Microsoft Focusing On Mobility

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Feb 24, 2015

Microsoft Corporation’s (MSFT, Financial) mobile devices, from Zune to Surface, never really took off and its Windows OS for the mobile platform is lagging far behind rivals, Google’s (GOOG, Financial) Android and Apple’s (AAPL, Financial) iOS. And it is also losing ground on the Office suite front to other software bundles that are accessible from multiple devices running varied operating systems. All this would be a cause for alarm, but the year-old CEO Satya Nadella has done much to keep the software behemoth as a serious contender in the changing personal computing and mobile market.

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Nokia acquisition

Microsoft finished acquiring Nokia’s (NOK, Financial) mobile phone hardware business in 2014, hoping to use an existing popular brand to further the Windows Phone OS platform. Nokia’s handset business was a loss-making enterprise when it was taken over, and Microsoft has already started turning that around by focusing on sales of Lumia devices running Windows Phone. As per the company’s Strategic Rationale for the acquisition announced in 2013, Microsoft expects to have over 15% share of the smartphone market by 2018. If things go as expected, this would be a major boost for Microsoft.

Bundling with Samsung

Microsoft has been party to numerous lawsuits that have been flying back and forth between the big mobile players the last few years. Despite the legal wrangling, however, the company has made a somewhat surprising move by making a deal with Samsung (SSNLF, Financial). Per the deal, Samsung’s upcoming flagship model, Galaxy S6, will ship with pre-installed Microsoft apps such as OneNote, OneDrive, Skype and Office Mobile with a free Office 365 subscription. Given that Microsoft is still struggling to popularise the Windows Phone platform, it makes sense for the company to bundle its products with other prominent phones. That way, it can hope to keep its software products relevant even without selling its own phones.

Office for all

In a big break from its usual closed-system development behavior, Microsoft has just announced that its entire Office suite will now be integrated with a whole bunch of cloud services other than its own OneDrive. For now, the company has tied up with Citrix (CTXS, Financial), Box (BOX, Financial) and SalesForce.com (CRM, Financial). This new approach to computing, combined with the iOS and Android apps for Office, allows people to use the software wherever they are on devices of their choice, which is certain to benefit Microsoft. Instead of relying only on big-ticket corporate orders, this could bring more individual users back to the Microsoft fold.

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Windows 10 coming

Even with Windows 8, Microsoft had a clear direction it was heading in: that of a common experience across devices. And the company is taking it further with Windows 10. As of now, it has only just released a technical preview version of the OS for phones which currently supports a very small number of devices. Therefore, the verdict is still out on the preview. However, the aim of developing apps that will work the same on a phone, tablet, laptop or PC is something Microsoft is taking quite seriously. For instance, the keyboard on Windows Phone 10 will also feature a virtual mouse that will allow users to move the cursor around a text field. There could be some drawbacks from forcing the same build and similar UI across platforms, but on the whole, it is a good strategy that should pay rich dividends by strengthening the Windows ecosystem.

A new approach

Under a new CEO who is willing to break with the past and under the influence of rapidly evolving technology and user behavior that is dynamically changing the market it had long dominated, Microsoft is finally doing what it should to stay a relevant player in the information technology industry. This focus on mobility should help the company maintain its position, if not actually wrest back lost ground from competition.