Microsoft CEO Satya Nadella speaks at Microsoft's annual shareholders meeting, in Bellevue, Wash., on Dec. 3.
What lies ahead for Microsoft in 2015 can be summarized in just two words:Windows 10.
The company's fate has always been deeply intertwined with Windows, but next year's upgrade carries unusual weight. Like Windows 7 did in 2009, Windows 10 needs to undo the damage done by its predecessor, Windows 8. It's no exaggeration to say that Microsoft can't afford to screw this one up.
Sure, Microsoft still makes heaps of money from its software that runs on PCs and servers in thousands of businesses — big and small — worldwide, and most of those computers aren't running the latest version of Windows, or anything even close. Windows 10 won't have any immediate impact on that dominating footprint.But in the long term, a second flawed Windows release would be crippling. Only now are many businesses adopting Windows 7 en masse (thanks mainly to the retiring of Windows XP), and you can bet few will ever upgrade to Windows 8/8.1, given its many criticisms. The market will give one bad release a pass, but two in a row would accelerate the company's decline in both relevance and market share.
We're already starting to see a passing of the torch in the business sector: Earlier this year, Apple and IBM announced a partnership to bring IBM's business software to iPhones and iPads. As smartphones and tablets get more powerful, more work is getting done on them, but so far the future of mobile in the enterprise looks surprisingly Microsoft-free, apart from a few apps.
Counting down to Windows 10
Windows 10, which will get a grand unveiling on Jan. 21, could change that. The new OS is intended to fully unite Microsoft's multiple platforms, with phones, tablets, PCs and even the Xbox all based on the same code. That potentially will make it easier than ever for developers to build apps that work on all kinds of devices, and for those devices to work together to keep experiences seamless (e.g., relaying a video across multiple screens).
But hold on for just one second. Isn't that unified vision basically what Microsoft promised with Windows 8? After all, Windows 8 was supposed to give PC users a device-agnostic experience, one with strong cloud integration. Microsoft even re-engineered Windows Phone from scratch to bring its mobile OS in line with PCs and tablets (which were often one in the same).
Judging from PC sales, which have been declining ever since the debut of Windows 8, and the anemic market share of Windows tablets, which stands at 1.6% based on usage, that didn't work out so well. Windows 10 needs to deliver on promises that Windows 8 left unfulfilled.
"The one thing they've got to hit out of the park is Windows 10," says Richard Hay, who operates Windows Observer. "It's got to address all the issues [with Windows 8]. It has to be almost perfect."
There's at least one reason to be optimistic: the transparent way Microsoft is handling the release. The company is launching Windows 10 with unprecedented collaboration with its customers, particularly enterprise customers. There are clear ways to send feedback, and it looks like the company is actually responding.
"What's different about Windows 10 is that we see them collecting the specific feedback and responding to the feedback," says Hay. "This is very different from the way they approached Windows 8."
Another point in Windows 10's favor is that Microsoft's cloud — which drives much of the technology that keeps cross-device experiences consistent — is stronger than ever.
But the idea of devices that automatically adapt to your context at any given moment is a puzzle that Microsoft and others are only beginning to really solve. Google's Android Wear and Apple's Continuity are just two examples, and both debuted in the last six months.
"Microsoft needs to deliver an operating system that works on both touch- and non-touch-centric devices," says Mary Jo Foley, editor of ZDNet's All About Microsoft blog, over email. "Microsoft needs to undo further the mistakes it made with Windows 8 (and which it began to do with Windows 8.1), and it needs to also try to deliver on its 'One Windows' promises by further aligning its different flavors of Windows across devices to try to keep developers in the fold."
Windows 10 will take device context further for Microsoft, something the company had trouble doing with Windows 8. At the Windows 8 launch, OneDrive (then called SkyDrive) wasn't robust enough to act as a user's primary data storage; the Azure cloud was nascent; and Cortana — the Windows Phone digital assistant — wasn't public yet. Now those services serve as the backbone of many parts of Microsoft's platforms. Windows finally has shoulders strong enough to hold up the promises from three years ago.
