My first impressions of Microsoft Build 2015 were that the firm was now focused back on developers and had largely returned to its roots. Microsoft had segmented into efforts focused on the intelligent cloud, on Office as a platform again, and on Windows 10, which is unlike any version yet created. It also showcased HoloLens, which is a technology that could eventually replace all of the technology you currently use to consume or create content.
As I now look back at Microsoft Build 2015, I can see the bigger story. This isn’t just a new set of products. This is a new Microsoft, blending what it was with what it wants to become to change computing as we know it.
Microsoft fully understands it can’t beat Apple, Amazon or Google by chasing them, but it can beat them if it both revisits its old embrace and extend strategy, and then pulls a Steve Jobs to change the market.
Let me explain.
Embrace, Extend, Extinguish
Embrace, Extend, Extinguish was the strategy that turned Microsoft from a little tools and platform company to the firm that was at the heart of the PC revolution in the 1980s and 1990s. You first embrace, and often emulate, something a competitor is doing, you do it better, and then you effectively make the competitor obsolete. At Build 2015, Microsoft showcased the use of this strategy against Google and against its old platforms like Windows XP that are refusing to die.
In Windows 10, developers will be able to easily sell and run Android and Apple apps and legacy Windows apps. This is important because on phones, Microsoft badly lags both Apple and Google in apps. What is not so well known is that on Google’s platform, the app developers have historically made far less money than on Apple’s platform. And, at a smaller scale, the same has been true of Windows phones. Google users apparently don’t like paying for things but one thing Apple and Microsoft share is a user base that doesn’t have a big problem paying for an app. So the embrace part is running the apps on the new platform, and the extend part is doing so more profitably, and with money typically comes a better experience. So if phone users get a similar but better experience on Windows phones than Android phones on the same apps, they are far more likely to choose Windows over time, making Android and Windows XP redundant.
Moving Apple users will take more effort, but if you add to this something like Continuum where you can turn your smartphone into a full PC, suddenly folks are likely to start thinking that Apple and Google might have been skunked.
I should point out that until this event, Google was the only company aggressively using this strategy and it was using it against Apple.
Seed corn, Reactor Space is about seed corn. Most of the innovation comes from small companies and individuals with ideas, but the difficulty of getting to market and the oppressive pressure of bigger companies keeps a lot of these ideas from becoming products, let alone successful firms. However, it is from seeds like this that Apple, Google and Microsoft were created, and if you can capture most of the seeds, you’ll end up with most of the crop.
That is what Reactor Space is all about. This truly goes back to Microsoft’s roots. This is the company tying into the maker effort and making tools like learning machines and analytics, which are typically only available to large, rich companies, available on subscription to small shops.
Reactor Space isn’t just about reaching down but out. These innovative little firms can’t afford to make regular trips to Microsoft, so Microsoft is going to 26 cities to come to them.
This is big for two reasons. It fully reverses a trend largely championed by Steve Ballmer that took Microsoft away from its small company champion roots and made it into an enterprise-focused firm. Second, to be healthy, Microsoft has to focus on developers, particularly those who are most creative and independent, because these are the folks who will create the future simply because they aren’t surrounded by tons of corporate idiots telling them what they can’t do.
It’ll likely take a decade to see the real result from this effort, but it has the most potential to change our future.
I promised I’d talk about HoloLens and I haven’t forgotten. Think of HoloLens as a new digital filter between you and the real world with the potential to change reality. The tag phase I’ve said most often is “perception is reality,” and HoloLens can change how you perceive the world. If you want to see a world with unicorns and pixies, HoloLens can do that. If you want to see a world of vampires and monsters, HoloLens can do that as well. As it evolves, it can process what you would otherwise see and have you see something different. In its initial form — and realize this was basically just a bunch of wires a few weeks ago and it is now close to being a releasable product — it can make monitors, PCs, tablets, TVs and smartphones obsolete. It could make it so you don’t actually have to put windows in cars, planes or buildings (just cameras) and, coupled with car sensors and cameras, it could allow people to continue to drive when autonomous cars take the world’s roads over.
With voice and gesture capability, it can emulate almost any interface, and coupled with something like VR gloves, it could replace every machine interface we now use, including the steering wheel. If you ever get a chance to try it, do, as it will change your mind about the future of computing.
Wrapping Up: Microsoft’s Path to Tomorrowland
The new Satya Nadella Microsoft is a blend of the old and the new. The old is a company again focused on the little firms and developers in particular, and the new is the idea of the next computing age of virtual reality systems connected to Azure Cloud Services. At Build this year, I saw the future and damned if it didn’t look bright. If we are ever to get to a world like Tomorrowland (watch the trailer and tell me if you don’t think “HoloLens”), it is a path like the one Microsoft is on that will get us there. You ain’t seen nothing yet!
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+