Microsoft's renaissance: the Windows 10 launch
After its ‘lost decade’, the tech giant is on a mission to win you back.Matt Hussey July 29, 2015
Apple’s global domination and obsessive devotees owes Microsoft of the 1990s a big thank you note. In its heyday, the software giant was, well, cool. When it released Windows 95, it was so cool, The Rolling Stones, who had never leant their music to anyone, happily supplied its 1981 hit, Start Me Up to a piece of software. Software!
Even David Bowie, the king of cool, wanted to help Microsoft out, and did so in 1998, lending the company his We Could Be Heroes to an advert about guys using spreadsheets. Software was sexy, and all because of a guy named Bill and a guy named Paul.
The world of computer software before all this was a black screen where you typed in things like cd/: and /dir to ask a computer to tell you what was going on. It was a pretty terrible experience. The then two college dropouts thought to themselves, what if you could make the experience, well, a little better for the humans?
Within 20 years of that initial idea, the two had created the world’s most valuable company. In 1999, Microsoft was worth AED 2.2 trillion. In today’s money that would make the Microsoft of the nineties, some AED 730 billion larger than Apple is currently. Microsoft represented counter culture, the little guy, the David to the Goliath-like IBM who had dominated the 1980s and had a habit of squashing smaller companies under its giant blue boot.
The two and their operating system, Windows, had a 90 per cent market share of the world’s PC market. Things were going great. On the day Microsoft went public in 1985, buying one share for AED 77 would have been worth AED 5.5 million at the height of the company’s golden years.
However, within two years, all that had started the change. The company had been labelled an “abusive monopoly" by the US legal system and forced to split into two. Microsoft’s lawyers managed to overturn that decision, but it was this pinprick that would start to change how the world felt about Bill and Paul’s simple idea.
Like IBM before it, Microsoft became the big guy, the bully in the playground, and those guys and girls who supported the company in its early years for its rebellious ideas, soon found new companies like Google and Facebook and made them the plucky underdogs. Microsoft slid into decline. Vanity Fair described the next ten years as “the lost decade” with its place in consumers’ hearts replaced by smaller, more nimble companies.
By the end of last year, Microsoft’s fall from grace was hung out for everyone to see. In its third quarter revenue results, it was AED 11.7 billion short of expectations. The floundering of Windows 8, its sluggishness to embrace the mobile revolution, plus Sony Playstation’s dominance over the Xbox in the home console space, left Microsoft looking forlornly at what once was.
But don’t be fooled. Microsoft is hardly dead. It still switches between oil company Exxon-Mobil as the third biggest company on earth, and still maintains huge sway with enterprise users. But the digital world is now more about the PC that sits on a desk.
This year things could be about to change. With a new operating system – Windows 10 – launching today; its acquisition of phone manufacturer, Nokia, as a maker of its own phones and more recently the company’s agreement to be the console of choice for Facebook’s Oculus Rift, things are looking up for the former behemoth of personal computing. This is the story of Microsoft’s renaissance.
A second coming
The world that Microsoft knew in the nineties changed almost overnight as we moved into the new Millennium. Technology wasn’t no longer only about how well you could put numbers in a spreadsheet, or whether an overly smug paperclip could point out your incorrect use of grammar in a text document.
In 1999, Apple had unveiled the iMac, the first computer that anyone could even remotely describe as “sexy”. That same year, Google announced a AED 92 million round of funding to take a college project and turn it into the world’s search engine. Some 18 months later, Apple would also unveil the iPod, which would change music consumption forever.
Microsoft, meanwhile brought out Windows 2000, a slightly better version of its unbelievably popular Windows 98.
Amid a dynamic and ever-changing marketplace, Microsoft became what many in the industry thought was a high-tech equivalent of a Detroit car-maker, bringing flashier models of the same old thing off of the assembly line even as its competitors upended the world.
For the next decade, the company became a byword for a lack of innovation. But, rising through the ranks was an Indian-born engineer who had quietly developed and grew the company’s server business from a modest earner in 2000 to a AED 73 billion monster, or – to put it another way – a quarter of the company’s revenue in 2014.
That man was Satya Nadella, who in 2014 would be picked to replace the oft-maligned Steve Ballmer – a tough talking economist who many blame for Microsoft’s decade in the wilderness – as CEO.
