Windows 10 proves this is a different Microsoft - but is it different enough?

The software company with 14% share of the global operating systems market announced the latest version of its flagship product this week. It’s called Windows – you might have heard of it.

It’s not that long ago – barely six or seven years – that Microsoft could claim that Windows ran on more than 90% of all the computers in the world. Since those computers disappeared into our pockets, its global influence has plummeted like no product ever before. More than 90% of PCs still run Windows – but that’s a declining market.

Of course, those statistics don’t tell the true story of Windows today, and in particular of the Windows 10 launch this week. A 14% market share or not, Windows is still every bit as important as iOS and Android – especially for business technology buyers – even if it has failed to extend its PC dominance into the mobile market.

Perhaps the most important reaction to the latest announcements was not the product reviews, but the widespread acknowledgement that, under CEO Satya Nadella, Windows 10 proves conclusively that Microsoft is a very different company than it was under his predecessor, Steve Ballmer. Nadella has taken the company a long way in his first year in charge.

We now have Office apps for Apple and Android devices – anathema in the Windows-centric Ballmer world – and this week we even have the first version of Windows that will be given away for free, albeit only for its first year, and to Windows 7 and 8 users. Better to get that user base onto Windows 10 for nothing than lose them to non-Microsoft devices.

Most of the coverage of the 10 launch focused on the mobile and consumer features, but actually much of the work went into satisfying the enterprise buyer, with advancements in security, cloud and mobile device management.

The failure of Windows Phone compared to iOS and Android hasn’t dented Microsoft’s revenue or share price, and corporate sales of Windows and related products on PCs remain the bedrock for the Seattle supplier. The HoloLens “holographic” headset will excite gadget lovers, but will be much less important to IT managers than the claimed software portability for Windows 10 applications across every device from smartphone to tablet to PC.

Much like Windows 7 was the operating system everyone hoped Vista would be, it looks like 10 will make up for the botched job that was Windows 8. So, most importantly for Microsoft, Windows 10 ensures it stays firmly in the plans of its corporate customers. And yet…

For Microsoft to really prosper in the new age of mobile and cloud, it still has to shake off some old habits. The 12-month giveaway for Windows 10 will be welcomed, but there are too many lucrative Software Assurance deals in place for Microsoft to make Windows free forever, like iOS, Android or Apple’s OS X for Macs. The company described its approach to supporting 10 as “Windows as a service”, which implies it is slowly moving towards a pay-as-you-go or subscription service, rather than the complexity of Software Assurance – a move already evident with Office 365.

If Microsoft really wants to win IT managers over once and for all, a radical simplification of its software licensing would be the number one priority.

The availability of Office on rival mobiles was a big step to existing in a multi-vendor world – but was also a defensive measure to protect Office revenues against the “bring your own device” (BYOD) trend in corporate IT. Ease of integration between Microsoft’s enterprise products has always been its biggest attraction for IT managers, but the future is far more heterogeneous than that and IT leaders would far prefer to see more Microsoft products unbundled and better able to integrate with rival software.

I would expect that in five years’ time, Office will be a far more strategic product for Microsoft than Windows. You will only pay for the PC version of Windows, and that market will be a lot smaller as more employees use tablets for work – even if they are Windows tablets, where the operating system will be effectively free, with corporate integration features charged extra.

Windows is still too important for Microsoft to ever admit this, but the operating system is no longer the long-term future for the company – that’s going to be Azure and Office 365.

The new, different Microsoft is welcome and necessary, and Nadella deserves plaudits for making it happen so quickly. But a lot of this is about playing catch -up – all he has done is bring the company back up to date, and brought back a little of its old buzz. The Microsoft of the near future is going to be even more different yet.

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