Test driving the HoloLens, Microsoft’s soon-to-be released augmented reality headset, it’s easy to forget the challenges facing Satya Nadella as his first year on the job starts to take shape. Who cares if Windows Phone is dying and the Nokia acquisition is rumored to be destined for a massive write-off? Does it really matter that Windows desktop is losing its monopoly? So what if Microsoft is betting on a massive upgrade to Windows 10 that will require millions of customers to leapfrog a Windows 8 OS that just didn’t seem to light world on fire? What does it matter that the market cap of competitors like Apple is stratospheric, while Microsoft’s cap is more sea-level-ish? Who cares about Google anyway?
Why the cavalier attitude? Simple: Microsoft has HoloLens. Everyone else can go suck an egg.
I don’t mean to imply that HoloLens solves all the above challenges, nor do I wish to imply that sucking eggs can serve as an appropriate competitive response. I don’t even like eggs. But what I do wish to imply emphatically is that HoloLens, and the augmented reality is it poised to deliver, should at least solve that market cap problem, if financial analysts can give Microsoft half the credit they give Apple for new product intros. And if not stratospheric, at least something in the upper troposphere would be fine. As the above-named Microsoft competitors have proven over and over, a strong stock price can paper over a nefarious lack of profitability (Salesforce.com), meh-category new product intros (Apple Watch, Google Glass), or excessive hype (all of the above) with room to spare.
Can HoloLens really do all that? Actually, no, at least not by itself. But, like massive innovations of the past, HoloLens has the potential to provide an anchor point for the new Microsoft – much like the iPod and then iPhone did for Apple, or search did for Google, or online CRM did for Salesforce.com – that will make the rest of its products and strategy all the more palatable to the fickle financial and consumer markets that have the foresight and forbearance of a three year-old when it comes to discerning the difference between fad and long-term value.
Before I continue my admittedly slavish, and potentially faddish, fascination with HoloLens, let me add that, above challenges notwithstanding, there was a lot happening at last week’s Microsoft Build developers conference that spoke to the long-term value potential of Microsoft. After all, Build was the conference where the Universal Applications Platform was rolled out to the assembled developers, finally fulfilling the promise of a single code base that runs across all Microsoft’s devices, as long as they are running Windows 8 or Windows 10 (which leaves Xbox out for now, as it’s not on the Windows 10 upgrade list, at least not yet. Considering the special console hardware and the Kinect motion detector that are part of Xbox, it sort of makes sense not to push developers to think about how to make a console or Kinect game portable to a phone or tablet.)
Build also saw a host of new Azure capabilities basically designed to make it more flexible, elastic, easy to develop and deploy on, and otherwise prove the point that Azure is a strong potential competitor for Amazon AWS and other cloud platform offerings. Microsoft also rolled out its Data Lake strategy, a key requirement for IoT and other applications requiring the aggregation and use of massive quantities of highly disparate date. Office continued its position as the third leg of the Microsoft stool, as both a driver of Azure utilization as well as an important nexus of business functionality.
And Edge, the replacement for that scourge of Web users and developers everywhere, Internet Explorer 11, was rolled out to an expectant and much-relieved developer community. Support for non-Microsoft tech was also in evidence – iOS and Android got their share of love too, reinforcing Microsoft’s new ecumenism when it comes to the tablet and phone market, which, considering Microsoft’s position in both markets, makes a ton of sense. (More on the phone market in a minute.)
What all this means is that Microsoft did an excellent job making a case, in front of an admittedly pro-Microsoft crowd, of the relevance of Microsoft as a provider and enabler of innovation. Its pas de deux as a purveyor of devices and services was also on display: not only with HoloLens but also with its new Surface tablets, Xbox, and third party devices like the weirdly-named but wonderfully designed HP Spectre, which was jointly developed with HP and handed out to every Build attendee (including myself, and I have to admit it’s a helluva showcase for why Windows 8.1 on a touch-screen, SSD device provides an amazing computing experience.)
