Instead of trying to sell phones, Microsoft can now focus on distributing productivity software – namely Office – to as many people as possible, some of whom will pay monthly, as well as getting Windows 10 onto a billion devices in the next few years.
The deal that Microsoft has been giving to Windows users – a free upgrade to Windows 10 from 7, 8, or 8.1 – ends in just under two months, and the company has announced that this really is it, the last chance for upgraders, despite concerns that this may not be the best way to on-board users. Windows 10 currently has 300 million users, according to Microsoft, so it's unclear how an extra 700 million will be added if they have to pay, especially over the given timescale.
Back in business
Nadella makes a valid point that there are a group of users who like Windows-based phones still – businesses – and selling to them makes more sense than competing against Apple, Samsung, and so on.
Features like Continuum, which turns a smartphone into a fully-fledged PC with an optional display dock accessory, have potential and leverage the assets Microsoft has, like an integrated operating system across devices, as well as beating competitors to the punch.
Businesses that are currently experimenting with BYOD are finding that it's costly, both in terms of time and money. Supporting a myriad of operating systems and devices, all with oddities and unique features, is tough and having a single solution – like a Microsoft phone running Windows 10 – certainly has appeal.
This market, however, should be seen as more of a consolation prize for Microsoft than anything worthy of credit, because it won't be anywhere near as profitable as the consumer electronics market, which was what Lumia devices were aimed at.
The future of Microsoft rests on the shoulders of Windows 10, Office, Azure (which recently went cross-platform, thanks to Nadella), and moonshot initiatives like HoloLens. Nadella, so far, has encouraged all of these and, more importantly, has enabled each team to do their best work across allplatforms, not just Windows.
The shackles of being a Windows-only company have been thrown off by Nadella and the results speak for themselves. Going forward, Microsoft is in a much better position to do good – and dumping what remained of the phone business is another positive step forward.
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