Microsoft: what does it mean to be the productivity and platform company in a mobile first and cloud first world?

Microsoft has had various different mission statements over the years. In this article I will try to explain what our current mission means, how it changed and why that is important.

Depending on your age you might still remember one of Microsoft′s first mission statements, a PC on every desk and in every home. This was all about democratizing computing for the masses, from consumers to SMB′s.

During the Ballmer reign it was to enable people and businesses throughout the world to realize their full potential.

Then with the reorg that Ballmer started in July 2013 Microsoft moved to creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most.

So Microsoft became a devices and services company. This was an important change. Microsoft is a software company. The issue with software is that the world is changing to a new form of monetizing software. Advertising based (Google), integrated through hardware (Apple), or sold as a service (Salesforce). It will become more and more difficult to sell software via licenses and maintenance fees. So under Ballmer Microsoft was on a course to a mixed business model of being like Google, Apple and Salesforce monetizing through Advertising, volume first party hardware (Nokia, Surface) and SaaS models (0365).

So how has the Microsoft mission changed under Nadella?

Microsoft moved from being a devices and services company under Ballmer to being the productivity and platform company for the mobile first and cloud first world under Nadella.

But what do these 4 words really mean?

Productivity: productivity has always been associated with Office. A lot of people see this as the best and only productivity suite but in general only power users use more than 10% of the available functionality. People don’t fully understand how powerful the latest Office versions are. When I show people how I work with outlook, Lync, Onedrive, Yammer, Onenote, multiple monitors, etc. they are amazed. My wife, who happens to be in the Microsoft ecosystem (Windows laptop, a Hotmail account, Windows tablet, Windows phone) has been completely blown away by the level of integration of the Microsoft platform. She can login on any device we have at home, and it is as if she were using her own PC with her settings, her interface, her documents (Onedrive). Same on her phone. This is something our competition currently can′t do.

But what does the new productivity mean for Microsoft? As Satya puts it: “it means putting people at the center of everything. It means to enable every individual to get more out of every moment of their live while harmonizing the interests of individuals, IT and developers. We want to make these digital work and life experiences shine. We want to make computing more personal”.

This is reflected for example in how Cortana works (And Cortana is an example of how Microsoft is getting better at using key assets across Enterprise and consumer. Cortana, as all Xbox users know is a character from the Halo game franchise).

It is also reflected through new social and machine-learning technologies that Microsoft is including into O365. The lines between Exchange, SharePoint and Yammer will be blurred, and social collaboration will become more of a centerpiece. An example of this is Office graph & Delve. Delve displays information based on the work people are doing and the people with whom they are engaging. With Delve users won't have to remember where information is stored or who shared it. Think of Delve as a mix of LinkedIn, Facebook and Flipboard but for professional use.

The "Office Graph," is the machine-learning piece. Office Graph analyzes content, user interactions and activity streams and maps the relationships among these technologies so that it can surface the most relevant content appropriate for each user. Graph moves productivity beyond people and documents. Microsoft wants software to learn from an organization and then to show to you what's relevant to you.

Another expression of this new productivity is the surface pro 3. When you pick up a Surface pro 3 it is clear what Microsoft can do uniquely. You can click on the pen, get into OneNote, and directly write your thoughts. (It took me several years to start with OneNote but now I can’t live without it. It is probably the most important Office app for me now). Or take Office Lens on the phone, you can take a picture of any piece of text, have it OCR′d, indexed and it is searchable and in OneNote.

So the new productivity is focused on things like machine learning and social through Office Graph, Delve, Cortana. All of this will be available to users as more and more of them move to O365. Furthermore this will be available across multiple screens and multiple ecosystems.

Platform: You have to think of platform in the broader sense. Microsoft is building an operating system for all human activity, a digital graph, centered on people. Microsoft focusses on dual use (people should be able to use the same technology at home or at work). Microsoft will build these experiences ubiquitously which means that every home screen out there, every device out there is going to have multiple Microsoft icons and each one of them is an entry point into the Microsoft digital work life eco system.

