Office 365 is now Microsoft 365. What’s Microsoft up to Now?
Microsoft is a company in resurgence right now. Last year the company overtook its more illustrious rivals, Apple, Google, and Amazon, to become the most valuable American company valued at USD 1 trillion. Today, at USD 1.27 trillion, it lags just behind Apple which is valued at USD 1.3 trillion.
In April 2020, Microsoft officially rebranded its Office 365 productivity suite to Microsoft 365. While this is not the first time that Microsoft has rebranded its products – the MSN Search to Live Search to Bing re-branding fiascos come to mind, however, occurring only a few months after it had hit its long coveted target of 1 billion devices powered by Windows 10, and at a time that its commercial strategy is working pretty well, the question arises – What is Microsoft up to now?
Some customers might yawn when told that they will continue to get the same familiar products – Window 10, Office solutions such as Word and Excel, OneDrive, Azure, etc. – at the same prices. But this is different.
Microsoft 365 comes with new attractions such as Microsoft Editor, Presenter Couch, PowerPoint Designer, Teams, and Family tools. Microsoft’s idea is to improve the applications that users are already familiar with by augmenting them with AI – artificial intelligence – capabilities. Whereas, for example, users are familiar with a grammar checker that highlights bad grammar and incorrectly spelled sentences in Office products, Microsoft Editor can reword one’s sentences to improve style, citations, and decipher acronyms. So, you get same applications, with improved functionality, but at the same prices.
Microsoft 365 brings together multiple solutions for different platforms and devices into unified productivity platform bundles for its customers. Despite Microsoft’s chequered history with software bundling – the reason it shied away from the strategy for many years – but, lately, after the ascent of Satya Nadella as CEO in 2014, Microsoft has been experimenting with that strategy with very promising results.
The decade before Nadella was a troubled time for Microsoft. The Redmond technology giant missed opportunities to take leadership positions in mobile, social networks, and search engines revolutions. As a result, it has been playing catchup to the likes of Google, Apple, and Facebook in those sectors. By mid-2010s the success of Android was also threatening Microsoft’s traditional stronghold – the desktop PCs market segment – since business was moving to mobile devices. The company's attempt to correct that by purchasing Nokia turned to be a costly mistake and it made a loss of billions of dollars. It was therefore imperative for Microsoft to find an alternative to its 'Windows’ anchored strategy' fast.
While Microsoft had stated that its future lied in subscription-based software model from as early as 2000, but it struggled to let go of a lucrative Windows business under Steve Ballmer’s leadership. Nadella turned that around and accelerated that necessary transition by opening Microsoft’s services to other platforms such as Linux, iOS, and Android, by embracing cloud-based and infrastructure-based services. In 2018 Microsoft acquired Github, the world’s largest repository of open-source software, to encourage developers to produce applications based on its platforms.
Moreover, central to Microsoft’s strategy is Bing. Bing, long considered as a laughingstock of the search world, it has also witnessed a significant resurgence lately. Microsoft’s stated approach was to differentiate Bing from Google by placing it where people are. This meant to integrate it with its sizable desktop applications, other operating systems such as iOS and Linux, social network apps such as Twitter and Facebook, etc.
Furthermore, Microsoft purchased LinkedIn to boost its B2B intelligence and gain ad revenues. It augmented Bing with AI – thereby providing features which are not even available in Google. It went as far as opening Bing up for third party developers. As a result, there have been a proliferation of new solutions that are based on Microsoft’s technologies, such as a privacy-minded search engine, DuckDuckGo, something that cannot happen under Google.
The current re-branding exercise is an attempt to consolidate part of those gains by unifying the platform – that is, by bringing together the many applications that people use for their work, social, family and gaming into a single Microsoft 365 subscription-based platform. Therefore, regardless of where people are or which devices they are using, customers will no longer think of Windows 10, Office 365, or Azure, but just Microsoft 365.
With this move Microsoft hopes that customers will consider Microsoft 365 as greater than the sum of its parts, thus simplifying their purchase decisions and increase its revenues in return. This way Microsoft can lock-in users to its subscription services and securing those much-coveted long-term recurring revenues from them. While this may not mean much from the customers’ perspective at this point, but for Microsoft future this is everything.
‘What’s in a name?’, Shakespeare wrote in Romeo and Juliet. Sometimes, as in this case, it is everything.
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