The 21st century has been less than kind to the company that made personal computing possible. Having dismissed the web as important and having failed to ‘get’ the trend towards social Microsoft’s name, these days, is more frequently associated with operating system issues in Windows, than cutting-edge products and services.
Yet, the company, might just manage to surprise us. In June it picked up Yammer for an Instagram sized price tag and, at the same time announced Surface, the Windows OS tablet computer which could possibly be an iPad killer. On their own, each is just another, expensive move made by a company trying to redefine itself. Taken together, however, they reveal a lot more.
The Microsoft Strategy for the Web
It is clear to any observer that Microsoft is not a market leader when it comes to getting a product to the public in the connected web age. The Redmond giant may have led the way in personal computing but when it came to the next phase of empowerment the company lost its way.
Products intended for consumers were marked by poor marketing and an inability to get the target audience excited. As a result Microsoft’s recent history has been marked by flops. The original Windows CE, a robust, light environment which could have powered phones and mobile computing devices, died from neglect and poor market uptake. The original tablet computers, introduced by the company at the very turn of the century, failed to take off and Zune, its music player touted to be an iPod-killer, was itself killed off as consumers voted with their wallets and bought rival products instead.
What Microsoft does ‘get’ however and where it excels is in the enterprise sector. There the embedding of its products in the Office Suite environment creates the kind of business sense which large organisations, used to making decisions with productivity, efficiency and official support as criteria, are comfortable with. One could argue that with the exception of the Xbox, which has managed to gain a following, Microsoft is sustained by corporate, rather than private customers.
This is exactly why both Yammer and Surface are generating so much excitement.
Microsoft is Staging a Comeback
Squeezed by both Apple and Google in the corporate sector and outgunned in the consumer products market Microsoft knows that it needs to come up with something that will give it a fresh edge. Yammer is a platform which allows any company to create a fully-fledged social network within the firewall of the company environment.
It is easy to set up, requires no more than a company-domain name based email address to join and even allows the network administrators to create hierarchical access and secluded areas where the ‘conversation’ which goes on within a social network environment can become even more private for some of its users.
Microsoft forked out $1.2 billion to buy
it because it rightly sees it as the tool which is most likely to help legacy businesses transform themselves into the social business models
of the future. Microsoft has already taken Yammer into its Office suite products indicating that there will be more productivity tools integration to come in the near future.
To quantify the importance of this imagine a social network like Google Plus or Facebook with full integration of the Microsoft Office Suite and Hotmail, backed by official support from the company, and you begin to see why this is going to be attractive to large companies already familiar with Microsoft products.
Similarly the Surface tablet computer, for all its slickness and fast operating system is designed to bridge the gap for corporate customers looking to transition from the office desktop computing experience to true mobile computing within the budding BYOD trend.
Surface was designed with keyboard integration in mind. To the iPad generation this is a step back but to corporate users who still need a keyboard and a pointing device it is the perfect instrument of transition from one mode of computing to the other.
Microsoft’s Last Stand
For Microsoft the Yammer and Surface tablet computer roll out are a major thrust. If corporate uptake of Yammer increases it will provide Microsoft with a social graph of its own, completely cordoned off from Google’s prying eyes. Should Surface be as popular as analysts expect it to be, it will become the bridging device which will make Windows relevant in the mobile computing age.
Microsoft has indicated as much, in terms of its strategy, by also bringing out a Microsoft phone which runs on the same Windows 8 OS as the Surface device. For the first time this provides the company with a sustained ecosystem where its customers can remain loyal to its products without feeling they are sacrificing freedom, flexibility or quality.
Because Microsoft is aiming all this at companies where it is comfortable neither Apple nor Google pose much of a threat. Should it be successful it will manage to come back into the digital market as a major player and, arguably, the strategy may even help to give a boost to BING which, for all its innovations, is fast slipping into obscurity.
While the strategy is sound and the vision well thought-through there is still room for Microsoft to pull a Zune-like stunt and mess it up. An in-depth article in Vanity Fair
for the first time reveals the endemic, inward-looking mentality, which made the company squander so many of its opportunities in the past.
The Yammer/Surface move indicates that Microsoft may have learnt from its mistakes and it is now ready to move on. We shall see soon enough whether it’s ready be the digital age’s latest Comeback Kid.