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TL;DR: Azure. What's going on in a new strategy. Microsoft wants people building applications in Azure. They want people using ASP.NET technologies. Given tha

TL;DR: Azure. What's going on in a new strategy. Microsoft wants people building applications in Azure. They want people using ASP.NET technologies. Given that Azure competes with AWS and Google Compute; that ASP.NET and C# compete with Elixir/Phoenix, Clojure, Scala, Koitlin, etc, there is absolutely no way they can maintain any form of lockin. Even in the conservative companies, they compete with Java. The pitch to the investors is that by opening up their toolset, it gets more people on their cloud services and boosts recurring revenue. Which is what everyone else is doing.

optforfon 11y ago
So they've decide that the business model of the past two decades is doomed? Are investors onboard with that? Sounds like some serious downsizing is coming to come up in the next 5 years... We might be looking back at this CEO with incredulity in 10 years when MSFT is struggling to keep the lights on ("they did what?! They just gave away all their products for free??")
- Delmania 11y ago
  Have you paid attention to the change in behaviors that have come about due to mobile devices? Web services are huge in helping to store user data and keep it in sync across the diverse set of computer people use. Right now, I can't think of any vendor that forces a lock into their platform for development purposes. Even Apple made Swift free and cross platform. Lock in on Visual Studio and C# makes no sense. C# is a nice language, but there's a wide variety of alternatives that are just as good. Visual Studio is really nice, but people have been building stuff with Eclipse, Sublime, and Emacs for quite some time. They are making a long-term push to subscription oriented services.
- criddell 11y ago
  > So they've decide that the business model of the past two decades is doomed? Isn't it? How much growth do you see around the PC and Office business?
  - alkonaut 11y ago
    Is growth really necessary? They have cornered the corporate desktop pretty well, businesses aren't going to stop buying new computers for all employees every 3 years with Windows and office and the associated backends with SharePoint/Exchange etc.
    - criddell 11y ago
      > Is growth really necessary? I actually agree with you. I think Microsoft's evolution is mostly done. The XBox is their consumer device and everything else is all about enterprise and small business users. Microsoft is a boring, mature, very profitable company. It isn't such a bad thing to be. Their hardware is in an interesting place though. They are really the only company making decent Windows hardware (and I say that as a longtime ThinkPad fan). I would be so happy if they took the Surface Book and simplified it into a traditional laptop with battery life as good as or better than similar Apple machines.
- pjc50 11y ago
  The alternative is to wait while change passes them buy and then issue a Nokia "burning platform" memo. (Nokia are now a wholly owned subsidiary of Microsoft. If Microsoft collapsed, who would buy them? Apple?)
  - tuukkah 11y ago
    Microsoft bought Nokia's mobile phones but the rest of Nokia survives (marker cap $22 billion).
- sdar 11y ago
  > So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall; medium-term at least) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is more closely tied to a provider; specially with the synergies in their product line.
- sdar 11y ago
  > So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is tied to a platform; specially with the synergies in their product line.
- cm2187 11y ago
  They used to live of windows licenses but their market share is shrinking if you take tablets and mobiles into account. The new strategy seems to be making money on cloud services, which are platform agnostic, and search engine, of which Windows is becoming just a natural extension, like Android and Chrome OS are an extension to google.com, a probe given for free that Google wants to see in each of their users pockets to keep an eye on where they are, who they talk to, what they do. Hence the extensive tracking of Windows 10, and Windows 10 upgrades being given for free. We may like it or not, or agree that it makes sense or not, but at least it looks like a rational strategy.
- eip 11y ago
  Sun 2.0?
shmerl 11y ago
> there is absolutely no way they can maintain any form of lockin. They still have a very strong lock-in in graphics though. Why didn't MS join the Vulkan working group? And that's their attitude in general - they didn't become any better than before. They just drop lock-in under pressure by competition. Other than that, they pursue lock-in all the same.
- Delmania 11y ago
  https://www.khronos.org/members/ https://www.khronos.org/members/ Really? Might want to check that again. Although, I am curious, considering Apple does the same thing with Metal that Microsoft does with DirectX. The difference is Apple has no dedicated console device they sell.
  - shmerl 11y ago
    Khronos in general - yes. For example for WebGL (competition and the fact that they lost browser wars caused that). But Vulkan? MS clearly avoided any participation. So you only confirm what I said - MS drop lock-in only when competition starts burning their heels.