In one of his first public appearances as CEO, Nadella decided to show how engineers at Skype – which Microsoft bought for AED 29 billion in 2011– had worked out a way of translating a conversation between two people into their distinct mother tongues in real time. He told attendees of the mind-blowing performance that he was challenging the top brass at Microsoft to build the “next new thing”. And they responded in kind.
In May this year, at Microsoft’s annual BUILD conference, developers showcased the HoloLens, a headset that augments reality in real time. The demonstration showed how anyone wearing the headset could tap into their home computer and pin apps, reminders or even movies onto the walls of their apartment.
This new Microsoft believes virtual reality could be that “new thing” they’ve been looking for. So much so that in June, Oculus VR, the manufacturer of the much-hyped Oculus Rift headset announced it would only be compatible with Microsoft’s Xbox One console when it launches in early 2016.
But before we all start donning headsets and losing ourselves in a digital world of our choosing, Microsoft has more pressing shorter term plans. This year, the company will finally join the fray in the smartphone landscape. While previously, Microsoft focused its powers on building an operating system to power Nokia phones, the subsequent fate of that partnership was sealed when the former mobile phone giant’s went bust.
However, in April 2014, Microsoft bought Nokia’s mobile phone division for AED 22.5 billion. “With mobile now firmly positioned as the world’s fastest growing and largest computing platform we see this move as a bold, but entirely necessary gamble by Microsoft. Mobile needs to be a cornerstone of Microsoft's business for future success,” said Ben Wood, an industry analyst at CCS Insight.
Part of that gamble has been to allow Microsoft to show off its machine learning capabilities to consumers through its phone. Cortana, Microsoft’s intelligent personal assistant allows users to control their phone by simply saying, “Hey Cortana”. It can be used to set reminders, ask for directions or even answer questions. While Apple and Google have their own virtual assistants to obey their users every command, Cortana has been programmed to predict the future.
This is a new Microsoft, a Microsoft that knows how to have a bit of fun. One of the most telling instances of the company’s less staid approach to software came in the form of how-old.net. The crude looking website takes data from an uploaded image and tries to work out how old the person is and what gender they are. It was so wildly popular, that at the time of writing the website had been mentioned 751 million times on Google in less than six weeks.
But perhaps the biggest part of Microsoft’s resurrection comes in the operating system at the heart of its demise among consumers. Windows 10, which will be launched this summer is Microsoft’s biggest gamble when it comes to winning back the hearts and minds of those who left for Apple.
The previous version, Windows 8, confused die-hard fans by replacing the now familiar ‘Start’ button with a wall of square tiles displaying apps and services digitally. The reaction was so bad, the normally impartial Washington Post wrote an ‘8 things I hate about Windows 8.1’ op-ed piece and Microsoft quickly issued an update that brought the Start button back.
This time however, Microsoft has taken a different approach. For the past year, the company has been releasing beta versions of the software and asking what people think of it. It then bakes in the suggestions and releases another version. When it is finally ready, Windows 10 will not only work on PCs, but also laptops and smartphones, signifying the moment when Microsoft realised that future was multi-platform.
This new, more inclusive version of Windows has been lead by another new face at the company, Albert Shum. A former designer at Nike, Shum’s job has been to make sure the design of the new operating system is not only beautiful, but what customers actually want.
"Shum getting promoted is a strong signal from the very top that design will now be getting equal prominence with coding, which says something in a company with such a strong left-brain engineering culture," says Suresh Kotha, professor of management at the University of Washington.
Before hand, explains Kotha, design was second fiddle to engineering, meaning how Windows looked was in the hands of people who cared little for Microsoft’s new mantra under Nadella of “delighting people”.
Just a decade ago, Microsoft was a company that didn’t get on with its competitors. In 2000, it was forced to admit that it made Windows increasingly hostile and difficult to integrate with smaller software companies. With the release of Windows 10 however, the operating system will allow developers to take apps from Apple’s app store and Google’s Play and run them instantly on Windows without having to drastically recode them.
Microsoft has done other things to make it more appealing too. From giving existing users of Windows, the newest version for free, and writing a single codebase that works across all types of devices.
This all goes to show that Microsoft, once the class bully of the software world, has grown into a savvy modern day man that realises if it wants to have as big a place in technology’s future as it did in the past, it needs to play nicely with others – and frankly, we cannot wait.