Microsoft’s Next CEO Will Contend With Mobility, Platforms, And Consumerization

Microsoft CEO Steve Ballmer announced today that he will be retiring within 12 months. My Forrester colleague Ted Schadler laid out some of the strategic challenges his successor will face in coming years. Here, I add to Ted's analysis.

Microsoft remains one of the great global technology companies, a solid member of the Fortune 50. Although it no longer enjoys the reputation for innovation it did in the 1990s, it’s a critical player in every aspect of end user computing (including devices, software, browsers, development platforms, and services) and of other technology product and service markets.

As CEO, Steve Ballmer solidified Microsoft’s stronghold in enterprise solutions. Microsoft built and maintained — or built and made itself into a key challenger — in several enterprise markets. Microsoft Office remains a titanic success, even as it faces lower-cost competition from Google and others. Windows Azure has been cultivated into a full-fledged contender in the cloud services market. Exchange remains entrenched in enterprises, as do many of Microsoft’s Server and Tools offerings. Microsoft remains the company to beat in some of these markets, and has become a formidable challenger (e.g. as Azure takes on Amazon Web Services) in others.

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Q&A with Stephen DeWitt, Senior Vice President of Enterprise Marketing at Hewlett-Packard

I recently spent an hour with Hewlett-Packard executive Stephen DeWitt, a longtime leader at the company who is currently leading up HP’s enterprise marketing efforts. I wanted to learn more about the value proposition of products and services HP is selling to infrastructure & operations professionals and to understand HP’s vision of the future for enterprise customers.

“It’s easy to think of HP as a ‘PC and printing’ company – and we’re obviously a huge player in those traditional product areas – but we have a broader vision for enterprises and for workers…all built around the new style of IT,” Stephen told me. “Our new enterprise campaign, for example, is going to introduce people to the degree of breakthrough innovation we are providing customers today, and how co-innovating with HP can empower your business in the dramatically changing world ahead.”

To give you a deeper sense of how HP serves its enterprise customers, here are some edited excerpts from our conversation:

Q: What’s HP’s overall vision for enterprise solutions? How do you make that vision tangible and concrete for your customers?

HP is a portfolio company, from core to periphery, from cloud to the device. We work very closely with our customers to provide end to end solutions rather than just ad hoc or best of breed products, and we focus on solving for business outcomes and co-innovating with our customers.

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Our Collaborative Computing Future: Oblong’s Mezzanine

When people think of futuristic user interfaces (Forrester analysts included), they often invoke the 2002 Tom Cruise movie Minority Report. The imagery in the movie offers a compelling vision of how next-generation technologies – gestural control, voice command, 3D visuals, multi-screen interactions – can empower computing experiences.

Where did Minority Report get this vision? From a man named John Underkoffler, Chief Scientist at a company called Oblong. He designed the computer interfaces in the film.

I had the pleasure of visiting Oblong’s Boston office recently, where I saw demonstrations of several technologies. Most interesting to me was the company’s Mezzanine offering, an “infopresence” conference room that the company sells to enterprises today.

The solution involves equipping a conference room (or multiples – it works as a long distance telepresence location) with a number of monitors (5 in the room I visited), teleconferencing equipment (industry standard products work well), and ceiling-mounted sensors (for interpreting gestural controls), and a whiteboard (a physical one, but visible to a camera). Workers control the room with a wand, which works via both gestural controls and a button.

Putting all of these things together, workers can collaborate both within the room itself and with remote teams (or remote individual team members). The resulting experience, in my view, offers two sets of benefits:

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Global Business And Consumer Tablet Forecast Update, 2013 To 2017

In our new reportMichael O'Grady and I outline our latest update of the tablet forecast. While in previous years we focused on the North American consumer market, this year’s report expands the analysis to include our viewpoint on the global market for both consumers and businesses

Forrester Research ForecastView Trends

Fundamentally, as we have been writing about for some time, we believe tablet sales and penetration will continue to grow rapidly. In developed markets, they will streak past “mass market” status to become what we term “mainstay” devices – a third form factor carried by most online consumers. Our forecast indicates that tablets have hit hyper-growth. By 2017, we find that:

  • In North America (US/Canada), 60% of online consumers will own a tablet by 2017, making it a majority device. In Europe, 42% of online consumers will own one. While penetration rates won’t reach even 25% in aggregate in the developing world by that date, tablets will reach majority status in leading Asian markets like Singapore and South Korea.
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It’s Time For Enterprises To Consider Chromebooks

Since their introduction over two years ago, the buzz around Chromebooks hasn't always been positive. Although recent news about Chromebook growth in the consumer market has improved this picture, negative press still hasn't been hard to come by this year.

Infrastructure & Operations professionals with responsibility for end user computing and device portfolios should ignore the naysayers. In fact, it’s time to take a fresh look at whether Chromebooks might fill a legitimate computing niche for your company.

In a major new Forrester report, we present an analysis of the enterprise Chromebook space. Let me first be clear that Chromebooks won’t replace all or even most Windows PCs, Macs, and tablets. But for companies that are (1) willing to segment their workforces (offering Chromebooks to specific classes of workers in a mixed environment with PCs and tablets), (2) adopting Gmail and/or Google Apps, or who are (3) deploying the devices in a customer-facing (think kiosk) scenario, Chromebooks are definitely worth investigating.

