”
“Unfortunately, I’m not yet convinced there’s a market for Windows RT devices. I fully understand that some readers may have purchased one and are quite happy with it. However, there’s no data to support that Windows RT is a success by any measure: Microsoft hasn’t yet broken out Windows RT license sales from Windows 8 sales.
And after spending time with Surface RT and other Windows RT slates, I haven’t been able to recommend them to anyone. It’s not because they’re bad products; I actually like the user interface and the hardware of the various models. But at a similar price point, it may make more sense to buy an Intel Atom slate that provides similar battery life and performance to RT tablets but also adds support for legacy Windows software.”
“Windows 8 launched to mixed reviews just over half a year ago, and Microsoft has dutifully pushed out nearly 740 tweaks and updates over the intervening months. Even so, rumblings of a sizable update (codenamed “Windows Blue”) have been making the rounds for months now, and we’ve finally got a firm idea of when to expect the first public preview.
Microsoft Windows chief Julie Larson-Green confirmed at the Wired Business Conference today that developers would be able to download and install the Windows Blue update preview in late June to coincide with the company’s BUILD developer conference.”
“A computer that people cannot switch off or find their way around is not useful.
Had Microsoft launched Windows 8 with the traditional look for PC users and its new tile-based interface for phones and tablets, as it easily could have, all might have been well. It would have kept its existing customers happy while gaining itself a foothold in mobile.
But hubris intervened and it decided to give everyone the mobile interface, no matter whether they were mobile users or – as with 99 per cent of customers – using a PC. They were offered a product designed for another use and, unsurprisingly, they were baffled.”