Is Microsoft Paying The Price For Being Future-Unready?

by Preeti S    Jul 31, 2015

Microsoft

A year ago, ‘Mobile First, Cloud First’ became the guiding principle of Microsoft’s future. That was the time when Bring Your Own Device (BYoD) had almost matured as a practise and enterprises had realized the significance of ‘work from anywhere’ concept with proliferation of smartphone technology. For them, Microsoft was not the first to adopt the Mobile-First strategy.  

And now we have Microsoft’s new software Windows 10, which everyone is going gaga over for its cross-platform capabilities to enable same experience across phone, PC and tablet. Does it sound anything new? Isn’t that something Apple did years ago? 

The evolving demands and rising expectations about technologies are changing the world so fast that anything that is replicated or duplicated stands no chance of survival. Exposed to a wide choice of software and business models, customers are crafting the success path for a company with their rising expectations.

Also read: Microsoft’s five costly mistakes besides Nokia

Unarguably, Microsoft has been strategizing to reinvent productivity and business processes, and also subtly taking on its competitors. It has been rethinking on how to bring innovations faster to the market, but that is far from what is actually required. 

Being in competition should also encompass a vision to position the company as a leader not just in the current market, but also for the future. There is a need to have a futuristic plan factoring in the current trends to analyze the changing demands. Innovation is the key, but even innovation needs a direction to ensure business sustainability.

Led by Satya Nadella, Microsoft is striving to establish its market that it lost to Apple, Amazon and Google, and failed to be a major player in mobile, cloud and search respectively.

Microsoft’s Windows Phone held a 2.7% market share in 2014, a dip from 3.3% in 2013. While iOS share was 14.8 pc and Android dominated with 81.5 pc, an uptick from 78.7 pc from 2013.

Nadella has been honest to accept the mistake of underestimating the potential of smartphone. “”If anything, one big mistake we made in our past was to think of the PC (personal computer) as the hub for everything for all time to come. And today, of course, the high volume device is the six-inch phone. I acknowledge that,” he had said.

Few months ago, Microsoft reportedly wrote off losses of roughly $7.6 billion for its acquisition of Nokia’s devices and services business, for which it had spent $9.5bn. 

Perhaps, smartphones could be the first of many mistakes that Nadella might end up apologizing in the long run, unless the company adopts an approach to understand the evolving technological trends. 

Microsoft acquired Nokia and is now talking about mobile strategy, but Apple and Google have already gone a step beyond and are into wearables, where Microsoft has been silent.

In search too, Microsoft’s Bing is way far behind Google. Launched in 2009, Bing has failed to compete with Google and continues to be in the third slot with 20% market share behind Yahoo and Google. To think of, has Microsoft provided any compelling feature to shift us from Google to Bing? I have my own doubts.

The positive side

The only positive sign is Microsoft’s Azure, which is ranked second after Amazon’s AWS. Analysts say that AWS may have created the cloud market, but it’s Microsoft’s that is turning it competitive.

Also, Microsoft must focus on building its capabilities in artificial intelligence, which is still in a nascent stage, but has shown positive indications of major adoption in coming years.

With Cortana, Microsoft has begun the AI revolution, but the need of the hour is to get the right direction. And it must start with a path that none has tread so far.