Foley on Microsoft

Growing Pains Persist in Microsoft's Quest for Enterprise Focus

Under CEO Satya Nadella, Microsoft increasingly has been focusing on its enterprise software and services strengths.

• By Mary Jo Foley
• 11/03/2017

Via a series of recent Sunday evening tweets from Microsoft Corporate VP of Windows Experience Joe Belfiore, Microsoft has come the closest it probably ever will to admitting that Windows Mobile is at a dead end.

Those paying attention knew this already. It was apparent that the handful of Windows Phones that are going to get the Windows 10 Fall Creators Update release aren't really getting the full OS. We've known for months that Microsoft was testing with Windows Phone Insiders something called "Feature 2," which isn't "Redstone 3."

Couple that with Microsoft laying off, selling off and writing off pretty much anyone and anything connected to its ill-fated Nokia purchase, and it seemed obvious to many of us that Windows Phone was going nowhere.

But Belfiore's "official" acknowledgement -- coming just days after Microsoft officials announced plans to pull the plug on the company's Groove Music Pass service -- have made some consumer loyalists angry.

Under CEO Satya Nadella, Microsoft increasingly has been focusing on its enterprise software and services strengths. Former CEO Steve Ballmer told me in an interview several years ago while he was still CEO that Microsoft shouldn't and wouldn't ever go the route of IBM and focus only on the enterprise. Nadella's Microsoft apparently won't, either, given the company's ongoing and steady focus on the hardware, software and services side of gaming.

But Nadella is definitely more interested in furthering the business components of Microsoft than the consumer ones. This seems sensible, as the 'Softies haven't shown much aptitude for going head-to-head with Apple, Google and others in consumer-focused arenas.

However, trimming away Microsoft's non-core consumer products and services does create a number of questions and challenges.

First, what does the dead-ending of Windows Mobile/Windows Phone mean for Microsoft's Universal Windows Platform (UWP)? The UWP has offered developers a questionable value proposition for a while, given the weaknesses of Windows Mobile. But why would a developer writing a PC app think about going the UWP route now?

There's currently no Microsoft phone platform to target, and HoloLens and Xbox are device types for which many apps don't make sense. Microsoft's latest Hail Mary here seems to be to populate the Microsoft Store with progressive Web apps and turn these kinds of apps into a new piece of its UWP strategy.

Second, what does Microsoft's dwindling consumer focus mean for its "dual-use" argument/scenarios? For more than a decade, Microsoft officials have justified the company's continued investments in consumer-centric products and strategies by claiming that customers are neither purely consumers nor business users. In some cases, officials went so far as to claim users' perceptions of products like Xbox could influence what they bought and preferred at work. Has the world changed -- or just Microsoft's world view?

Microsoft execs continue to say they want to turn customers into fans. Nadella has said he wanted to find ways to get users to move from running Windows to loving Windows. But fandom is pretty tightly tied to having a consumer presence. While some 'Softies have joked that they believe they can convince users to love their datacenter servers and SQL Azure installations, the reality is that it's hard to hug a server (especially when compared to a smartphone). Microsoft is continuing to design and sell its own line of PCs under the Surface brand and has won over a core base of customers with these products. But some are wondering whether the company will continue to invest in the lower-margin/higher OEM alienation risk space for the long haul.

So now what?

Microsoft is holding out hope that it can keep Windows relevant by connecting and syncing iOS and Android mobile devices and apps to PCs. It's trying to make administrators' experiences of deploying and managing devices more seamless with services like Windows AutoPilot. And it's exploring new device types with the coming wave of partner-made "Always Connected" PCs that will include baked-in cellular connectivity. Will these kinds of moves help make PCs "more personal"? Redmond's counting on it.