Is Microsoft Rising To The Challenge(s)? — Notes From The Asia Pacific Analyst Summit

Forrester attended Microsoft’s Asia Pacific Analyst Summit in Singapore last week for a comprehensive and very timely strategy update with less than a month to go before the launch of Windows 8. Organized under a general theme of Microsoft’s New Era, the update highlighted Microsoft’s strategy for remaining dominant in the post-PC era, where mobility, consumerization, social, and cloud have driven massive IT industry innovation and disruption. Three key observations from our analysts in attendance:

  • Azure is emerging as a key strength as organizations increasingly leverage hybrid cloud approaches. As both a leading provider of public and private cloud services (directly and via hosting partners) and a strategic platform provider within enterprise data centers, Microsoft is very well positioned to embed hybrid cloud capabilities within its platform. This will benefit organizations of all sizes seeking to lower the cost of computing and increase business agility. While we were encouraged by how software license-agnostic Azure’s business leaders appear to be, we believe Microsoft can do a better job of leading with Azure in the enterprise market instead of leading so consistently with its traditional licensed software products.
  • Windows 8 devices will help boost Microsoft’s standing in the mobility market. Microsoft showcased a number of prelaunch Windows 8 devices from its OEM partners, and it’s clear that consumers will have a much better lineup of mobile devices to choose from in the future. Microsoft also presented several Windows Phone 8 smartphones from Nokia and Samsung and has wisely implemented a strategy to identify the top mobile apps in each Asia Pacific country and support app developers in creating versions for the Microsoft platform.
  • Microsoft still leads with products, while customers want solutions. There is no question that Microsoft has a very strong (and strengthening) lineup of enterprise products in its arsenal, but focusing on the breadth of products and technologies is counterproductive if they aren’t logically — and clearly — linked together into the solutions organizations need. The sheer range of products in each market category (such as Skype, Lync, and Yammer in the collaboration arena) often drowns out the company’s key strengths and confuses the market. We often heard customers and Microsoft refer to its “best-kept secrets” and how many customers were unaware of certain capabilities; we believe this is a direct result of too many products being marketed and a lack of prioritization.

Overall, our analysts were impressed with Microsoft’s strategy and believe it can indeed be on the cusp of a new era. To us, the keys to its success in this transformation will be:

  • How fast it can transition its business to a pay-per-use model that is less dependent on “products” and a software license-obsessed mindset
  • How successfully it can create consumer pull with Windows 8 tablets and Windows Phone 8 smartphones

We believe that how well Microsoft is able to execute on these two fronts will determine if (and how quickly) it is viewed as a disruptive innovator capable of standing toe to toe with Apple and Google in the consumerized post-PC markets remaking traditional IT.