Is Microsoft Still A Windows Company?

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” — Charles Darwin

A company’s business model needs to undergo the same that the species need to, to survive & sustain. It needs to adapt to the people’ needs, invest in the company’s future and make the necessary changes to its model before it turns archaic.

There are many examples of the businesses that couldn’t embrace the change and eventually, time did what it does best. Yahoo - while enjoying a strong market in the desktop segment, couldn’t convert it into mobile applications and Kodak - stuck with its analogue-photography related products & couldn’t adapt to the digital photography era, are few companies that couldn’t adapt and resulted in downfall.

Microsoft, the software giant with its head office situated in Redmond, USA, famous for its universal products — Windows and Office. But in recent years, there have been several changes in the working and business model of the company that led to record growth of the company revenue. Windows developer team was reshuffled, the core development of Windows was moved to a cloud and AI team, open-sourced some of the key infra are some of the key pieces of the puzzle. Did the Redmond company change its view over a few technologies to increase the growth of the company? Did Microsoft pivot its primary Business from being a software company to something else?

To understand the bigger picture, let's discuss the things from START.

Gates & His New Business

Gates with his co, Paul Allen, released the first-ever product of Microsoft called “Altair BASIC” in 1975, developed to run on the first commercially successful personal computer called “Altair 8800”. Software piracy started to become its concern even from its first product. After Gates found about the rampant software piracy taking place in the hobbyist community, he wrote an open letter to the computer hobbyists expressing his dismay over people treating software as a free entity but hardware, something to be paid.

This describes that the foundations of the firm were laid on treating software as an intellectual property which deserves a dime to be spent on it to get a hand on it.

After the success of its initial product, they soon worked with IBM, to develop an Operating System for their new IBM PC. Starting with an OS with a command-line interface, called MS-DOS, it went onto insert a graphical layer on top of it and release the first version of Windows — Windows 1.0, in late 1985. From then on, it had been releasing a new major upgrade after nearly every two years.

Windows 1.0 logo

Linux on its Way

Parallelly, Linus Torvalds’ Linux kernel started gaining popularity in the open-source world. And by the start of the 21st century, several distributions have been developed using the Linux kernel.

Open source OS distributions started taking a strong uphold in the 21st century. Companies like Red Hat & VA Linux(now known as Geek net Inc.) started using Linux distros, to come up with their products and that gave Linux more reach in the PC and enterprise sectors. (by giving much-needed customer-support and professional quality assurance to the open-source.)

Microsoft Vs Linux war

There’s no doubt Microsoft has been losing-out its customers in its almost-monopoly game. Hence, in an interview in 2001, the then CEO of MS, Steve Ballmer infamously quoted Linux “a cancer that attaches itself in an intellectual property sense to everything it touches.” and followed by similar comments by other MS top-heads. Surely, those comments helped them to earn revenue.

But at the same time, they knew that in the long run, they couldn’t continue this approach. It was high time they found their next revenue earner.

What’s The Next Cash Cow?

So, Microsoft can’t use Windows as a cash cow anymore. Hence, they started trying out their luck in different businesses. It launched its cloud computing platform — Azure, Windows phones and later proceeded to buy Nokia to expand its mobile presence and also released their new surface products.

Nokia, a Finnish phone company with strong hardware but facing the problems with software was idealized as a perfect match for the software giant. Then released Windows 8 in the favour of its Windows phones targeting its new mobile users but it almost forgot its PC users. The win 8 UI was confusing and difficult to learn for many, especially when used with a keyboard and mouse. To address the problems with win 8, Microsoft released win 8.1 after a year of its predecessor’s. But it ended up solving only some of them.

At the end of the day, Windows couldn’t stand against the already market leaders Android and iOS. Phone business didn’t give the aspired success and surface products worked but it never had the potential of becoming the face of MS due to its limited market segment.

Windows as a Service

With the announcement of Windows 10 in July 2015, MS changed the whole structure of how Windows upgrades work. And in Nov 2015, MS announced Win 10 as the “Last Version of Windows”. And time proved that it’s indeed a killer move by MS.

It no more wanted to mint money by selling RETAIL copies of new windows versions. Since it’s time they need to save their customer-base and even try to gain as much as possible before LINUX takes away all. They announced a free upgrade for all the win 7 and win 8 users and most of the revenue gaining only from bundling of Windows along with the new PCs purchased. That made win 10 user-share reach more than 60% among all the windows operating systems.

Now, after getting all the active users on a single stage, what Windows trying to become is, the best option for every segment from layman’s to the developers. This can be recognized from its recent updates in which along with regular UI & security improvements, there has been new WSL (Windows Subsystem for Linux) feature to ease the usage of BASH in Windows and in recent May update they even went on to include a custom-built Linux kernel. Who saw that coming?

Now, Ubuntu & Kali Linux are just apps in the Microsoft Store that can be installed whenever we need (It’s not that simple though but at least they tried) and with an in-built kernel, it won’t be that heavy to run. At present, it’s the only BASH, no GUI of any Linux distro. But with updates at this pace, even GUI might end up near soon.

MS: The Cloud Platform company & A Not-so-Anti-Open-Source company

Microsoft announced “ Windows Azure “ in 2010, basically offering windows OS on the cloud. Azure started earning good revenues very soon but compared to its competitors, it was not proving it’s worth. MS knew that it’s hiding its full-potential. Because a major percentage of the clients/enterprises have their workloads, projects, and infrastructure depending on Linux & other open-source software, suddenly it made them no sense at all to view Linux as a competitor.

Soon, they made the Azure the best place to run Linux OS and changed their business title to “Microsoft Azure” as the old one doesn’t relate anymore.

As the Azure moving up the food-chain in Redmond, Microsoft made several key moves to soften its stance on open-source software. MS open-sourced its .NET framework, Typescript language and the VS code, the best IDE in the market now. And the best of all moves, it acquired Git-Hub, the mother of modern open-source.

Now, Microsoft is the largest contributor to the open-source with more than 4k employees contributing to open-source. (This line still feels like irony, isn’t it?)

Microsoft’s cloud trip has been an expensive ride but is proving to be worth the price as it’s creating a record growth of revenues YoY for the cloud platform giant.

What’s the Key Takeaway?

The company that built its empire on selling the software adapted itself to the new open-source era, without losing its software business. With its primary business model undergoing a transition from retail earnings to minting money from cloud computing services, Gates’ company grabbed the chances (surely missed some) and stood the test of time.

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Check out this: Do you know, Windows is working on a new Windows 10X for dual-screen surfaces. Click Here