Many don’t know that Microsoft has had so many promising research projects that never made it fully into production. About 1,100 employees are working in Microsoft’s Worldwide Research Division. The prototypes that are created may never, themselves, make it into production, but many of their ideas and principles are adopted.

Take The Wedge, a smart, interactive display interface from Microsoft’s Applied Sciences Group, for instance.

From the project’s documentation: “Liquid Crystal Display (LCD) technology will struggle to display high-resolution on screens as big as whiteboards. Yet there is demand also for less power consumption, three-dimensional (3D) images and that the display should be able to see gestures and feel touch. Most of these features are possible with projection and wedge light-guides make projection slim, but pico-projectors are so dim that many will be needed for such a big screen. For now, we use instead a hybrid of technologies: light-guides look out from behind an LCD to see where the viewers’ hands and eyes are, and a collimated backlight lets us illuminate one view at a time to each eye. This lets us synthesize 3D with achievable increases in LCD frame rate. We expect that this combination of a multi-view 3D display and a view-dependent rendered image will give us the potential to televise the experience of looking through a window.”

Microsoft's Future: Failed ManagementHave you heard of this before? Most likely not, and the general public is even less likely to know that such technology already exists. Courier was another, more prominent concept that got a lot of media coverage before its surprising cancellation. It was a bold vision to reimagine the computer experience altogether, and that also meant abandoning Windows. The Courier team didn’t want to replicate the Windows desktop in the tablet environment. In contrast, Windows 8 represents exactly the type of schizophrenia that the Courier team wanted to avoid: a (some would say) clumsy attempt to balance desktop and tablet experiences in one product. Windows is, of course, one of the core platforms of Microsoft; without it, the company would not be in its leading position today (even though the Office division is far bigger).

Within this lies the real reason for the end of the Courier project before any actual prototype could have been manufactured. In CNET’s insightful post, How Windows 8 KO’d the Innovative Courier Tablet, Jay Greene writes:

“Inside Microsoft, though, Courier found itself in competition with a competing vision for tablet computing — Windows 8 (Launching October 26, 2012). It was late 2009, and Windows 7 had just launched that October.”

“In 1994, Allard, a 25-year-old programmer only three years into his Microsoft career, wrote a memo titled “Windows: The Next Killer Application on the Internet,” which found its way to Gates. He urged Microsoft to create tools to help Internet users before rivals did.”

“‘Steven (Sinofsky)’s business savvy trumps everyone’s innovative instincts,’ said a former Microsoft executive who worked on Courier. ‘He is soberly looking at how to protect the company.'”

The rest of the article goes to lengths to uncover the inner workings of the management levels at Microsoft. As mentioned in that article, it truly was a matter of business over innovation. Yet, it was Bill Gates himself who also advised Steve Ballmer not to take the Courier route.

In its history, Microsoft has gone down many different routes, resulting in both software and hardware products. Software remains its core business still, with Office and Windows leading the pack. For many years, innovation was not part of the corporate culture in Redmond; when the company changed, and adapted, it was already too late. When Microsoft and Nokia went into an agreement over Windows Phone 7 in April of 2011, it was a much-needed boost in the right direction to keep the Windows mobile platform alive. The UI — based on colorful live tiles, clear typography, and fluid animation — was certainly creative and innovative.

Since then this partnership yielded the Nokia Lumia series, which was met with positive reviews, but unfortunately faltering sales (though this didn’t harm Microsoft as much as it did Nokia). In retrospect, it might have been a wiser decision for Nokia to also offer Android-based phones. This is not the first time that Nokia showed up late to the game. Once it was, perhaps, the most respected phone manufacturer in the world. In 2000, it even held the key to a new kind of success in the new digital era. Over seven years before Apple’s iPhone launch, the Nokia team showed a color touch screen set above a single button. In the late 1990s, Nokia also developed a tablet computer with a wireless connection and a touch screen.

“Oh my God,” Mr. Nuovo says in an interview with the WSJ, as he clicks through his old slides. “We had it completely nailed.” The wouldn’t be the first time a company admits being too late to the game. Some companies are just smart enough to steal the idea quickly. Even with all the missteps in the last decade, Microsoft is far from being a failure. From scratch, it brought to the market the Xbox gaming console, which is today the top-selling console in the world.

“In July 2012,” according to the NY Times, “Microsoft said… that its revenue from Windows fell 13 percent in the fiscal fourth quarter [ending] June 30. Microsoft reported a net loss of $492 million in contrast to net income of $5.87 billion during the same period a year ago. The company said its revenue was $18.06 billion during the quarter, compared to $17.37 billion a year ago.” With the upcoming Windows 8 release, and the time-limited $29.99 upgrade offer, it remains to be seen if the 13% loss of the Windows division in the fourth quarter can be recouped. The new Windows release is the key to a whole new unified platform, which unites desktop, mobile, and corporate computing in the cloud. Behind the scenes is the newly updated SkyDrive, which will also be united with SharePoint Services, by adding as-yet unspecified SkyDrive Pro.

Microsoft’s Research, just like the Nokia team, has already invented so many great technologies, interfaces, and development platforms. It’s just sad to see this innovation and creativity being bogged down by a feudal system of managers and executives. Yet change is happening at the moment, with Microsoft frantically updating all of its software. Practically the whole Microsoft portfolio has already received an update, or will soon get one. However, Windows 8 is no little update for Microsoft. It represents everything the company is hoping to achieve in the coming years. In some people’s opinion, it’s too little, too late, yet for Microsoft this is not only a game of catching up to the others, but also an attempt to go back to its roots. It wants to innovate, and be #1 again on the consumer market. The path on which it marches toward its new future will be rocky. Already the EU is investigating the absence of browser choice in Windows RT, the ARM version of Windows 8. It would be a rather nasty surprise for Microsoft if it is forced to offer Windows RT with its own Internet Explorer 10.

In the last part of this editorial series, two concept videos were the matter of discussion. If Microsoft continues to streamline its fashion of operating, and also make use of its research division more, these concept videos would very quickly became a reality. Steve Ballmer has often been labelled a failure as CEO, yet Microsoft’s financials are stable as never before. Even with a loss this quarter, the economic power of the Redmond company is undeniable. Now it just needs to hold on to this new, fresh attitude. The upcoming Surface tablet is another product of this new Microsoft. Of course, success doesn’t come out of the blue, but the bold are usually rewarded.

For the Windows 95 launch, the Empire State Building in New York was lit up in the four Windows colors. Just like in 1995, Microsoft is spending upwards of $300 million for the marketing campaign of Windows 8. Times have changed, though. Apple is the cool product, and Windows 8 is the new kid on the block: a way for Microsoft to reinvent itself.

This is part four of the Microsoft’s Future editorial series. Originally, it was supposed to become a three-part series. In view of recent developments, more parts will be written; hence, the lack of numbering from now on.