After Sinofsky Can Microsoft Move Beyond Windows?

by Steve Wildstrom   |   November 14th, 2012

Windows 8 logo (Microsoft)The departure of Windows chief Steven Sinofsky, hard on the heels of the release of Windows 8, came as a shock, but not a surprise. But the important question is less what led to the departure of the talented but abrasive Sinofsky than how Microsoft uses its latest executive shuffle to move forward in a tech world it no longer dominates.

Microsoft is, in many ways, the anti-Apple. Unlike Apple’s tightly centralized, unified structure, Microsoft has long been a collection of fiefdoms. Although promoting Windows was the goal of just about every Microsoft product and effort, operating groups were often silos and turf was fiercely defended. Sinofsky, who had run the Office group, took over Windows after the Vista fiasco and proved his chops with the successful delivery of Windows 7 and Windows 8. (While it is far too early to judge the commercial success of Windows 8, it was an exemplary development process, especially in contrast to the chaos that gave us Vista.) Along the way, Sinofsky built the power of the Windows group by gaining control of  mobile device efforts. (Windows Phone operations are part of the Entertainment & Devices group, but have increasingly come under the sway of Windows.)

It’s hard to overestimate Microsoft’s dependence on Windows. The chart shows the company’s operating profits by division:

Windows and Microsoft Business are responsible for nearly all of the company’s profits, and the business division, consisting primarily of Office and Office-related back-end services such as Exchange and SharePoint, is very heavily Windows-dependent. Only the tiny Entertainment & Devices unit (primarily Xbox) and the money-losing Online Services (mostly Bing) and meaningfully independent of the Windows empire.

The problem Microsoft faces today is that it has to move beyond Windows, but its recent instinct seems to have been to extend the franchise. The Surface tablet is an interesting product, considerably more PC like than the iPad and Android tablets. It’s a good match for a space Microsoft is trying to create between traditional PCs and the new tablets, heavily dependent on a keyboard and with an operating system that is a stripped-down version of the full Windows 8 experience and access to Microsoft Office applications–but only at the price of running in traditional desktop mode.

I don’t think Microsoft can afford to leave the more tablet-y market to the competition, because while the Windows and Office lines of business will remain profitable for years to come, they provide very little opportunity for growth. Sinofsky was widely blamed, or credited, with derailing the imaginative Courier tablet that came out Entertainment & Devices group. I don’t know that Courier was the right device for Microsoft to make or even if it was a viable product, but it was very un-Windows-like in a way that probably sealed its fate.

For many years now, Microsoft has been built on the proposition that its products exist to promote the greater glory of Windows. This kind of thinking has been most destructive in the mobile business, where efforts to force a Windows-like user interface onto Windows Mobile devices produced some of the world’s clunkiest smartphones. The unification of the Metro design language, originally developed for Windows Phone 7, across desktops, phones, and tablets is a step in the right direction. But when you scratch the surface on the Windows 8 desktop or go beneath the Surface,  you find the same old Windows. And it is increasingly a bad fit for the way people want to use devices today.

Julie Larson-Green and Tami Reller, who are taking over Windows engineering and business operations, respectively, are able executives with solid track records. But they won’t have Sinofsky’s power within the organization. If that means they will be less able to protect the windows-centric thinking that has long been at the heart of Microsoft, it will probably be a good thing for all concerned.

Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.
  • Englishmole

    For God’s sake man, proof read your copy!

  • Rich

    So many companies, when it came time to move into the future, have clung to the old way because it was (1) too profitable and (2) too ingrained a mindset – and it always chokes the company. This applies preeminently to Windows and is most obvious in the OS for Surface. An operating system for a supposedly futuristic product should neither have been named Windows nor been so closely tied to it. The question is how much will Microsoft continue to let the past hold them back.

  • Thorntondw

    Microsoft should really double-down on its Office products, especially for iOS and Android. Office is ubiquitous in enterprise and most everyone from that business environment would love to have the SAME Office products on their tablets. I will purchase the iOS office suite for my iPhone and iPad as soon as it hits the App store.

    Of even more significance is that Microsoft needs to make the non-Windows Office products equally as good as the Windows version – seamlessly working between all environments (Windows 8 RT, Windows 8 Pro, Mac OSX, iOS, Android and any other significant platform.

    This would be a very profitable way to break the dependence on Windows itself and cement Office as the primary suite worldwide.

    • steve_wildstrom

      Porting huge apps like Word and Excel to Android and iOS is an enormous undertaking. In fact, I’m not sure it is possible to implement Excel VBA programming in iOS. And Outlook won’t even work on Windows RT. What you are far more likely to see is stripped down apps that are format-compatible but upport only a subset of full Office functionality. There’s also a huge pricing issue. Can Microsoft sell iOS Word for $10 like Pages? (Rumor is that Microsoft will require an Office 360 subscription.)

      • Rich

        Microsoft either can’t or won’t sell iOS Word for $10 like Pages. The company has got one foot in the distant past and the other foot in the ever-advancing future, and it’s already hurting their legs.

      • Mel Gross

        But what’s interesting, and concerning for Microsoft, is that the iPad, like it or not is very successful in business and government. Successful as in organizations having tens of thousands of them already. Companies like Halliburton and SAP each now have well over 20,000. They are replacing notebooks in most cases very successfully.

        All of these government and business users are not using Office on these machines, and it doesn’t seem to be a problem. If Microsoft doesn’t move quickly here, the moment will be lost.

  • lucascott

    It seems to me that Microsoft is trying too hard to do something different. It’s an admirable idea but also perhaps misguided. In trying to be all things to everyone, in contrast to what Apple etc are doing, they perhaps forgot to ask why the other side chose as they did. If they understood the reasons they might have made a different decision. Instead it feels like they just made a hot mess