Windows Phone and mobile
If there's a weak spot in Microsoft's arsenal, it's certainly mobile, where Windows Phone still languishes at 2.9% market share. Some commentators have given up on the platform, pointing out that a large "app gap" still exists for Windows Phone — many apps never arrive on it, and those that do are under-featured compared to their iOS and Android counterparts.
"This is the unfortunate effect of not being the first mover," says Wes Miller, a research VP at Directions on Microsoft. "Today, if you're building an app, you build it for iOS first. And if you think you can get some money out of them, you might build it for Android users. And if you've got some spare time, you might build for Windows."
In 2014, we saw Microsoft, under the leadership of CEO Satya Nadella, finally address this problem, and abandon any "home team first" philosophy with its software products. Fully featured versions of Office, OneDrive and more apps came to iOS and Android, even going further than what had been done on Windows Phone.
"We're seeing this across all the platforms, that it's not so much the base of the platform — it's the apps and services available," says Hay. "It's exactly why Microsoft has made such a push to get their services on the other platforms, almost to the detriment of Windows at times."Microsoft wisely realizes it's not going to capture market share with creative "bundling" tricks, like what it tried to do with Windows RT and Office. It's only going to win converts to its platform by offering experiences that competitors can't (Office clones that are "good enough" are a dime a dozen on Android and iOS).
So where does that leave Windows Phone? Like an underperforming hockey team, Windows Phone will likely take years to catch up to its competitors, if it does at all. In the case of mobile, however, there may no longer be a trophy to win once that happens. Mobile platforms are rapidly converging feature-wise, with few clear-cut reasons left to switch from one to the other.
"Plan A is to try to get developers to buy into the idea that they'll be able to create 'universal apps' that will run on Windows Phone, Windows and ultimately Xbox," says Foley. "If that fails, I think we will see Microsoft provide a way to run Android apps on Windows and Windows Phone, as has been rumored for the past year."
Windows in 2015
Still, even if the mobile war is winding down, there are new frontiers to conquer. Microsoft may have already lost in mobile, but if cross-platform context and collaboration is the next battlefield, Windows 10 could give the company an edge.
That all depends on whether Nadella and Microsoft can do two things at once: First, it must address the complaints of longtime Windows users to ensure upgrading to Windows 10 proceeds as smoothly and quickly as possible. No one wants another Windows 8, figuratively and literally.
"The generic consumer is very happy with their existing systems," says Tim Bajarin, president of Creative Strategies. "I'm not convinced Windows 10 will drive any strong refresh. That was the original goal of Windows 8 — to force people to buy more systems. It failed badly."
Second, and more important, Microsoft must reach beyond immediate complaints and make a play for the future. Nadella's decision to focus on "re-inventing productivity," while a pedantic word choice, feels more correct than building PC/tablet hybrids or focusing on nonspecific things like "devices and services" (the company's central mission under Steve Ballmer).
But it only means something if the experiences Microsoft serves up take its customers to places its competitors can't. In simpler terms, the company needs to innovate — something that was seemingly squeezed out of its culture during its many years as an effective monopoly in computing.
There are signs of innovative spirit, however. Skype Translator, the digital storytelling app Sway and the Microsoft Band smartwatch/fitness tracker (complete with iPhone compatibility!) are all signs that the company is moving in the right direction.
Windows 10 needs to build on that foundation and not just be an adequate successor to Windows 7. It has to give customers — whether they're considering a Chromebook, a MacBook or even an entirely mobile experience — a reason to stop and look at what Microsoft is offering, show them why Windows will improve their lives, and perhaps even amaze them a little.
It's a tall order, but one Microsoft must fulfill if it hopes to regain any of the relevancy it once had. To win 2015 and beyond, Windows 10 needs to go to 11.
Tags: APPS AND SOFTWARE, BEGINNING 2015, Microsoft, Tech, WINDOWS, WINDOWS 10, WINDOWS 8, WINDOWS 8.1, WINDOWS PHONE