Foley on Microsoft

2017 Microsoft Predictions: New Devices and AI

Look for a big year for Microsoft hardware and the continued adoption of Office 365.

• By Mary Jo Foley
• 01/04/2017

When I made my 2016 predictions of what Microsoft had in store for the year, I had anticipated the company would launch a Surface Phone and forge a big-bang partnership with Google. Nope and nope. Looking ahead to this year, I'll take another stab at foretelling what will come out of Redmond this year.

I'm relatively confident that we're going to see Microsoft field at least a few new Surface-branded devices in calendar 2017. A Surface Pro 5 and Surface Book 2 are sounding like they could arrive this spring, from what I'm hearing.

Also around that time, I believe Microsoft has a second-generation HoloLens headset in the wings. I don't have any insight as to what's coming in HoloLens v2, but I'd expect it'll come with better battery life, a lighter, faster processor and, possibly, a somewhat easier-to-digest price (at the very least less than what the current headset commands).

The long-rumored "Surface Phone" may possibly debut by year's end or slip into 2018. But whenever it finally does emerge, I'm betting it won't look like the current crop of consumer smartphones on the market today. It may be more of a mobile device that also can make calls than a dedicated phone. Maybe it even will be running full Windows 10 on Qualcomm with x86/Win32 emulation rather than Windows 10 Mobile. Will Microsoft make its own Amazon Echo/Google Home competitor in the coming year? My bet is no, but maybe one or more of its PC/device maker partners will give it a shot. I'm also not expecting to see a new Microsoft Band or other similar fitness-focused wearable from the company in 2017 (and possibly never).

On the Windows PC side of the house, I'm feeling confident that Microsoft will deliver two feature updates to Windows 10: The Creators Update ("Redstone 2") in the Spring/March 2017 time frame and "Redstone 3" in the Fall. Mixed in with the flashier consumer stuff (3-D, Home Hub, digital storytelling and photoapps/services) will be a lot of useful security and manageability features for Microsoft's true core market -- business users.

Microsoft will continue to make a lot of noise around hybrid cloud, bots, voice input and extended reality in the coming year. Like its competitors, Microsoft will tie almost every product and service development back to AI and machine learning. But the real buzz among business users will be around much more mundane, real-world products and services, such as LinkedIn integrations, Dynamics 365 ERP/CRM and SQL Server on Linux.

The company will continue to beat the collaboration/teamwork and cross-platform drums with its Office 365 and developer-platform lineups. I'm hoping -- but not confident -- that we'll see reliability and synchronization improvements to the consumer versions of Skype and OneDrive in 2017. Microsoft did actually make some progress in 2016 in the business versions of both services.

Looking back at 2016, Chief Operating Officer Kevin Turner's departure resulted in the reassignment of his duties across several existing groups/executives. The Windows Server engineering team moved to the Windows and Devices organization. The Applications and Services Group was carved up and a new AI and Research group created.

Those moves resulted in a bigger Windows and Devices org and a smaller, separate Office org. As there were few organizational changes in the Cloud & Enterprise (C&E) unit in 2016, I'm thinking that unit will be ripe for some kind of rejiggering in 2017. Regardless of what does/doesn't happen in C&E, I'm expecting Microsoft to continue to remain "on track" to hit its projected $20 billion annual run rate for commercial cloud by 2018, and to continue to refuse to break out its Azure revenues separately.

Some things I don't expect to change in 2017: Microsoft's mission statement ("Empower every person and every organization on the planet to achieve more"); its executives' continued love of the "digital transformation," "growth mindset" and "We love Linux" messages; and the ability to still surprise us Redmond tea-leaf readers a few times during the year.