Tag: cloud

Shifting Microsoft’s culture

Microsoft CEO Satya Nadella continues to grapple with changing the company’s culture

“What would be lost if we disappeared?” is the question Microsoft CEO Satya Nadella claims is driving the company’s direction in his latest memo to employees.

In the email obtained by website Geekwire, Nadella told his staff redefining the company’s culture is key to success, “we can do magical things when we come together with a shared mission, clear strategy, and a culture that brings out the best in us individually and collectively.”

That culture though is not static and Nadella is describes how the company needs to focus on helping its customers through its cloud and Windows based products.

For Microsoft this is not new, the change from a desktop and server based licensing business to one dependent upon cloud subscription services has been a huge change for the business since the iPhone was released nearly a decade ago.

The challenge for Nadella however is to keep revenues coming in as the river of gold that was Microsoft’s Windows licenses slowly dries up.

One of the biggest changes to Microsoft’s culture could be in coming to terms that it isn’t such a huge and powerful corporation any more.

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Microsoft and the transition effect

Things are getting tougher for Microsoft in the productivity space

So it turns out Microsoft’s river of gold with productivity software was a transition effect with the company now offering the product essentially free on iOS and Android devices.

While the profits in that product line were nice while they lasted we may start seeing Microsoft’s revenues, which have stood up pretty well in a changing marketplace, start to decline rapidly.

 

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Apple’s grab for the home internet of things

Apple’s iOS8 and OS X Yosemite announcements are part of the company’s attempt to dominate parts of the internet of things.

As usual, Apple’s World Wide Developer Conference in San Francisco yesterday concentrated the attention of the tech world.

This year’s was a little more subdued than usual with the key announcement being around Apple’s new Yosemite OSX operating system, iOS8 and the new developer Software Developer Kit (SDK).

While a little underwhelming after all the speculation about smartwatches and fitness devices, these announcements mark a clear strategy for Apple to lock customers into their products through the cloud, smarthomes and wearable devices.

Open, but closed

Normally discussion about an SDK makes most people’s eyes glaze over, but Apple’s announcement marks a change in the company’s strategy in making over 4,000 APIs – Application Program Interfaces – open for developers to connect their programs into iOS8.

This marks a change for the company in allowing programs to easily hook into Apple’s mobile operating system and while it looks like a move to openness, the ease of making fitness applications, home automation and smart car services actually helps lock users into the Apple ecosystem.

Key to the ecosystem lock-in strategy are the Healthkit and Homekit services offering connections to health and home automation applications which are part of Apple’s Internet of things play, by offering easy access into the iPhone and iPad the company hopes to lock users of third party devices into the iOS world.

Increasing vendor lock-in

Similarly, the cloud services included with Yosemite and iOS8 increase that lock-in making it harder for users to step outside that ecosystem. It’s notable there’s no Android app version of the cloud service which indicates how Google is now Apple’s number one enemy.

Apple’s announcement today shows how the company is positioning itself to lock users into their services as the internet of things rolls into businesses, cars and homes.

It’s an indication the internet of things may well become a world of closed silos and it will be interesting to see how competitors react to Apple’s attempts to be the biggest walled garden.

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Zen and the art of stockmarket listing

Zendesk think elegant and beautiful software is the future of cloud computing, the stockmarket seems to agree with them.

Cloud helpdesk service provider Zendesk today debuted on the New York Stock Exchange with the stocks seeing a 49% surge on their IPO price, taking its value to just under a billion dollars.

Last year Decoding the New Economy had the opportunity to talk to Mikkel Svane, the founder of Zendesk about his company.

Svane is an enthusiastic, open guy and clearly passionate about customer service – a field that’s the ugly stepsister of modern business. As Svane himself says, “no-one ever gets the girls by working on the helpdesk.”

‘Beautiful and elegant’ is a phrase Svane uses to describe his software and it’s notable how many other founders of cloud services use those words about their products – Xero’s Rod Drury even uses it as the company’s slogan.

Like many cloud services, both Xero and Zendesk are still not making a profit and a big fat stage for a stockmarket listing is always a worrying sign that an IPO might have been undervalued.

At the moment though, the initial stockmarket success of Zendesk is a win for some nice guys.

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Microsoft Office goes onto the iPad

Microsoft’s launch of Office for the iPad is another blow to the ailing PC industry.

