Microsoft is at a critical juncture here we know Ballmer is pushing the company into the cloud and from the direction we are seeing them move it will not be long before the majority of what Microsoft offers is SaaS (Software as a Service). Office 2013 is pretty much there with heavy integration into the cloud based Office 365 as is Windows 8. Microsoft has been hard at work pushing this to their partners too with incentives for selling these services to their customers, but will this push help to get Microsoft’s cloud revenue going? Even with Surface and Surface Pro we are not hearing many companies looking forward to the new products. Some of the biggest complaints are the heavy cloud integration, Poor support for custom applications (in Windows RT), and the need to provide a large amount of retraining. This means that Microsoft will lose out a large amount of their primary business. Of course the update cycle for many businesses is about a year off the release schedule any way, but this also could be another case where the enterprise skips a step in the hops that that the next release will be more to their liking. This happened with Windows Vista and if the early indicators are accurate it will happen again with Windows 8.
One of Microsoft’s saving graces is that some companies are actively looking into Windows Phone 8. There is excitement about the possibility that the new phone OSes will be able to tie in with existing Microsoft systems such as Group Policy, Domain Health checks and other important features for enterprise security. Unfortunately for Microsoft this does not automatically mean that companies will put Windows 8 or RT into play. We expect to see Microsoft continue to build hardware even if it ends up selling it at a loss. The point here is to attempt to build consumer confidence in Microsoft as a company that provides services (like Xbox Music etc) and hardware to match. In this way Ballmer is working to transform Microsoft into a company like Apple. It is really too bad that he is forgetting that Microsoft has spent the last few decades telling people that companies like Apple are bad for consumers and their ability to freely chose the hardware and software they want.
We will find out if Microsoft’s move will be a success or not on October 26th 2012. That is the launch day for the new Windows family. We will see the launch of the Surface tablet as well as more than a few other devices that will be built with Windows 8 in mind. Intel just showed off a number of them at IDF although coverage of them was unusually light. Right now we are simply not sure if there are any real compelling features in Windows 8 and Windows RT that will bring in sales for Microsoft we have been told by a few people involved that testing in current hardware does not show the full user experience because it is not optimized, but strangely enough they become non responsive when we ask them about reviewing their optimized hardware so we can see if there is any real improvement. In the end we expect Ballmer’s move to make Microsoft like Apple not to succeed in the manner that he would like. Microsoft is big enough that they can weather another bad OS, but by pushing their cloud services instead of concentrating on their core business they might end up having more to worry about than just another Windows Vista/ME.
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