There will be two platforms, one for cloud (Azure) and one for devices (Windows). Windows will be the only OS that is going to have consistency of user experience for screens of all sizes. It is going to have consistency because of universal windows apps for developers. Microsoft will aggregate all of windows into one ecosystem, one store, one commerce system, one discovery mechanism.

Cloud first: Microsoft talks about the Cloud Operating System and is building an enterprise infrastructure backbone for REAL IT. Microsoft will run a mega cloud service with many datacenters in many countries and will also make that server infrastructure available for others to build their cloud.Microsoft is the only company to be a Leader in all 4 Gartner cloud Magic Quadrants, with a unique positioning at the intersection of Hyper-Scale, Enterprise Grade experience and fully-fledged Hybrid Cloud strategy.

O365 is the fastest ever growing commercial offering from Microsoft. O365 is used by 60% of the Fortune 500 and the growth is expected to accelerate, as the platform is opening up across other platforms and form-factors (e.g. launched on iPad, SFDC and SAP partnerships)

Azure is used by 57% of Fortune 500, and attracts 8000+ new customers per week. The Azure strategy has evolved from being strong in Microsoft/Windows-only environments, to truly embracing multiple vendors/platforms/OS’s (reflected in name change from Windows Azure to Microsoft Azure), making it highly relevant in multi-platform environments.

Mobile first: Microsoft means Mobility first when it says mobile first. Mobile first is not about one form factor. It’s about multiple devices. You are going to have devices in your pocket, you are going to wear stuff, you will move between devices during the day. You may start a task in one place and finish it in another place. All your documents, all your preferences have to roam. It is all about mobile scenarios not about one device form factor.

So how has the mobile device strategy changed from Ballmer to Nadella? What Nadella has done is change the charter. So from creating a lot of first party devices and monetizing through that like Apple to using our first party devices to show how the Microsoft software can shine on first party hardware and at the same time rely on other OEM′s to build phones on the Microsoft platform. You might have seen that the phone OS is now free for other 3rd parties, and that Microsoft have signed up a lot of new OEM′s recently.

So basically Microsoft has moved from wanting to emulate Apple, Google and Salesforce in one single business model to emulating Salesforce with a bit of Google and a bit of Apple (but with hardware that is more a showcase for what can be done with our software, with the exception of Xbox where Microsoft does do high value volume hardware). Also we no longer want to win every battle. Instead we are opening up to multiple OS′s and ecosystems and want to bring what is best of Microsoft to those.

So what is the Microsoft Differentiation and where does Microsoft see its competitive advantage:

• Consistency of user interface of the Microsoft platforms

• Productivity through a focus on more personal computing supported by dual use. (With privacy and security as the single biggest differentiator against competition)

• Microsoft wants to Make IT hero′s again through dual use scenarios but with single pane management and security

• Democratizing big data. The one capability that Microsoft has and that no one else has when it comes to data is to put it in the hands of people where they need it most

How has Microsoft shown this to the market so far?

• Office on Ipad, before having a touch version on Windows 8

• Windows for free for device sizes of 9 inch or less

• A stripped down version of windows which comes with Bing and some other services with a much lower cost to OEM′s to compete in the below 300$ cost PC′s

• Onedrive and Onedrive for business integrated first on android before Windows

• SAP (Azure, Office and mobility), Salesforce (Office and mobility) and Oracle (Azure) announcements

And the market seems to like the ′new′ Microsoft direction as the stock keeps on going up. In closing I would like to share a statement from Satya which has resonated most with me:

There is no more enduring mission then driving productivity for individuals, organizations and economies. That is what the power of computing is. That is what platforms do

Disclosure: I am a Microsoft employee. I have no privileged access to roadmaps, technologies and strategies. This article has been written with the help of publicly available information and the Satya references are taken from his session at our WW partner conference and from publicly available information. This article is my own personal attempt to explain the ′new′ Microsoft and is therefore my interpretation and is not officially endorsed by Microsoft.