Microsoft’s new devices and services strategy

Do you recall when Bill Gates shared his vision of a computer on every desk? Nowadays, some of our knowledge workers don’t even have desks! Microsoft is responding and what we are seeing is a metamorphosis of the company and its offerings. Microsoft’s position is one where the company considers itself a devices and services company.

This is evidenced in the maturation of Office 365, in the Azure partnership with Oracle, and in the evolution of the Surface and RT tablets, and even in the Metro version of Windows 8.  Miro is seeing many of its Clients who are at least contemplating a move to these online services such as Exchange Online or Office 365.

What are the drivers?

  • Cost, obviously, but the benefit seems to be a little ambiguous at best.
  • The availability and performance demands that might exceed or somehow be beyond a client’s current capabilities. More commonly, an increasingly disparate and diverse workforce whose work lives and social lives, and the technologies that support them, tend to blend.

So, where does all that leave Microsoft?  As a service provider for those very same applications that has already been installed on the local desktop. However, as a subscription, hosted services represent an ongoing expense which can lock the customer into terms and conditions and a reliance on this application. And such terms can grow inflexible over time.

Not all the news is bad. If you examine these benefits and look beyond costs, the idea of ceding or relinquishing some control while gaining this fully managed environment capable of supporting your business and your staff, it could end up being beneficial to your business.

We do not anticipate seeing any departure on Microsoft’s part from annuity licensing and annuity pricing. We simply believe that there’s an attraction to multiyear agreements that’s just far too strong for Microsoft to give up. There will be options, of course, but those options will come at a cost. We also don’t feel that any of this will immediately change the landscape for the large established data centers. Adoption of new licensing schemes tends to occur a bit more slowly within those larger environments so Microsoft will continue to support the traditional licensing models (i.e., on-premise) while continuing to urge a migration to managed services and the solution-provider type of environment.

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