What Microsoft did right and wrong in 2013

Microsoft is getting Office 365 right, but that Scroogled campaign is so wrong
Nobody bats a thousand, and Microsoft is no different. Here’s a quick look at five things Microsoft did right in 2013 and five it did wrong.
Right

Office 365 – If success is determined by whether a lot customers buy a service, Office 365 is wildly successful.
In a little more than 100 days, the service had 1 million customers. That was back in May and by October it hit 2 million.

Buying Microsoft Office via a cloud service that’s continually upgraded and available from any of a customer’s Internet connected devices including their phones is apparently appealing.

At about $100 per customer per year, that still pales in what Microsoft takes in from enterprise customers, but businesses and particularly municipalities and universities seem very interested. Larger entities might not be far behind.
Microsoft has been pushing it into educational institutions via a variety of specials, most recently the free use for students at schools that license Office 365 Pro Plus or Office Professional Plus via the Student Advantage program.

Buying Nokia – With Nokia smartphones pretty much driving whatever success Windows Phone has, pulling the company in-house seems like a smart move.

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First, Microsoft should be able to move more quickly to implement upgrades to Windows 8 and to direct sales efforts in places Windows 8 lags but that represent potential growth, such as Africa and Japan. Nokia has high- and low-end smartphones to worm its way into markets at either end.
Nokia Lumia
Nokia Lumia

Nokia also has lines of tablets and phablets (phones with screens between five and seven inches), both of which Microsoft should be interested in serving. As the PC market shrinks, some other device or set of devices will replace them. With Nokia’s assets on board Microsoft should be able to move quickly to provide Windows-based options regardless of which form factor dominates, keeping pace with or beating its OEM hardware partners.

Windows Phone – Microsoft is again nowhere near being number one in mobile phones, but it is making progress, posting number three among the top operating systems.

While lagging far behind Android (52%) and Apple’s iOS (40.6%), Microsoft’s 3.2% market share as of October 2013 is laughably small but still represents the first time it has beaten BlackBerry, according to analytics firm ComScore.

Microsoft doubled its share of the worldwide market between Oct. 2012 and Oct. 2013, making it the fastest growing major smartphone platform, according to Strategy Analytics.

Also important, Windows Phone is making bigger strides in individual regions outside the U.S., particularly Europe where its share has hit double digits in some countries, according to Kantar Worldpanel, a consumer analytics firm.
Nearly all of that growth is thanks to Nokia, Strategy Analytics notes.

Xbox One – Released late last month, the latest Microsoft gaming console is so much more, and so far has had largely favorable reviews.

In addition to games it supports TV watching, split-screen display of applications, Kinect motion sensing, Skype videoconferencing, voice commands and gesture navigation.

Locked in a battle with Play Station 4 for dominance in holiday sales, Xbox One has the potential to do more, according to this Network World review. These include such features as streaming games to PCs or serving as a digital assistant.

Microsoft Dynamics CRM – Part of Microsoft’s larger Dynamics offering, Dynamics CRM is finally making headway against its competitors.

It’s been around for years, Dynamics CRM is showing promising growth, up to 40,000 business customers in July, up from 33,000 customers the year before, again cashing in on those customers willing to go to cloud services.

In this case Microsoft has clawed to being fourth among CRM competitors behind No.1 Salesforce.com, two SAP and three Oracle, Gartner says, pulling in an estimated $1.1 billion in revenues. And analysts say it is growing faster than SAP’s and Oracle’s CRM business.

With a new mobile strategy that has tablets at its center, the service is also poised for continued impressive growth in 2014, still lagging far behind Salesforce.com, but moving in the right direction.
Cybercrime Center

Cybercrime Center – Microsoft opened a dedicated facility last month to house its botnet disruption team and partners willing to help in the cause.

While the company had such a team before, the center pulls together a larger group and acts as nexus for branch cybercrime investigation offices around the globe. Its emphasis on collaboration with partners means it has the potential to move quickly to draw in new resources to fight all forms of cybercrime.

The company’s string of high-profile botnet takedowns over the past few years have highlighted the sophistication of criminals using the Internet to commit crimes and the ever-changing methods crime fighters have to employ to succeed. The Cybercrime Center should help elevate the law-enforcement effort from a game of Whac-A-Mole to something more effective.
Wrong

Windows 8.1 – In a way Windows 8.1 was the right thing to do, but it didn’t go far enough.

Microsoft responded to a number of complaints about Windows 8 and added new features, but the package still comes up short capturing the imagination and more important the cash of potential customers.

According to multiple organizations that track use of operating systems, the numbers show that Windows 8.1 isn’t capturing those customers finally abandoning Windows XP and isn’t making significant headway into businesses.

Windows 8.1 takes some getting used to and it requires a touch device to be appreciated fully, but it has its limitations. Apps that run on Windows 7 run on Windows 8.1 but look and behave just as they did in Windows 7. The apps that show off Windows 8.1 to its best advantage are approaching 150,000, they just aren’t compelling enough to draw customers.

Perhaps as businesses and consumers decide what devices will replace PCs, Windows 8.1 and its successors will do better. Those new devices will likely include touch and mobility, two areas where Windows 8.1 does well. But for 2013, it was at best ahead of its time.

Surface RT, Surface 2 – Despite a $900 million write-down of the Surface RT tablet – a stark acknowledgment of its failure – Microsoft has pushed ahead with the next generation of the device called Surface 2.
Surface

While it does come with Microsoft Office – something you can’t get on an iPad – the device runs only Windows Store Applications – those designed for the Windows RT operating system, vetted by Microsoft and available online only through the Windows Store.

Reports indicate that in some locales Surface 2 supplies have run dry during the holiday shopping season, but Microsoft doesn’t say how many were available in the first place so it’s difficult to say whether popularity of the new device is on the rise. With the pending sale of Nokia to Microsoft, Surface 2 seems like an unnecessary and not very popular product.

Regardless, Microsoft seems committed to it for at least a little while longer. A story by Marcom News says Microsoft has signed up an agency to run a four-month ad campaign for the device.

CEO search – It was unnecessary to announce as much as a year ahead of time that the company is looking for a CEO to replace Steve Ballmer.

It acts as a distraction that deflects attention away from other efforts that would be good for the business and doesn’t make Ballmer’s job any easier in the meantime.

Keeping mum until a replacement was signed up would have been the way to go.

It’s not helping the top candidates, either. Alan Mulally, rumored as the top contender, is CEO of Ford, whose board is getting cranky that his possible selection is outshining the company’s efforts to promote an ambitious 2014 lineup of new cars.

Scroogled – This apparently well-funded campaign to attack Google Chromebooks and the way Google mines personal information to sell to advertisers seems a bit much.

Microsoft has nailed down the scroogled.com domain name and keeps the site updated with content intended to send Google customers flocking to Microsoft. It’s also got scrooglednews.com, an aggregation site that posts links to stories that point out Google transgressions.

The company even sells a line of Scroogled apparel on its online Microsoft Store so equally rabid anti-Google customers can pay to wear Microsoft negative advertising.

Regardless of the merits of Scroogle arguments, the campaign comes across as silly and spiteful.

Apple parody – In the same spirit (bad) as Scroogled, Microsoft produced a video making fun of Apple’s iPhone.

It looked thrown together but mainly it wasn’t funny. Microsoft took it down and acknowledged it as a mistake.

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