Moving workers to Chromebooks generates these benefits (plus others covered in the full report):

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Our Gesture Controlled 3D Computing Future: Beyond Leap Motion

Today saw the release of Leap Motion, the 3D gestural navigation controller for PCs and Macs. Like its cousin the Xbox Kinect, Leap Motion uses sensors to track physical gestures. Where Kinect tracks your entire body, Leap Motion tracks fine movements of the arms, hands, and fingers. In turn, this allows users to input information, enabling touch-free 3D gestural navigation control.

Leap Motion can be used to navigate operating systems (Windows, Mac), to cruise through Google Earth,  to draw a digital picture, to generate experimental music, or to dissect a virtual frog, as seen in the AirSpace Leap Motion app store. In the future, surgeons could perform surgeries and airline pilots could control their plans with this solution, according to the vendor.

The success or failure of Leap Motion will derive from the strength of the app ecosystem that grows up around it:

  • As with touch screen, ground-up applications work best... “Touch-first” applications – those reimagined from the ground up with touch as the primary navigational method – generally appeal to users better than “touch-second” experiences where touch was added to an existing application. Similarly, gesture-controlled experiences need to be rethought from the ground up.The same is true for voice-controlled apps. Developers will need to change the way they work in coming years, collaborating with designers and experts in human anatomy, for all of this to work. Until that happens, the technology will remain marginal.
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With Windows RT Struggling, Microsoft Should Bring Office To iPad

One noteworthy detail emerged from Microsoft’s quarterly earnings call yesterday: A $900 million write-down for “inventory adjustments” related to the underperformance of Windows RT. This result didn’t come as a surprise because:

  • Microsoft’s Windows RT strategy has long been puzzling. Launching the Surface RT device before the Windows 8-based Surface Pro offering never made sense – an insufficient number of Modern UI apps made the Surface RT hard to position and sell from the beginning. Samsung recognized the shortcomings of RT early on, exiting the market a mere three months after RT’s release.
  • Microsoft still hasn’t convinced developers that Windows RT should be a top priority. Our survey of 2,038 global software developers revealed that developer support for Windows RT trails Windows 7, Windows 8, Apple iOS, Google Android, and even Apple OS X. For example, while 21% of global developers support or plan to support Windows RT, 64% say the same for “Windows 7 and earlier versions.”
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Our Voice-Controlled Computing Future: How Workers Use Voice Commands Today

Voice-controlled intelligent assistants offer a tantalizingly productive vision of end user computing. Using voice commands, users can extend the computing experience to not just mobile scenarios, but to hyper-mobile, on-the-go situations (such as while driving). With wearables like Google Glass, voice command promises even deeper integration into hyper-mobile experiences, as this video demonstrates. And voice controlled intelligent assistants can also enable next-generation collaboration tools like MindMeld.

In spite of this promise, there remains a lurking sense that voice control is more of a gimmick than a productivity enhancer. (As of the time I posted this blog, a Google search for Siri+gimmick yielded… “about 2,430,000 results”). To see where voice control really stands, we surveyed information workers in North American and Europe about their use of voice commands.

Information workers’ use of voice control today:

In reality, many information workers with smartphones are already using voice commands – at least occasionally. Our survey revealed that:

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Q&A with Tod Pike, Senior Vice President, Samsung Enterprise Business

Today, Samsung places much greater strategic emphasis on its enterprise business, which is now a “top three priority” globally for the company. Symbolizing this new commitment to enterprise customers, on June 11th Samsung opened a new Executive Briefing Center (EBC) in its Ridgefield Park, NJ office. The EBC offers enterprise customers and Samsung’s many partners an opportunity to experience Samsung’s vertically-optimized enterprise offerings in context.

I attended the opening, which enjoyed executive-level support from the President and CEO of Samsung Electronics North America Yangkyu (Y.K) Kim, President of Samsung Electronics America Tim Baxter, and Senior Vice President, Samsung Enterprise Business Tod Pike. I also spent an hour learning more about the Samsung value proposition for enterprise customers from Tod, including the excerpted Q&A below.

Samsung’s Enterprise Business Division focuses on a vertical strategy that includes Education, Healthcare, Retail, Financial Services, and Hospitality... and which isn’t just about devices, though their product offerings in hospitality TVs, notebook and tablet PCs, virtualization, wireless printers, and digital signage play a prominent role. Samsung also brings together enterprise-savvy partners like Crestron and Nuance Communications – along with numerous systems integrators and other channel partners – to deliver software, content, and services along with those devices.

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Fragmentation Is A Way Of Life, But Few New Platforms Will Emerge

In recent weeks, I’ve been asked the same question several times: Will the devices market continue on a highly fragmented path, or will the market shake out to yield a couple of viable form factors and platforms? This query actually encompasses two distinct questions, with two answers:

1. Devices and form factors will continue to fragment, though failures will abound.
Let me unpack this a bit, starting with some background: In 2007, I published a report called The Age of Style in which I predicted that computing form factors would diversify and fragment:

By 2012, the industry won't include just two form factors, laptops and desktops, but five or more form factors that are universally viewed as differentiated products.

The advent of new mass market computing experiences — from smartphones to eReaders to several flavors of tablets to phablets (and beyond) — rendered this prediction accurate. We live in a world of form factor diversity, which is only increasing with the introduction of wearables, the accelerating fragmentation of the tablet category, and the innovations associated with television-sized, collaborative touchscreen devices.

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