Microsoft's Future: Part OneThe year 2012 has been an important one for Microsoft. Redemption is in reach again, after taking hits from increasingly hostile publicity against its mishandled operating system Windows Vista; several corporate snafus also shone a bad light on the company’s Redmond campus. Windows 7 has rectified many of the previous wrongs. A recent upgrade of its homepage to reflect the adoption of Metro UI shows a much more simple vision. Instead of the four tabs, there are now only two grey tabs: “For home” and “For work.”

One big hurdle Microsoft faced was inconsistency. Yet, with Windows 8 and Metro UI, it seems Microsoft is eliminating this shortcoming. However, like with any change, customers will be alienated. To understand this new path, let’s look at the history before it.

The Windows platform was dotted by inconsistent UI design, but corporate decisions have also caused a lot of customer confusion. Vista still had lot of old XP icons — some designers at Microsoft were too lazy or too complacent — as well as very ill-placed “back” arrows in some applications such as the Windows DVD maker, or a necessary update to Internet Explorer that came too late. However, not merely the veneer of unassailability cracked; beneath it all, the Redmond leviathan feels the abundant jabs from nimble, incessant competitors. In another ill-fated marketing move, Microsoft offered both Windows Vista and Windows 7 in far too many editions. No customer who is not also a computer aficionado ever understands the miniscule differences between Home Premium, Professional, Ultimate, or Enterprise. The upcoming Windows 8 comes only in three major editions: Windows 8, Windows 8 Pro, and Windows 8 Enterprise. There is also Windows RT, but that is a different matter altogether.

Apple has become the incumbent leader on the smartphone and music player markets, followed closely by Google and Android. Microsoft has followed suit with the Zune platform, but it hasn’t really become a great success. Although a competent player, the Zune was only available in the US, with no international release in sight. That was an illogical decision, to say the least. It would certainly have been much more successful in Europe, where the iPod was not the sole forerunner. With Windows Phone “Tango” and the upcoming version 8 “Apollo” release, Microsoft has launched a very competent platform, yet still has difficulty gaining a strong foothold in the market.

Smartphones represent another business sector where Microsoft wants to get back to being a major player. Windows Mobile was, so far, never regarded as the companion to its desktop variant. Windows Phone 8 changes this by sharing the same core as Windows 8. Mostly Windows Mobile was touted as being a compromised, overly simplified operating environment that only shared its name with the world’s most-used desktop system. Maybe rightly so, but in any case, Microsoft has proven that it can develop quality products.

Microsoft has some catching up to do, in point of fact. Windows Phone 7 promised to be that savior, just like Windows 7 turned out to be for desktop computing. Even a lauded hardware agreement with Nokia has not yet brought the desired sales numbers. A slow start notwithstanding, the Nokia Lumia series has received positive reviews. Upcoming Windows Phone 8 handsets will likely have a better adoption rate than their predecessors. It could be considered a drawback that Microsoft deploys its mobile operating system on generic phones, apart from Nokia. Recently, Microsoft announced a new hardware line, the Surface tablet computer. Maybe a similar effort in phones could be the savior. Apple has a stranglehold over its iPhone and the apps that can be sold for use on it, backed by the strong iTunes ecosystem. BlackBerry was another competitor that kept much of the enterprise sector closed, though its future seems to look very grim now. Then there’s also Google, which has become a force to be reckoned with. At least in the US, the Google Play ecosystem is expanding rapidly with movies, music, books, magazines, and apps being offered. These are monopolies Microsoft aims to break.

Yet Steve Ballmer doesn’t stand idle. Microsoft is undergoing a paradigm shift, with increasingly better and more astute quality control in its software releases. Windows 7 has received favorable reviews, and also suffers from fewer bugs than did Vista four years ago, while also benefiting from much better driver support. The previous iteration of the world’s most used operating system has been the bane of Redmond since the beginning of its troublesome development. Even I recall numerous BSODs when I first installed it.

Microsoft is a technology mongrel, and will never lose that status. Its tentacles are spread too widely. Yet no leviathan is invincible; it didn’t take a prince in shining armor to wound it, but simply an economic crisis. As President Kennedy said in a speech on April 12th, 1959, though, “The Chinese use two brush strokes to write the word “crisis.” One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger — but recognize the opportunity.” Steve Ballmer takes a rather reserved stance when asked how crisis might affect Microsoft. For him, it’s a different kind of recession — one that will reset the economy. Likewise, Microsoft has been doing a lot of soul-searching.

There are three sectors Microsoft hopes to expand: cloud computing, enterprise computing, and mobile computing. On top of that, it’s looking to grow ad revenue on Bing, and of course there is the Xbox 360, too. So, really, Microsoft has a strong presence in several key branches. At the D7 conference, Steve Ballmer told Walt Mossberg that the company is still investing aggressively in research and development. “We’re investing in areas where there is room for improvement.” Mossberg noted that this was an interesting euphemism. At that occasion, Ballmer also gave a first look at the then-new Bing search engine. This is an area where Microsoft hopes to excel, but it’s clearly not outdoing Google — who still is the singular king of the hill.

Some of that “aggressive investment” went into seemingly irrelevant details such as the bootscreen and default background of Windows 7. There are two very informative videos on Channel 9 that illuminate the design process behind the look of Windows 7. What comes across very prominently is that the designers wanted something expansive and airy. They wanted to convey a sense of openness and possibility. This might sound inviting when you’re sitting in a cubicle farm and gazing at time as it progresses toward your late-afternoon release. It means Microsoft finally realized that even a business-oriented product needs some culture; good taste has no relation to whether you work in a creative or industrial branch.

Now it’s crucial not to reduce culture to being colorful, open-minded, and outlandish. The candy-flavored XP seems to have sprung from a too simplistic mindset — even in the professional version it looked horrendously misplaced in an office environment. However, that seems to have been the thinking of the time, because even OS X 10.0 was littered with kindergarten icons. Both systems have since matured.

There is something Microsoft is learning from its recent corporate history: Deciding one’s path to glory is paramount. Knowing how to get there is primordial wisdom — whoever is better than the competition will triumph. This applies as much to a Fortune 500 company as it does to a smaller technology firm. Yet there are many ways to win. To be cultivated is one way, and that’s the way Microsoft has chosen.

Just a few days ago, on Tuesday, Microsoft China admitted to have stolen code from Plurk (a microblogging site). It has made its theft known. Last month, similar accusations were raised against its Windows 7 USB/DVD download tool. It started when Windows 7 Secrets co-author, Rafael Rivera, alleged that Microsoft had illegally used open source code. In its official statement, it admits to having used the code in question, but had not done so intentionally. The company accepts responsibility since it did not catch it as part of its code review process. Paul Thurrott comments that “one instance of theft is still theft, people. Now that Microsoft has admitted to what it did, I hope the rest of the doubters see the light as well.”

Microsoft is, by far, not a company without its share of mistakes. Lately Apple has, of course, been painted as the evil corporation for its numerous patent claims against many companies. Every company has the right and will use this right to protect its corporate property. This is unfortunately the foundation of our capitalist system.

Yet beyond the raging patent wars, there is a far more compelling story to be told on the subject of Microsoft’s transformation. A second and further parts to this series will explore in more depth the technical and design matters that drive Microsoft into a future of continued innovation and tougher competition.

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