  - CodeCube 11y ago
    > Apple has no dedicated console device they sell. ahem ... http://www.apple.com/tv/ http://www.apple.com/tv/ :P
- cptskippy 11y ago
  Microsoft has changed, they now know what will bring the antitrust hammer down. They no longer sabotage or hamper competition actively like they have in the past. Instead they're trying to be everything to everyone and cater to everyone's needs. Does that mean they're altruistic and want to save the world at their own expense? Definitely not. But they also recognize when when they're not going to win a fight and have started to compete in markets they can't own. That being said if they own a market (e.g. PC Gaming) they aren't going to exchange money for warm fuzzies.
  - 11y ago
cookiecaper 11y ago
Yes, "cloud" is changing everything, for better or worse. Microsoft realized that enterprise, their primary market, LOVES cloud and that Windows technologies were much less capable in the cloud than open technologies for a variety of reasons, not the least of which is licensing. MS is opening their platform to run on Linux because they want people to continue using Windows, Visual Studio, and .NET as development platforms. The core of MS's business has always been Windows, and secondarily, Office. Since so many people want to use the cloud, and on top of that since so many people want to use the cloud via sexy vendors like AWS, Microsoft needs the heart of their Windows lock-in strategy, which is .NET, to work on it. These moves are defensive of .NET's place in enterprise development, and consequently Windows's place on the enterprise workstation. Once MS feels that .NET is far and away the clear choice for development in the cloud-centric world, they'll work to bring more people onto Windows as the cloud OS of choice (Azure, etc).
- Delmania 11y ago
  https://github.com/Microsoft/dotnet https://github.com/Microsoft/dotnet How exactly is releasing the .NET framework on Github a lock-in strategy? Like many people, you are missing the point. The operating system is irrelevant. You have people editing Excel spreadsheets in an iPad on iOS, and then switching to Excel on some form of Windows. They've been trying to get Windows Server and IIS as the platform of choice, and they have lost to Linux, Apache, and NGINX. From a technological perspective, they can't afford lock-ins, not when there are so many alternatives. They want you using their services.
  - cookiecaper 11y ago
    >How exactly is releasing the .NET framework on Github a lock-in strategy? In the way described in my original post. Open-sourcing the .NET framework means people will help them port it to new platforms. It means that people will be able to get the .NET framework running on whatever is running in their corporate cloud. This means that users will continue to develop in C#, using APIs developed by Microsoft that will always work best on Windows, using development tools provided by Microsoft that will also always work best on Windows. If your company switches from .NET to Java because .NET doesn't work well "in the cloud", then your company starts to ask other questions, like "Well, we don't use Visual Studio anymore, so we don't need to keep paying Microsoft $xx,xxx per year for that. Everyone likes Mac a lot and we don't have to use MS's dev tools anymore, so why don't we move everyone to that? We can start to phase out our Windows Server and SQL Server licenses too since we're not using any other Microsoft stuff and then we won't be paying them another $yy,yyy and we'll be one of the coolest companies around because everyone will be using a Mac." MS's strategy of opening the foundations of their platform so that the applications can run on any backend makes it so you instead say "Oh, we still run .NET apps on our AWS cloud, so we still need Visual Studio, better keep paying MS $xx,xxx." And "oh, SQL Server runs in our cloud infrastructure, so we can stick with that; that's another $yy,yyy for the license this year." If you stay on MS's platform, they can then call you up at any time and say "Hey, switch to Azure, it's a lot cheaper than AWS because we don't charge ourselves license fees." On the other hand, if you move off their platform because MS tech doesn't work well in the cloud, they lose a lot of existing revenue, a lot of potential revenue, and a lot of mindshare and exposure that decreases their relevance in general. The key to MS's lasting success has been .NET. That's what's been propping up Windows and consequently Office. If they lose .NET, they're in deep trouble. They are going to do everything they can to keep it alive, even if it means making it so your ASP.NET web app runs on a Linux server.
cynoclast 11y ago
I can't get over the fact that Microsoft's cloud product is the color of sky without clouds in it.

optforfon 11y ago

So they've decide that the business model of the past two decades is doomed? Are investors onboard with that? Sounds like some serious downsizing is coming to come up in the next 5 years... We might be looking back at this CEO with incredulity in 10 years when MSFT is struggling to keep the lights on ("they did what?! They just gave away all their products for free??")

