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Ballmer confirms shift to devices and services

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  • Ian2

    OK, Maybe not something we didn't all already know but:

    Microsoft CEO Steve Ballmer made it official: The company is shifting its model to focus on devices and services ahead of the Windows 8 launch. The importance of this shift can't be understated: Microsoft's revamp will make or break the company.

    Ballmer said in a shareholder letter:

    Last year in this letter I said that over time, the full value of our software will be seen and felt in how people use devices and services at work and in their personal lives. This is a significant shift, both in what we do and how we see ourselves — as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses. The work we have accomplished in the past year and the roadmap in front of us brings this to life.

    http://www.zdnet.com/microsoft-radical-shift-to-devices-risk-ahead-of-windows-8-7000005540/?s_cid=e539

     

     

     

  • DeathBy​VisualStudio

    Ok then... That makes sense. Away from PCs and locally hosted servers and on to devices and the cloud. I guess Steve Jobs was right. At least Microsoft has a huge leg up on Apple on services and  the cloud

    It'll be interesting to see how the corporate world will respond to this with their heavy investment in PCs and related software. Do they all transition to Microsoft "devices" or do they look into other options? Is Microsoft thinking when it's time to upgrade PCs corporations will just select a Microsoft tablet instead of a PC and maybe pickup WP8 while they're at it? WP7 wasn't business friendly (in terms of options for writing in-house software) and I surmise why in part it was a big flop.

    What about OEMs? When Microsoft says it's a "devices" company does it mean direct competition with OEMs? They already have the surface tablets that they said weren't intended to harm OEMs sales.

    Seems like Microsoft is burning bridges left and right with developers, OEMs, and now possibly corporations. I wonder what will rise from those ashes?

    If we all believed in unicorns and fairies the world would be a better place.
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  • exoteric

    Well from a strategic point of view it's pretty powerful to provide both computing (Azure), services (Live) and devices (xBox, Surface, et al.; user experience) - and everything in-between. The end-to-end IT provider.

  • SteveRichter

    Why do devices have to have anything to do with the desktop and servers?  The point being, why change the desktop to accomodate devices? Sure, consumers are not going to spend as much time on the desktop as they have in the past. But there is still plenty MSFT can do to keep the desktop viable. Like making it so apps are free of malware.

     

  • kettch

    I don't see most IT shops doing anything other than supplementing their PC fleets with devices. If an organization decides to go further, it might be to buy x86 tablets and docking stations. Where I work, all of the office workers are now on large dual monitor setups and none of them would care to go to anything less.

    Also, keep in mind that a PC is a device. Devices and services is just a way of saying that if you provide a strong set of services, they can be accessed through any device. In the case of a service like Office 365, you get a solid back-end service with local software for either desktop or mobile devices.

    I think an important step in all of this will be the ability to plug Azure roles into your 365 instance for custom applications. It might be possible now, but as an easily configurable supported scenario it would be killer. I know a few small business who will be all over that.

  • TexasToast

    The strategy has not changed.   Basically follow someone else (this time Apple again) and do it better.  That is what they have been doing for 30 years for all kinds of products, developer tools, languages, office products, game consoles etc. (follow but improve then dominate)

    The key word here is focus. They will focus on this stuff.  Again, this does not mean the bread and butter PC and all that goes along with it is dead.  I think it is a good thing.   The PC is just fine and let it just stabilize so we do not have a moving target all the time for our applications.   We have a good OS in windows 7 and great tools to use.   (Let it just be for 3 years) .    (I need my apps to just make money without me touching them too much)

    Phones and tablets will be a moving target.  Dont hang your hat anywhere as a developer here.  Let things churn and enjoy the chaos because this is the fun part about having a career in this field.  I get bored easily so I like new stuff.  Windows phone has been all over the place so I hope windows phone 8 is close to done this time.  Tablets I think have some more churn to go .   Windows 8 on tablets still does not feel like it can take out the IPad.    The Iphone is going to get some competition from Microsoft and Google.  They are already feeling old and you can see it in the media.   Watch stock price drift lower.   Google and Android could really use a nicer development environment for app development.   Its a bit clunky.   Anyway,  looks like more fun to come.

  • vesuvius

    @SteveRichter: Because this model allows them to make far much more money.

    The desktop is now seen as a mistake in its business model, as it allows companies too much freedom, see here and here

    Basically, moving on from now, Microsoft will own at least 20% to 30% of everything, and will make it difficult for people not to adopt the Apple model.

    This is good news if you are a shareholder  with MSFT of course, and the letter posted to above is what any company that exists to make money should do and has done.

    Microsoft will be pushing for all their server infrastructure to be cloud based, and specifically Azure based, which is where all their best people have gone including Guthrie and Zander, and their finest lawyers will be working to find a way to get businesses to move to Azure.

    In a way, Windows as it stands now, and in the future will be just a thin client to Azure, and I think they will move to a cheap or even free version of Windows (upgrades are available now for $40) where they will make most of their revenue from Azure subscriptions from all their home users. No need to worry about ever losing any data as your desktop, tablet and phone will all be connected to Azure. It is just too large a market for them to ignore and will allow them unprecedented growth.

  • TexasToast

    @vesuvius: I left out the Azure strategy but agree with you on what you just stated.   I think companies are really getting tired of paying for IT maintenance on all the servers and backups.  Azure does the upgrades and backups for you.   The heavy activity is in cloud services.   Even personally I think we are getting more comfortable with the cloud and keeping our digital valuables backed up there.

    But to SteveRichter,  there will always be intensive apps that still run as a standalone client and this wont disappear.   I used to like google and bing maps until I lost my connection to the internet travelling to Alaska.  GPS still worked.   Thats where a standalone map application was very valuable.    I dont think we always need a live app.   