In particular, the concept behind the Universal Applications Platform, which I have written about here, makes for an important inflection point in the race to capture the hearts and minds of developers. UAP is about as close to a write-once, deploy anywhere platform as exists in the market today: Microsoft has taken great pains to show that apps written using UAP can target virtually any modern mobile device, as long as it is running iOS or Android (oh, and Windows Phone as well.) This is a huge boon for developers who have been writing very different apps, with very different feature sets, for desktops, phones, and tablets. While Microsoft acknowledges that form factor and other device-specific characteristics may prevent true universal portability with UAP, the ability to deploy across multiple devices sure beats the hell out of the artificial distinction between tablet, phone and desktop that iOS and Android continue to perpetuate.
While we’re talking Windows Phone, let’s get the bad news over with. Conspicuous in its absence at Build was any sort of drumbeat about writing to Windows Phone. There were some dribs and drabs, mentions here and there, some news about being able to convert objective-C apps directly to Windows Phone (Candy Crush apparently did that with its Windows Phone version, which proves something, I guess) and an emulator that allows Android phone apps to run on Windows Phone, but I couldn’t find a Windows Phone session anywhere in the conference catalogue. The phones were in the demo booths, and clearly there were more Windows Phones per capita at Build than anywhere else this side of Redmond, but it was clear that Microsoft wasn’t going to invest any significant capital at its premier North American developer conference on Windows Phone.
It was almost fitting that ComputerWorld published an article that week, based on a thoughtful analysis of a recent financial filing, which suggested Microsoft would be taking a massive multi-billion dollar write-off for the acquisition of Nokia. Microsoft still thinks there room for its phones in emerging markets, and maybe those markets will provide some way for Microsoft to have a play in the phone market, but it’s pretty clear that Windows Phone’s future isn’t.
But who needs a phone when you can have a HoloLens? Of course, Microsoft needs to get some killer apps developed quickly in order to take advantage of the HoloLens hype before Google, Facebook or Apple get in the game (and, from what I hear from my sources, Facebook’s Oculus rift isn’t in the game, and, of course, Google Glass fouled out publically a while ago.) What was nice in my demo of HoloLens was the fact that existing Microsoft apps, like Skype, could be significantly enhanced using HoloLens out of the box. And just the idea of having the world be your virtual workspace gives HoloLens some instant usability – this is, after all, a Windows 10 device fully compatible with the UAP concept. Which means you put on your HoloLens, and interact with virtual versions of Office, Edge, and the rest running on your wall, your desk, your dinner table.
Sounds silly? Trust me, working or playing in augmented reality is going to take the world by storm. If Microsoft can leverage HoloLens quickly – it’s going to debut this summer, along with Windows 10, at a price that I expect will be like that of a high-end PC (which it is – a fully untethered, WiFi and probably cell-phone connected PC) — the world of work and play, and by extension Microsoft, will never be the same.
Even without HoloLens, or, better yet, in the run-up to the pending HoloLens era, Microsoft is clearly on a roll. It’s laid a few eggs – you lay a few, you suck a few, you hatch a few, that’s what successful tech companies do. The combination of Office, Windows 10, UAP, Azure, the enterprise apps in Dynamics, support for a full line of touch-enabled devices (honestly, you haven’t experienced the epitome of desktop computing if you haven’t used a touch-screen laptop), ecumenism with respect to iOS and Android, and what by all appearances is a very solid leader in Satya Nadella means that Microsoft’s comeback is in the works.
Will Microsoft dominate like it did in the past? No way. But tech is so much bigger, and so much more pervasive, that dominance isn’t really the goal anymore. Relevance as an innovator, one that can help customers refresh their technology and processes in ways that make sense, while allowing them to prosper as much as possible with what they already have, is one goal. Spanning the divide between our business and personal lives, work and play – that’s another goal. I think Microsoft can do both, as well or better than almost any company in the market today.
There’s more to tech leadership than a slick phone, much more. And Microsoft is about to show the market that, once again, re-invention and innovation can still have a made-in-Redmond feel.