After several years of stalling, MS Office makes it onto the iPad with an announcement this morning by Microsoft’s CEO Satya Nadella.

The idea of tying the product into the company’s Office 365 and Microsoft’s cloud services make sense although it might be a matter of too little, too late.

Perversely, if Office for the iPad is successful, it could remove one of the last barriers for business and power home users moving off PCs.

Microsoft’s move also shows cloud services are now the main focus of the company; Satya and his team have given up any attempt to shore up the traditional – and immensely profitable – box software business.

That is going to mean Microsoft’s financial statements are going to look very different in the near future.

Regardless of the success of Office for the iPad, what were Microsoft’s core businesses are deeply affected as the company evolves to the post-PC computer marketplace. The challenge is for Satya and his management team to manage that change.

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Hitting the eighty percent of needs

Cloud computing has changed the way we expect software to work and changed the entire industry’s philosophy.

“I don’t use ninety percent of what’s in Microsoft Word” has been the complaint of computer users for years as they struggled through the myriad features of box software products.

In the days of floppy disks and CDs, software developers tried to deliver as many features as they could; despite the fact that the ordinary user only needed a core set of functions and that most items on the menus went untouched.

The result was bloated, difficult to use software. The cloud computing model changes this, particularly in business fields like accounting software.

Last week saw a blitz of releases from cloud accounting services with Xero, Intuit and MYOB all making big announcements.

MYOB announced a wide ranging product refresh, Intuit their mobile service and Xero its new board directors that point the direction for its US expansion.

A key part of all the announcement was how the services are all boasting of their partner ecosystems developing add ons that improve users’ functionality.

Once consequence of having an army of developers plugging into the product means that companies don’t have to ship bloated packages that have dozens of features that are irrelevant to each users’ needs.

Xero’s Australian CEO,  Chris Ridd, put this well during the week by observing that company aims to “address the basic eighty percent of needs”.

This is the exact opposite of the box software model of the past where vendors would try to pack more features into their products which gave rise to the term bloatware.

Microsoft’s Office package was probably the best example of this massive growth in the product size, with the installation files eventually taking up a full 4.3Gb DVD to deliver something that most people were happy with when WordPerfect 2.0 shipped on three floppy disks.

That change to the software model is a good example of how business practices and methods change as technology evolves; it also illustrates just one of the fundamental changes older software companies are having to deal with as cloud services change their industry.

We can still have all the features we want in a software package, but we’ll just have to connect – and probably pay for the add ons.

Today, we’re more likely to be scrambling to find an add-on rather than complaining about features we don’t need.

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Microsoft’s business fightback

Microsoft stake their place in the CRM market. How will this affect companies like Salesforce?

Yesterday a series of vendor briefings showed how Microsoft is fighting back in the enterprise computing market and taking on upstarts like Salesforce in the CRM and business analytics markets.

Microsoft’s briefing presented a series of happy customers – including Colliers International, Servcorp and Metricon Homes – describing how they had deployed the Microsoft Dynamics product.

All the businesses at the Microsoft event said how it fitted into their existing business IT infrastructure. All were Windows shops running Exchange and Sharepoint.

This installed base illustrates Microsoft’s strength in the Enterprise marketplace along with its partner network of resellers and integrators.

Microsoft’s partner network was illustrated at HP’s Next Generation of Information Workers briefing where the company’s workplace of the future vision is very much a Windows service, even the layout is a replica of the Window 8 tiled layout.

The Next Generation of Information Workers product is largely built over Microsoft’s Sharepoint and HP’s own Trim product which again shows how legacy providers are leveraging their established technology.

Whether this is enough to hold off the likes of Salesforce and other cloud based services remains to be seen. Being Windows-centric is particularly tough at a time when many employees bringing their own Apple iPads and Android smartphones to work.

Microsoft’s awareness of its position was shown in the billing of the briefing where the invite billed the session as showing how Microsoft competes with Salesforce.

That competition is manifesting itself with both Salesforce and Microsoft aggressively acquiring social, analytics and marketing platforms to compliment their CRM products.

If the competition was just a matter of size there would be little contest as Microsoft’s $290 billion stock market capitalisation is more than ten times bigger that of Salesforce’s.

But it isn’t just a matter of size. Microsoft are have a legacy business to protect while disruptors like Salesforce aren’t encumbered by older desktop and server products.

What is clear though is that Microsoft is gearing to fight for these markets.

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