  • spivonious

    Isn't this just a rephrasing of their "three screens and a cloud" vision from ten years ago?

  • cbae

    I think Microsoft is convinced that they can build an entire OS with Javascript served up from Node.js servers hosted in the cloud. They're going to rename Chakra "Windows 9".

  • MasterPi

    , DeathBy​VisualStudio wrote

    Seems like Microsoft is burning bridges left and right with developers, OEMs, and now possibly corporations. I wonder what will rise from those ashes?

    More bridges, possibly stronger ones? An emphasis on services means that MS can extend its influence into different platforms/devices that couldn't run MS software.

  • vesuvius

    , TexasToast wrote

    @vesuvius: I left out the Azure strategy but agree with you on what you just stated.   I think companies are really getting tired of paying for IT maintenance on all the servers and backups.  Azure does the upgrades and backups for you.   The heavy activity is in cloud services.   Even personally I think we are getting more comfortable with the cloud and keeping our digital valuables backed up there.

    No one I have worked for in the last few years would ever relinquish their entire infrastructure to the cloud but would do in parts. For example, how many companies would like all their financial information kept in Redmond or around the world? All the bonus information of the executives, and salary information of everyone in the company. That simply is not going to happen!

    The biggest issue that Ballmer has is infrastructure i.e. broadband. How many companies and home users in the US have internet connections bigger than 20MB, something essential to Azure's success?

    Broadband infrastructure here in the UK and across Europe is still pretty poor, so Azure may exist, but 60% - 80% of people are still using infrastructure that is slightly better than 56/KBs dialup to send data to the cloud, and as more services like Netflix, TV and Games go online, bandwidth is an issue.

    This is not to say this will always be an issue, but right now, uptake of Windows 8  with the SaaS vision will be tardigrade. Microsoft will need to be patient, as Apple have won the tablet and phone market by going further than Microsoft have, and peoples brand loyalty to Apple is like Heinz beans, Coke, or even Andrex toilet tissue. Just as I was seeing a major number of projects move to WPF, Microsoft sent negative messages out. Look at Windows 8 now, clearly 4-6 years away (two releases) from rivalling any of the competition.

    People need to interpret Ballmer's letter as long term, because if you think there will be a million Windows 8 apps by next Christmas (2013) that are qualitatively comparable to anything Apple or Android have, then you will be disappointed.

  • vesuvius

    , MasterPie wrote

    *snip*

    More bridges, possibly stronger ones? An emphasis on services means that MS can extend its influence into different platforms/devices that couldn't run MS software.

    Your statement is a complete contradiction, as companies like DevExpress, Infragistics and a plethora of partners including the entire PC Games market, are seeing their core products swallowed by Redmond in Windows 8.

    Quite where possibly stronger ones comes from, is practically insulting notwithstanding naiveté. There are casualties in the present change of direction (insert @ Bass stating why proprietary software development is bad!), and there will be no "kiss and make up", business is not a "chick flick"

  • RobGreenly

    This is a terrible idea. Microsoft going into the hardware business will drive out all the OEMs. And soon, the only one making Microsoft hardware will be Microsoft.

    I hope MS learns from Apple. If you want an iOS device, you have to buy it from Apple. A monopoly can only drive up the price. Consumers lose.

  • cbae

    , RobGreenly wrote

    This is a terrible idea. Microsoft going into the hardware business will drive out all the OEMs. And soon, the only one making Microsoft hardware will be Microsoft.

    I hope MS learns from Apple. If you want an iOS device, you have to buy it from Apple. A monopoly can only drive up the price. Consumers lose.

    If Apple allowed OSX to be installed on non-Apple hardware, you'd have dozens of OEMs producing OSX-based machines to compete against Apple. As long as Microsoft allows you to sell hardware with Windows installed on it by merely paying a licensing fee, you're going to have hardware companies selling Windows-based hardware regardless of what Microsoft does.

  • TexasToast

    , RobGreenly wrote

    This is a terrible idea. Microsoft going into the hardware business will drive out all the OEMs. And soon, the only one making Microsoft hardware will be Microsoft.

    I hope MS learns from Apple. If you want an iOS device, you have to buy it from Apple. A monopoly can only drive up the price. Consumers lose.

     

    Microsoft designs it and farms out the manufacture.   It is almost the same analogy as running a fabless circuit design house.    I dont know for sure if the OEM's will care that much if they can be one of the sources.     I think where Apple won this battle was that when you bought the hardware, everything worked and was qualified.  Grandma does not call tech support as often.   Its easier to do this with tablets and phones.   PC's still enjoy a build your own environment and this will NOT change.   Too many varieties of a PC in all kinds of weird places where they run strange hardware for specific purposes.  Ships, Factories, Sewage pumping etc.  (there is more than just the web for computers to be useful)

    So in the long run Microsoft has got it right as far as where to do the new stuff.   The PC is more mature and needs less investment.   It will be nice to have a Microsoft store right next to an Apple store and see them duke it out.

  • MasterPi

    , vesuvius wrote

     and there will be no "kiss and make up", business is not a "chick flick"

    Right. Businesses, being objective, money-grabbing machines, will continue to create Windows-based PCs regardless of competition from MS in the space.

  • RobGreenly

    , cbae wrote

    *snip*

    If Apple allowed OSX to be installed on non-Apple hardware, you'd have dozens of OEMs producing OSX-based machines to compete against Apple. As long as Microsoft allows you to sell hardware with Windows installed on it by merely paying a licensing fee, you're going to have hardware companies selling Windows-based hardware regardless of what Microsoft does.

    I've heard that Microsoft charges $99 to the OEMs for Windows 8, and being closely tied, Microsoft can charge themselves a lot less. So, the OEMs can never compete with Microsoft on price irregardless how high they raise the price.

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