Delmania 11y ago
Have you paid attention to the change in behaviors that have come about due to mobile devices? Web services are huge in helping to store user data and keep it in sync across the diverse set of computer people use. Right now, I can't think of any vendor that forces a lock into their platform for development purposes. Even Apple made Swift free and cross platform. Lock in on Visual Studio and C# makes no sense. C# is a nice language, but there's a wide variety of alternatives that are just as good. Visual Studio is really nice, but people have been building stuff with Eclipse, Sublime, and Emacs for quite some time. They are making a long-term push to subscription oriented services.
criddell 11y ago
> So they've decide that the business model of the past two decades is doomed? Isn't it? How much growth do you see around the PC and Office business?
- alkonaut 11y ago
  Is growth really necessary? They have cornered the corporate desktop pretty well, businesses aren't going to stop buying new computers for all employees every 3 years with Windows and office and the associated backends with SharePoint/Exchange etc.
  - criddell 11y ago
    > Is growth really necessary? I actually agree with you. I think Microsoft's evolution is mostly done. The XBox is their consumer device and everything else is all about enterprise and small business users. Microsoft is a boring, mature, very profitable company. It isn't such a bad thing to be. Their hardware is in an interesting place though. They are really the only company making decent Windows hardware (and I say that as a longtime ThinkPad fan). I would be so happy if they took the Surface Book and simplified it into a traditional laptop with battery life as good as or better than similar Apple machines.
pjc50 11y ago
The alternative is to wait while change passes them buy and then issue a Nokia "burning platform" memo. (Nokia are now a wholly owned subsidiary of Microsoft. If Microsoft collapsed, who would buy them? Apple?)
- tuukkah 11y ago
  Microsoft bought Nokia's mobile phones but the rest of Nokia survives (marker cap $22 billion).
sdar 11y ago
> So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall; medium-term at least) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is more closely tied to a provider; specially with the synergies in their product line.
sdar 11y ago
> So they've decide that the business model of the past two decades is doomed? Windows is a commodity, a) it won't pay for its own engineering team and b) unlike other competitors, Microsoft hasn't been able to capture as much value from the current Windows ecosystem and marketplace. Developing for Windows is becoming a liability: a) your team can't develop only for Windows anyways; b) your team can be more efficient by using a wider set of tools and technologies than Microsoft's own developers, and c) if Windows is not profitable and your product depends on Windows, it better pay for part of Windows' cost. Internal OSS adoption, investing on cross-platform development and in Azure seem all strategic investments in managing the risks above while remaining a software (product) development company. Every other gain from the same strategies (the ones affecting their customer base) are cherries on the top of the cake. > Are investors onboard with that? Not sure they realize what's going on. If they did, I couldn't explain the current P/E ratio in days of declining revenue, a prospect of shrinking revenue streams (overall) and large bets on lower margin businesses. > They just gave away all their products for free? They probably wish they had invested in Office for the Web, Android and iOS much earlier on and with much more intensity, and still have given it for free. They were lucky none of the competitors really stepped up to fill the void. In a cloud-first and mobile-first world, there are multiple revenue stream available once the data information workers process is tied to a platform; specially with the synergies in their product line.
cm2187 11y ago
They used to live of windows licenses but their market share is shrinking if you take tablets and mobiles into account. The new strategy seems to be making money on cloud services, which are platform agnostic, and search engine, of which Windows is becoming just a natural extension, like Android and Chrome OS are an extension to google.com, a probe given for free that Google wants to see in each of their users pockets to keep an eye on where they are, who they talk to, what they do. Hence the extensive tracking of Windows 10, and Windows 10 upgrades being given for free. We may like it or not, or agree that it makes sense or not, but at least it looks like a rational strategy.
eip 11y ago
Sun 2.0?

shmerl 11y ago

> there is absolutely no way they can maintain any form of lockin. They still have a very strong lock-in in graphics though. Why didn't MS join the Vulkan working group? And that's their attitude in general - they didn't become any better than before. They just drop lock-in under pressure by competition. Other than that, they pursue lock-in all the same.

