Analysis: Microsoft in 2015: Moving swiftly, and on the right track with the Microsoft Band

sincity · January 2, 2015

Introduction and Windows 10

2014 was a year of unprecedented change for Microsoft, ushering in Satya Nadella, the first new CEO for fourteen years, and seeing the first inklings of change that will shape the Microsoft of the next fourteen or more years.

While much of what we have seen are upgrades to existing product lines – Windows Phone 8.1, Windows 10 and so on – Nadella's Microsoft has also expanded into new areas, releasing a new suite of fitness apps and a fitness band, dubbed Microsoft Band.

Interestingly, Nadella appears to transcend the office politics of old, both inside and outside of Microsoft. Within 50 days of Nadella taking the reins, Microsoft had pushed out Office to the iPad, opening up the suite of programs to hundreds of millions more customers willing to stump up a monthly fee.

And the strategy appears to have worked: over the first weekend, Office was downloaded by more than 10 million iPad users, and the subscription paywall surrounding Office for iPad was subsequently knocked down, allowing users without an Office 365 subscription access to the editing features of the suite.

What we witnessed in 2014 was essentially the opening up of Microsoft. Satya Nadella is, by all accounts, a much more open and communicative person than Steve Ballmer ever was, requiring his executive team to read "Nonviolent Communication," a book on the "compassionate connection" to others. The Microsoft of 2013 and prior would never have allowed Office onto Apple's tablet (Office for iPad was developed shortly after the release of the iPad and was withheld under Ballmer's orders) but here we are.

Windows 10

Windows 10 is set for release in autumn 2015, and will improve the desktop experience for Windows (the concept of Microsoft needing to "improve" the desktop experience five years ago would've been unthinkable) and tempting estranged users of Windows 8 back to the platform. The vision of a tablet-only world hasn't quite been realised – despite Steve Jobs' ideas of a "post-PC world" – and so Windows 8 still feels like a jack of all trades straddling both tablet and PC, never quite managing to conquer either experience.

Microsoft hasn't yet released many solid details of what Windows 10 will look like (so far only the Technical Preview has been shown) beyond the new Start menu in 'desktop' mode which was added in Windows 8.1 as an option that can be booted into, appeasing users of the operating system who don't have a touchscreen whilst retaining a noticeable design language between Windows 8 for touchscreen and Windows 8 for mouse.

The Windows 10 Consumer Preview is slated to be released in January 2015 introducing a new system dubbed "Continuum" which, unsurprisingly, makes it easier to use Windows 10 on a desktop computer with a mouse and keyboard. According to The Verge, Continuum was built specifically for tablets like the Surface Pro 3 which can offer a disjointed experience for those using keyboard and touch.

Windows Phone and hardware

Besides desktop Windows, Microsoft will also improve Windows Phone in 2015. While sales are still low – below 3% in the US – there is potential to grow in other markets, including fast growing markets in Europe and South America which could grow to be as big as the established markets today, if not bigger. Some commenters have given up on Windows Phone, claiming that apps are scarce – true – and that updates are slow – also true – but it is unlikely that Microsoft will give up on Windows Phone.

Unlike other companies, Microsoft can afford to spend resources on projects that have little obvious upside – and this extends to Windows Phone. Having missed the boat on smartphones and tablets originally, Microsoft is now scrambling to catch up with iOS and Android, with the outcome being interesting and, above all else, offering the opportunity to synergise all of their operating systems. Windows 8's design was first seen in Windows Phone 7 and has been iterated on both platforms ever since, offering relevance to the platform despite commercial failure.

Outside of just simple UI synergy, Microsoft is also bringing features from Windows Phone into Windows 10, the most prominent of which is Cortana. Various videos have leaked showing Cortana running on Windows 10, and the addition of the virtual assistant is a clear unique selling point for Windows as Apple is yet to add Siri to OS X.

Cortana was created as a response to Siri and Google Now, adding yet another reason to the list of points in favour of Windows Phone's continued existence: mobile is one of the most innovative places right now and having a foot in the door allows Microsoft to test features on Windows Phone before bringing them to Windows 10.

Surface and Band

Microsoft is no longer a software-only company, producing two new pieces of consumer hardware in 2014: the Surface and the Band. The Surface Pro line-up will likely see a refresh in 2015, creating the fourth version of the laptop/tablet hybrid and expanding Microsoft's position as a player in the world of hardware. Just as Google has done – and is doing – with the Nexus line, Microsoft uses the Surface Pro to guide hardware makers in the optimum setup for the most recent version of Windows.

The Microsoft Band, and associated fitness software, is an interesting new sphere for the company to be entering into and could, potentially, re-energise a company that is on the edge of irrelevancy. Many industry observers were shocked that Microsoft had built a new piece of hardware in secret and launched it, and the signs for the device are promising. While the reviews of the Band were average, it is encouraging that under Nadella's rule Microsoft is willing to experiment and execute speedily, catching a market as it emerges, not after it has emerged.

Apple is going to release its Watch in the first quarter of 2015, Samsung is on its sixth generation watch and the Moto 360 has an acclaimed design. All of this points to one conclusion – the wearables space is going to experience its renaissance in 2015 and Microsoft already has a wearable on the market. Microsoft seems determined to move ahead and avoid a repeat of the smartphone and tablet markets.

The Microsoft of Ballmer's era has gone, replaced by a company willing to expand quickly into new markets and take into consideration the views of customers. While Redmond may not have the current brand strength of Apple or Google with consumers, Microsoft is on the right track and 2015 could well be Redmond's year.