OPINION
Microsoft launches holographic computing
Windows 10 will also be a free upgrade for current Microsoft users.
PT0M0S 620 349Under new CEO Satya Nadella, Microsoft's culture has undergone demonstrable shifts impacting many aspects of the business: from how the organisation talks about its products and services, to the all-important issue of licensing and making money.
The latest Windows 10 announcement was a good example of this cultural change. Microsoft focused on discussing technologies from a user's perspective not widgets and technical specifications.
Microsoft's holographic headset. Photo: Microsoft
This signals the company is returning to a consumer-driven focus where competition is viewed as coming from outside forces, not the largely technical and internally competitive focus so evident (and destructive) under previous boss Steve Balmer.
While the launch was ostensibly about Windows 10, it is Microsoft's ecosystem story that is more telling.
The Redmond-based giant has finally realised the value of operating systems has declined in the hyper-connected device era. In the same way print media has suffered the devaluation of its delivery, but not its substance, operating systems have become nothing more than a means to an end. The value to the consumer of an operating system is minuscule, but the substance of the operating system to the products and services built onto that are of vital importance.
The headset can be used to control Windows 10. Photo: Microsoft
Microsoft had been slow to adapt to this new economic landscape. At the Windows 10 launch, the company's articulation of its evolving ecosystem suggests that the organisation is finally back on track.
Significantly, Microsoft hinted at new business models to come. The intriguing "Windows as a service" comment was no doubt carefully placed to stir up debate and consternation in the market.
Microsoft will be monitoring the chatter to identify just how far it can push an operating system as subscription service.
Adviser Joe Sweeney specialises in all things Microsoft. Photo: Supplied
In contrast, Android is continually updated for free, with the financial benefits to Google and its partners coming via an expanded ecosystem for advertising opportunities. Where does Windows fit in that type of world?
Of course, corporations will continue to pay for an enterprise-grade operating system with advanced management features. But will consumers pay a subscription to have the devices patched and updated on a continual basis?
Microsoft will be watching the commentary around this debate and fine-tuning its strategy for Windows. The very fact that it has raised this is a good indication that the organisation is carefully thinking about the issues, and their long-term financial impact.
True, some of the solutions presented in the Windows 10 launch were not exactly traditional. The extent to which products such as Cortana and Surface Hub will be successful are in question.
However, this does not mean these products should not be brought to market. One of the most fundamental shifts in the technology marketplace in recent years is that simply following a safe path of predictable technologies will quickly lead to oblivion. Blackberry is a perfect example of this.
Taking risks on "crazy" product ideas and being prepared to let them fail and fail quickly (think Google Glass) is the New Black for consumerised technology development.
While I would not say that Microsoft has nailed this new approach to innovation, it is at least demonstrating that it is prepared to take more risks to define a future market, rather than just mimicking the market.
Microsoft is clearly preparing for an era where its crown jewels – the Windows operating system and the Office Suite – will be completely and utterly commoditised. It is already making significant strides in migrating the business models for these traditional products through services such as Office 365 and Azure.
In particular, I have seen a significant ramp up of interest in Office 365 in Australia, not as a direct replacement for the traditional Office suite on the desktop, but as a replacement for the way in which productivity tools are procured. It is not the product itself, but the economic models of delivery that matter.
In summary, the Windows 10 announcement demonstrated that Microsoft still has some tricks to show us and that it can learn from its past mistakes.
The organisation still has a long way to go to regain the ground lost to the likes of Apple and Google. To be fair, Microsoft may not even need to regain this ground. All it needs to do is fully transform its traditional software products into services.
If it can do that, it will remain a tech giant and financial powerhouse for many decades to come. Its biggest challenge to achieving that transformation is its internal culture. So far, the signs are good that its culture is changing.
Joe Sweeney is an adviser with research and consulting services firm IBRS.
