I actually quite like Microsoft. Always have. Not a hugely cool and popular thing to say – well maybe not in the past – but now… things have changed.
Well let’s rephrase that – I’ve always admired them - they’ve stuck to a strategy of conservative, structured growth and acquisition during a period where they have seen GAFA grow in almost all cases exponentially. Hold on - maybe I’ll go back to liking them – the Surface Pro I have is excellent and I love Office 365, X-box and LinkedIn.
Could be that my ‘flip-flopping’ highlights the Microsoft conundrum – they produce strong products, many of which still underpin a huge number of individuals and businesses but are they the future? Are they the past? What do they do? What will they become?
Let me try and cover off my thoughts on them and why I think they could well be a major beneficiary in the current era of ‘fad’ acquisition, serious privacy concerns and the explosion of social media engagement and revenue.
Their strategy (as I see it) isn’t cool and certainly doesn’t grab the headlines – but when their growth is running at 200% over the last five years compared to Apple’s (114%) they must be doing something right. They are worth $778 billion (just to set a figure), have appointed a CEO who has empathy, integrity and a moral compass and are making (in the main) smart investments.
They seem to be looking at connecting technology across home and work. This differentiates them from Google, Amazon and Facebook - to me, this seems a pretty strong proposition, they are focusing on subtlety being the business that makes life easier (whether playing, connecting, communicating or developing) as opposed to becoming the ‘one place’ an individual will go to for shopping, search, social etc…
This tactic shows that they recognise one of their major weaknesses - namely brand loyalty, perception and reputation. They seem to be saying ‘Why take on GAFA in a straight fight when we don’t need to?’ – no smart speaker, no ‘personal’ social platform, no content creation and curation (except some game titles). It’s a good old-fashioned case of ‘we’ll control what we can control’.
Their recent purchase of Github for example – may well have startled and annoyed some developers – but Microsoft are in effect, doing what devs have been moaning at them to do for years – investing in Open Source tech and have the benefit and now own the number one development repository and platform for techs.
The lesser publicised but just as fascinating acquisition of PlayFab increases their ability to create and develop games in the cloud (Azure), reducing development and deployment time and gives them access to a platform used by Disney and Rovio and connections to 700 million gamers…
They’ve purchased Yammer, integrated it into Office 365 and used the technology to improve their corporate chat platform. Don’t forget Mojang – owner of Minecraft which allows them to connect directly to millions of young, potential developers and creatives.
As well as Skype. LinkedIn and now Github.
Microsoft are creating their own eco-system based on creating those connections at home and work.
A cool uncle.
Under the leadership of Satya Nadella, a new calmness, intensity and innovation focused on clear objectives seems to have been the order of the day. Microsoft have been around for 40 years or so and (much like Apple) are becoming more comfortable with what they know and what they are good at, although unlike Apple (who I think are going through some customer and product pains now) they have been through a long period of ridicule and being broadly ignored.
I think that they are rapidly becoming the cool uncle – you know the one that no-one is quite sure what he does for a living, but you always get a great present from him – and all your parents say about him is that he went “off the rails for a while in his twenties”.
Microsoft know what battles to fight, know when to walk away, know what they were and have a good idea on what they will become – I’m not totally sure that all the other large digital firms have that same assurance.
Let’s take a purposely simple scenario of how Microsoft’s plans could manifest themselves on a day to day basis. Let’s focus on LinkedIn and Microsoft Dynamics – we have one that is a professional, social communications network and another which is a CRM and sales enablement tool.
You communicate with somebody on LinkedIn, their profile, history, groups, articles, connections, shares etc. are integrated directly into Dynamics that enable you to have a level of behavioural and interest data that - to be honest - not many CRM’s can gather, certainly not those that only link to tracking user clicks on a website.
You have a conversation with the contact via Skype – with the call information also recorded into Dynamics and continue the sales engagement process using Office 365 all hosted on Azure. You maybe have one inclusive licence fee for a ‘business professional’ or you lease access to the systems as and when you need them.
Sure, this is a purposely simple process – without considering that you may be doing all this work on a Surface, whilst the development of your product being completed and committed on Github and all the while the devs and your kids are (in your downtime) kicking games off that are hosted and built on Playhub on their X-Boxes. But I hope it shows in a small way the opportunity that Microsoft are developing for themselves.
Maybe Microsoft will never be as ‘cool’ as Apple, never be seen as ‘innovative’ as Google, as obviously embedded in everyday life as Amazon but they will be there making huge amounts of profit, delivering more products that are really useful and beneficial to a huge audience in the everyday.
I like them, I now respect them and I trust them (well more than Facebook and Google) – ahhhh… that’s and idea for a subject for another blog..