nadella 3 build 2014Image: Jon Phillips

Microsoft's productivity drive could kill software as we know it

On Thursday, Satya Nadella charted a new course for Microsoft, focused on interconnectivity and productivity—one where, conceivably, the company's standard-setting Office applications and other products and services could slowly blur into different modes of working with the same data.

Today you’ll still buy Office, Windows, Windows Phone, and other Microsoft products and services. But within the next decade, your Microsoft experience could be radically different. 

Nadella’s strategy memo marks an evolution: from Steve Ballmer’s “devices and services” strategy, to Nadella’s own “cloud first, mobile first” mantra, and now to “the productivity and platform company for the mobile-first and cloud-first world.”

satya nadella

Satya Nadella’s memo has put his stamp on the company.

“Microsoft has a unique ability to harmonize the world’s devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered to do more and achieve more with what is becoming an increasingly scarce commodity—time!” Nadella wrote.

This is what productivity means to Nadella: Connections, intelligence, and most of all, ubiquity. To reach that goal, Nadella talks at length of the need to “reinvent” the company’s culture and products to meet this new reality.

Connections forged

Microsoft has already spent considerable effort connecting its software apps to one another. Microsoft’s business intelligence platform can tap into Bing Maps, and Excel can connect to live data sources stored within the Azure cloud. Microsoft’s Bing search engine has morphed into a knowledge repository powering Cortana and other services. And on a more personal level, Microsoft has responded to the collaborative advantages in Google Apps and other services with enhancements in its Office suite, especially its Web apps.

outlook web app group

Microsoft has used its Web apps, rather than its dedicated software, to quickly launch new features.

Nadella also clearly recognizes the potential pitfalls of the so-called Internet of Things—that we could be overwhelmed by a wave of data that we simply can’t grasp, let alone place in its proper context.

“Billions of sensors, screens and devices—in conference rooms, living rooms, cities, cars, phones, PCs—are forming a vast network and streams of data that simply disappear into the background of our lives,” Nadella writes. “This computing power will digitize nearly everything around us and will derive insights from all of the data being generated by interactions among people and between people and machines. We are moving from a world where computing power was scarce to a place where it now is almost limitless, and where the true scarce commodity is increasingly human attention.”

It’s easy to dismiss this notion of “reinventing” the company through its products as simple marketingspeak. And Microsoft’s product portfolio won’t change; Nadella identifies Skype, OneDrive, OneNote, Outlook, Word, Excel, PowerPoint, Bing and Dynamics as parts of the roster Microsoft will offer going forward.

But Nadella also calls out other Microsoft technologies that aren’t so much products as services—namely its “Oslo” technology (now renamed Delve) and Cortana, the digital assistant powering the latest iteration of Microsoft’s Windows Phone—and they interact in new ways with data that Microsoft has accumulated elsewhere. Other services, like Skype Translator, will help bridge the language barriers of workers collaborating across continents.

sharepoint oslo contactsd Microsoft

Microsoft’s “Oslo” or Delve technology provides a front end to view work relationships cultivated by technologies like Bing.

“Increasingly, all of these experiences will become more connected to each other, more contextual and more personal,” Nadella writes.

Software as services

Microsoft’s role, as Nadella draws it, is to intelligently facilitate these connections between devices, people, and data, parsing the data in such a way that it’s actually useful. “All of these apps will be explicitly engineered so anybody can find, try and then buy them in friction-free ways,” Nadella writes. “They will be built for other ecosystems so as people move from device to device, so will their content and the richness of their services—it’s one way we keep people, not devices, at the center.”

Note Nadella’s emphasis on “people, not devices.” It’s a quiet hint of how Microsoft will seek to differentiate itself as the company rethinks its strategy

It’s not too long ago that a company like Google, for example, regarded services like Google Drive or Gmail as a service that belonged on its own platforms. But that’s less true today. While email can flow freely across platforms, it’s the intelligence on top of it—reading your email to learn about an upcoming flight, and determining how soon you need to leave for the airport, factoring in traffic—that’s increasingly becoming platform-specific. I can open my Gmail on my Windows Phone, but Google Now will ping me only if I have my Samsung Galaxy Note 3 handy.

office for ipad powerpoint transitions

Office for iPad looks terrific, and will win converts to Microsoft’s services. But it lacks the intelligence of Office running on a Windows platform.

It’s conceivable, then, that what we think of as Microsoft “products” may simply evolve into services. The so-called “walled garden,” where companies prevent data from leaving, is a thing of the past. Data flows freely in and out. Users are invited to partake of the services offered by Microsoft, Google, and Apple—but those digital servants never venture outside their corporate walls. (Compare this approach to the way Wolfram Research handles data with its latest Mathematica release.)

You already know this to be true: You can open a spreadsheet in Excel, or in Word. You can also manipulate that data via a Web app, if you like. Or to use Nadella’s example, you can take language—just another form of data, whether it be French, Japanese, or English—and interact with it via Skype, Word, or Outlook, translating it and correlating it to your contacts. It’s the last bit, though, where Microsoft’s native software is required.

Put another way, Excel may run on an iPad. But Excel will run best on a Windows PC or Surface tablet—not because of any hardware limitations, but because Microsoft reserves its digital intelligence for users who choose Microsoft platforms. In a way, a Windows PC or tablet authenticates the user to allow him or her access within Microsoft’s ecosystem.

From a business sense, that’s the direction that Microsoft is heading. Instead of buying a Microsoft Office DVD, Office 365 asks you to treat Microsoft Office as a subscription, with additional capabilities and features added over time. You’re simply buying a bundle of services.

Five years or a decade from now, Nadella suggests, we may still open Word, or Excel, or Internet Explorer. But we may increasingly look at those apps as remnants of a bygone age, much the same way we look at WhatsApp or Facebook compared to AOL chat rooms.

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