The investors and industry pundits I speak to have widely varied opinions on Microsoft. Some view the firm as a stodgy old software company the industry has left behind — the world is moving to mobile & cloud and Microsoft has definitely been lagging when it comes to those markets; a lag that may spell the beginning of the end for the company. The Redmond-based giant recently went through a broad restructuring as well, which some saw as a way of kick-starting a slow-growth company.
I’m on the other side of the fence, though. While I had my share of frustrations with Microsoft software when I was in corporate IT, and while I do think the company lost direction for a time, I also think it’s getting its mojo back.
Sure, the world is rapidly moving into the post-PC era, but PCs aren’t going away all that fast. Yes, there are more Macs in the workplace (including the one I’m working on), but Windows is still the OS of choice for IT pros. I do think Windows 8 has some challenges — including the fact that it’s a pain to use without a touch screen — but we’ll continue to see Windows in the workplace for a long time.
As important as the OS is in the workplace, the real “killer apps” for Microsoft today are Office, Exchange, and SharePoint — the industry has no real alternative for these. Yes, there’s Google Docs, and that’s great for basic word processing, but anyone that wants to do anything advanced uses Microsoft Office, including Mac users (again, like the Mac I’m working on). MS Exchange is a near-monopoly, and SharePoint has been one of the hottest applications over the past five years.
Regarding mobile, lets be clear: Microsoft has no chance of catching Apple or Android any time soon — but they don’t have to. Blackberry has ticked off enough IT pros that I believe Microsoft has a great shot at becoming the de facto #3 vendor. The new Windows Phone OS is significantly better than older versions of mobile operating systems from Microsoft, and is gaining a bit of traction — if you haven’t checked out the new Nokia phone with a 41 megapixel camera running the Windows Phone OS, do yourself a favor and take a look.
While the above provide interesting points to discuss, I think the real needle-movers for Microsoft will be Lync, the cloud. and the hard-charging Hyper-V.
Lync is Microsoft’s UC platform, and the company has quietly been getting Lync deployed into companies as the solution for corporate chat and presence, primarily by replacing the older SameTime software from IBM. While it’s hard to really monetize chat and presence, Lync today sets the groundwork for Microsoft to challenge in other areas of UC, including voice, video, conferencing, and communications-integrated applications. From the survey work and interviews I’ve done, I fully expect Microsoft to challenge Cisco and be the #2 share vendor in UC over time.
Regarding the cloud, Microsoft has lots of cloud plays, but I think the Azure cloud has a great shot of being a dominant IaaS and PaaS cloud provider. The fact that Oracle now runs its tools on Azure is a huge proof point for Azure and I expect the Microsoft community to continue to utilize Azure more and more.
And lastly, there’s Hyper-V. If you’ve followed any of my blogs on this topic, you’ll know I think Hyper-V is already a formidable foe for market leader VMWare. Anyone using Windows Server 2012 can turn on Hyper-V and manage it through the widely-deployed System Center. I also believe that most customers that use Hyper-V look at it as “good enough” for well over half the workloads out there today. So, even if VMWare dominates the tier 1 applications, Hyper-V will take a chunk out of the rest of the applications. Hyper-V is charging hard and VMWare is in the cross-hairs.
So while many have been waiting for mobile and post-PC to be Microsoft’s “Kobayashi Maru”, the company still seems to have plenty of bullets left in its chamber to bounce back.