Microsoft is disappearing. It isn't going away, exactly. It's more like a party guest who slinks off to hide in the coatroom. The once-ubiquitous company is preparing for a future in which it's still present -- but it will have no presence anymore.
A company whose original CEO was once the face of high tech for the masses is sinking into the infrastructure, and therefore into anonymity.
Certainly, Microsoft remains a household name. It's inarguable that it still drives the majority of the world's PCs. We know the Xbox franchise has been good for it. But none of that defines the future for Microsoft. Why do I say this? Because it has chosen Satya Nadella. Nadella is decidedly not a household name. More importantly, though he comes from within Microsoft, he has had nothing to do with Windows, Office or Xbox. Instead, his hands have been all over the service and infrastructure future the company is betting on.
I'm not saying that doesn't make sense. Tapping a guy whose work focuses on cloud and enterprise systems might be the only thing that Microsoft could reasonably do. Those businesses are already Microsoft's real focus. Sure, Windows and Office are still big earners for the company, but operating systems and desktop software are not critical to the company's future in a heterogeneous, post-PC world -- a world that it has otherwise failed miserably to prepare for. Having been beaten back in every effort to stake a claim in the mobile device war, it has decided that it will make money from cloud, SaaS, standards development and connected productivity.
Microsoft is turning to its main chance for relevance, and that main chance demands that it provide services and tools for a multiplatform computing future. And so Microsoft -- yes, Microsoft -- needs to deliver tools for every device, operating system and platform out there, and it needs to deliver these services online. To keep the money rolling in, it will have to dig deep into its vast patent portfolio to identify protected assets that it can convince core customers they cannot live without.
And who will those core customers be? They won't be the average Joes and small-business owners who used to line up outside of brick-and-mortar electronics stores awaiting the next Windows OS. They won't be the folks buying a cheap Lenovo laptop as their one and only home computer. Those are people who are likely to buy Office once and never upgrade their Windows install. They are not good business.
Business is good business. And by business, I mean big business.
With the promotion of Nadella, Microsoft is telling us that it's going to move aggressively into delivering on what core enterprise users need. That's going to involve some really tough decisions for the company (I foresee the Xbox division being spun off, for example), and it will require more flexibility than Microsoft has ever shown before. But by toppling Bill Gates as chairman of the company he founded, the company that he begat is signaling the end of his Microsoft-only worldview.
That opens the door to things like Office for iPads and SharePoint for Android.
This new Microsoft will shake things up, though it will all be happening down in the infrastructure depths where most of the world won't notice. But if your company is in the business of providing services at the high end of infrastructure deployments -- to server and network providers, for example -- you'd better watch your back. Microsoft under Nadella will also be looking to deliver tools for network intelligence and 4G, for billing, for biometric optical surveillance systems, and for smart cities and smart meters.
It already plays in these sectors, but now it's going to become more intense about its game.
This is all perfectly rational. Microsoft knows that it has forever lost its position in the consumer markets. And in a way, this move is a way to escape from its largest competitors, Google and Apple, which have shown no interest in the sectors Microsoft is headed toward.
A rational strategy, as I said, just not an interesting one.
Microsoft could have made one last stab at the world's more buoyant markets, perjaps by hiring a wild card as CEO. But, since "wild" isn't a word that's ever been associated with Microsoft, it isn't terribly surprising that it is instead pulling into itself and pursuing a safer course. It is ironic, though, that as it ends the era of Gates' leadership, it seems to be reflecting his withdrawn-geek credentials by making like the shy houseguest and slinking off to the cloakroom.