Foley on Microsoft

5 Microsoft Changes That Mattered Most

• By Mary Jo Foley
• 12/01/2014

As the end of 2014 approaches, choosing the most impactful changes at Microsoft this year was perhaps the most difficult to compile in the many decades I've followed the software giant. The reason: There were so many big twists and turns in Redmond this year, ranging from the appointment of Satya Nadella as CEO and the resignation of Steve Ballmer from the Microsoft board, to the company's biggest layoff in its history.

But it's the less-obvious changes -- the ones that are the result of slowly percolating, less-notable-at-the-time launches and releases -- that end up becoming major forces.

In compiling my top-five list for 2014, I was most struck by events on the Microsoft timeline that were the culminations of months or years of previous work. That said, here's what I consider the five Microsoft watershed moments of 2014:

1. Microsoft Is Now Officially a 'Productivity and Platforms' Company
While many of my Microsoft-watching colleagues considered CEO Nadella's rebranding of Microsoft from a devices and services company to a productivity and platforms company nothing but spin, I disagree. Nadella made clear that while Microsoft will continue to make some hardware, the company is done trying to be Apple. Instead, the company will focus on its core strengths, specifically software and services. And it will release those software and services for all leading platforms, not just Windows.

2. It's Back to the Future for Windows
Windows 8 was too much of a change too soon for the majority of Microsoft hardware partners and customers. This year, the unified Operating Systems Group at the company showed they understood this and took corrective steps to do what's best for the 1.5 billion Windows users. With Windows 8.1, and even more so with the Windows 10 Technical Preview, touch is still supported, but the mouse and keyboard are no longer second-class citizens. The OS team has further welcomed tweaks up its sleeve.

3. Subscriptions Are the Way Forward
When Microsoft launched Office 365 for consumers in the form of Office 365 Home Premium in 2013, many were skeptical as to whether users would find "renting" software rather than buying it outright plausible. At last count, Microsoft says there are 7 million Office 365 Home and Personal subscribers across all mobile platforms -- Windows, iOS and Android. And along with Microsoft Azure and CRM Online, the other two pieces described as the Microsoft "cloud" platform, subscriptions are an inseparable part of the package.

Microsoft Enterprise Mobility Suite, the bundle of Azure Active Directory Premium, Azure Rights Management Services and Intune, is currently a subscription offering for enterprise users only, but expect that target to broaden soon. Also, the new per-user (rather than per-device) licensing for Windows 7 and Windows 8 enterprise customers is another significant piece of the puzzle.

4. Bing-related Back-end Services Get Exposed Publicly
Last year, Microsoft execs trumpeted Bing as more than just a distant-second-place Web search engine. It's a development platform, too. This year, without the trumpets, Microsoft began to expose to its customers and developers a number of new cloud services with Bing connections. This includes the Azure machine-learning service, available in preview; the Office Graph service powering Delve search; the Intelligent Systems Internet of Things service, also in pre­view; and the recently released Microsoft Health service for use with the new Microsoft fitness band. Nadella's claim that Microsoft can't sell off Bing because it's integrated into more and more of its core products finally has teeth.

5. Voice Is the Next Big Frontier for Microsoft
Despite the lukewarm reception received by the touch-first Windows 8 OS, Microsoft is still racing to be first to find alternatives to the mouse and keyboard that might take hold. Voice input is that next big bet. The growing list of Microsoft voice-input investments include Cortana, its personal assistant built into Windows Phone 8.1 (and, soon, Windows 10); Kinect for Windows; the new Skype Qik video chat app/­service; and the Skype Translator real-time-language translation technology set to go to preview this month.

That's my top-five list of changes at Microsoft in 2014. What's yours?