Why I am Bullish about Microsoft’s future

on February 6, 2015

The first time I visited Microsoft, they were in their new red brick offices in Bellevue, Washington and they had less than 50 people. You could walk down the halls and see Gates plugging away at his keyboard and Paul Allen in a small office coding. In fact, I was told I was one of the first analysts to ever visit them. At this time they were just gaining ground with their OS thanks to IBM’s decision to use it in their first PC.

I have been fortunate to watch Microsoft grow from the start and back then they became a high priority for me to study as an analyst since what they did greatly impacted the growth of the PC industry. Once Steve Ballmer arrived, I got to know him and found him to be very smart and very loyal to Gates’ and Microsoft’s goals. That was not a bad thing and, in fact, it eventually was the reason he took over for Gates once Bill stepped down. Often when Ballmer would come down to Silicon Valley, he invited me to lunch and we would talk shop and discuss Microsoft’s project of the moment. To say Ballmer was Microsoft’s biggest cheerleader would be an understatement.

Over the years, I was asked to work and advise on many different projects at Microsoft, from doing an internal review of their Office strategy to working on various mobile and tablet projects. (side fact — I asked Mike Maples to put word count in Word and that was added in the next rev.)

I did a lengthy review of their Pen Computing initiative and told them I thought it was dead in the water. I got a lot of flack for that. I also was skeptical of their early watch strategy and was very much against their pursuit of Windows CE as well as their original Windows mobile OS — it was weak in design and always at odds with the desktop Windows group. And when Melinda French (now Bill Gate’s wife) came down to show me BOB, their consumer friendly UI for PCs, I wrote that, while it was interesting, I thought it had no chance to succeed since graphical UIs would do a better job at making PCs easier to use. Not long after that, Microsoft introduced their first version of Windows.

By the late 1990s, I was very concerned about Microsoft’s Windows only focus as I started to see the market expand well beyond PCs and move to a stronger mobile future. Through most of the early 2000s, I felt Ballmer had become so Windows-centric he could not see the world of tech expanding and splitting in different directions. During that time, I became more critical of this direction and, as Apple gained important ground in music players, smartphones and then tablets, I felt Microsoft was way too Windows-only focused and it was missing the opportunity to expand the company well beyond the Windows franchise that, while still important, was keeping them from innovating in new areas and expanding Microsoft’s overall growth and reach.

Apparently Microsoft’s board had similar issues with Ballmer and he was relieved of his role as CEO and was succeeded by Satya Nadella. I have only met Mr. Nadella once at a Microsoft event and that was only briefly. But, since he has taken over, I have seen a new Microsoft emerge, one that is becoming much less inclusive and finally embracing the diversity that is driving the next wave of personal computing. Windows 10 is a great addition to the Windows OS and fixes the sins of Window 8. Although Windows mobile is a distant third moblie OS, it is a very good one and I hope developers support it. Microsoft is finally doing something I lobbied for in multiple meetings in the early days of Windows mobile. I did an internal piece for Microsoft that argued they needed to make the Windows UI consistent across any device they supported. If a person learned the OS on one device, they would know how to use it on any other Microsoft supported device. If you look at Microsoft’s current strategy today, it basically maps that vision and the Windows UI is becoming consistent on all of their devices.

When Ben and I visited Microsoft last fall, I found the company had a refreshingly new view of the tech world and was embracing the multi-platform world that is driving tech growth. In one meeting I had with a team leader in software, he told us his charter was to make his software work on all popular operating systems and showed me one of his apps on his own personal iPhone. I am now using Outlook on my iPhone and it has replaced Apple Mail as my main email client.

This would have never happened under Ballmer. Nadella is extremely realistic about making Microsoft relevant to all platforms and mining for dollars well beyond the Windows franchise. This is fantastic for Microsoft and I believe this new strategy is going to make them more relevant to the tech world. That is why I am bullish abut Microsoft again. To me, this is a new Microsoft and one that has broad potential if they keep following this strategic course that builds on Windows but expands well beyond that franchise.