Foley on Microsoft

Microsoft's S+S Strategy Grows Up

"Three screens and the cloud" is the updated take on Microsoft's Software plus Services strategy.

• By Mary Jo Foley
• 11/01/2009

One of the common catch phrases coming from Redmond these days is "three screens and the cloud." Everyone from the Zune team to Chief Software Architect Ray Ozzie to CEO Steve Ballmer is peppering remarks with the "three screens" reference.

Until recently, I didn't give the "three screens" metaphor much thought. It just means that Microsoft sees devices, PCs and TVs able to connect, I thought. What's the big deal?

But then I read a transcript of a recent interview of Ballmer on TechCrunch. After likening "three screens and the cloud" to the movie "Three Men and a Baby" -- was Ballmer talking about himself, Ozzie and Entertainment and Devices President Robbie Bach? -- Ballmer got serious. He described the cloud as more than just a delivery mechanism for applications. Instead, he called it "an integrated computing infrastructure" that feeds those applications.

Ballmer elaborated: "You lay natural, user-interface technologies on there and platforms on there, and then you start revitalizing the UI platform. What you're seeing on phones and TVs: People want more than what's called the classical, graphical user interface -- touch, voice, camera, gestures -- all of that stuff, whether it's Natal or the touch stuff, in iPhone or Windows 7 or whatever it is. It's the next big generational shift in the computing platform. And people are going to want applications, I'll call them that, or services -- depending on whether you like old-fashioned words or new words -- but they're going to want things that service them across those environments."

"Three screens and the cloud" is the updated take on Microsoft's Software plus Services (S+S) cloud-computing strategy. At this point it's obvious that it's focused primarily on consumer scenarios, but that's part of Microsoft's new strategy: Develop a compelling and consumer-friendly proof point, and then flesh out the enterprise complement.

Interpreting Ballmer's remarks, I see Microsoft's attack as being two-pronged. The company plans to deliver a set of services that are common across devices, PCs and TVs. One example is the Zune Video service that will work across Zune HD players, Xbox consoles, Windows PCs and Windows Phones.

But the company is taking this idea further by introducing common "user experiences" across these categories of devices -- things like touch, gesturing and voice-activated search. At that point, the word "Windows" in the names of products -- for example, Windows Phones, Windows MediaRoom, Windows Azure and the Windows operating system -- won't be just a branding mechanism. There'll actually be a set of common Windows elements and services that will be integrated and interoperable.

This is the crux of Microsoft's plan to combat Apple, Google, Sony and, later, its enterprise-side competitors. For Microsoft, the cloud -- meaning Azure, which is no longer in beta as of mid-November -- becomes the repository for services (Live Mesh, My Phone, gaming subscriptions, music subscriptions) as well as user data (Office Web Apps, Windows Live profile information, contacts, points). It's definitely not a vision Microsoft will be able to realize in full in the next year or two. But I'd argue that the Redmondians are further ahead than Google, a cloud vendor trying to figure out a strategy to control screens, or Apple, a screen vendor that has little more than half a cloud strategy.

Microsoft's ultimate game plan is to focus on the software and services powering the screens and the cloud, not on the screens themselves.