Delmania 11y ago
https://www.khronos.org/members/ https://www.khronos.org/members/ Really? Might want to check that again. Although, I am curious, considering Apple does the same thing with Metal that Microsoft does with DirectX. The difference is Apple has no dedicated console device they sell.
- shmerl 11y ago
  Khronos in general - yes. For example for WebGL (competition and the fact that they lost browser wars caused that). But Vulkan? MS clearly avoided any participation. So you only confirm what I said - MS drop lock-in only when competition starts burning their heels.
- CodeCube 11y ago
  > Apple has no dedicated console device they sell. ahem ... http://www.apple.com/tv/ http://www.apple.com/tv/ :P
cptskippy 11y ago
Microsoft has changed, they now know what will bring the antitrust hammer down. They no longer sabotage or hamper competition actively like they have in the past. Instead they're trying to be everything to everyone and cater to everyone's needs. Does that mean they're altruistic and want to save the world at their own expense? Definitely not. But they also recognize when when they're not going to win a fight and have started to compete in markets they can't own. That being said if they own a market (e.g. PC Gaming) they aren't going to exchange money for warm fuzzies.
- 11y ago

cookiecaper 11y ago

Yes, "cloud" is changing everything, for better or worse. Microsoft realized that enterprise, their primary market, LOVES cloud and that Windows technologies were much less capable in the cloud than open technologies for a variety of reasons, not the least of which is licensing. MS is opening their platform to run on Linux because they want people to continue using Windows, Visual Studio, and .NET as development platforms. The core of MS's business has always been Windows, and secondarily, Office. Since so many people want to use the cloud, and on top of that since so many people want to use the cloud via sexy vendors like AWS, Microsoft needs the heart of their Windows lock-in strategy, which is .NET, to work on it. These moves are defensive of .NET's place in enterprise development, and consequently Windows's place on the enterprise workstation. Once MS feels that .NET is far and away the clear choice for development in the cloud-centric world, they'll work to bring more people onto Windows as the cloud OS of choice (Azure, etc).

Delmania 11y ago
https://github.com/Microsoft/dotnet https://github.com/Microsoft/dotnet How exactly is releasing the .NET framework on Github a lock-in strategy? Like many people, you are missing the point. The operating system is irrelevant. You have people editing Excel spreadsheets in an iPad on iOS, and then switching to Excel on some form of Windows. They've been trying to get Windows Server and IIS as the platform of choice, and they have lost to Linux, Apache, and NGINX. From a technological perspective, they can't afford lock-ins, not when there are so many alternatives. They want you using their services.
- cookiecaper 11y ago
  >How exactly is releasing the .NET framework on Github a lock-in strategy? In the way described in my original post. Open-sourcing the .NET framework means people will help them port it to new platforms. It means that people will be able to get the .NET framework running on whatever is running in their corporate cloud. This means that users will continue to develop in C#, using APIs developed by Microsoft that will always work best on Windows, using development tools provided by Microsoft that will also always work best on Windows. If your company switches from .NET to Java because .NET doesn't work well "in the cloud", then your company starts to ask other questions, like "Well, we don't use Visual Studio anymore, so we don't need to keep paying Microsoft $xx,xxx per year for that. Everyone likes Mac a lot and we don't have to use MS's dev tools anymore, so why don't we move everyone to that? We can start to phase out our Windows Server and SQL Server licenses too since we're not using any other Microsoft stuff and then we won't be paying them another $yy,yyy and we'll be one of the coolest companies around because everyone will be using a Mac." MS's strategy of opening the foundations of their platform so that the applications can run on any backend makes it so you instead say "Oh, we still run .NET apps on our AWS cloud, so we still need Visual Studio, better keep paying MS $xx,xxx." And "oh, SQL Server runs in our cloud infrastructure, so we can stick with that; that's another $yy,yyy for the license this year." If you stay on MS's platform, they can then call you up at any time and say "Hey, switch to Azure, it's a lot cheaper than AWS because we don't charge ourselves license fees." On the other hand, if you move off their platform because MS tech doesn't work well in the cloud, they lose a lot of existing revenue, a lot of potential revenue, and a lot of mindshare and exposure that decreases their relevance in general. The key to MS's lasting success has been .NET. That's what's been propping up Windows and consequently Office. If they lose .NET, they're in deep trouble. They are going to do everything they can to keep it alive, even if it means making it so your ASP.NET web app runs on a Linux server.

cynoclast 11y ago

I can't get over the fact that Microsoft's cloud product is the color of sky without clouds in it.