Special Feature
Part of a ZDNet Special Feature: 2017: The Year's Best Tech for Work and Play

It really is a new Microsoft

Microsoft's new CEO, Satya Nadella, faced plenty of skepticism when he took the job earlier this year. But even skeptics have to admit that things have changed in Redmond. Here are four things the old Microsoft would never have done.

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Meet the new Microsoft.

Satya Nadella took over the reins in Redmond earlier this year , with more than a little skepticism about his ability to turn the slow-moving behemoth that is Microsoft.

But things have changed under Nadella's leadership. Here's an update on just what makes the new Microsoft different from its predecessor.

They can keep a secret.

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This week, Microsoft delivered a surprise update to Office for iOS .

It wasn’t the first surprise this year from a company that has gotten very good at keeping secrets. Consider these examples:

  • In May, the company launched the Surface Pro 3 in New York. The rumor mill had expected a small tablet, but that project was shelved just a few days before the event.
  • The big reveal for the next-generation of Windows included a new name, Windows 10 . No one saw that coming.
  • Some rumors had hinted of a Microsoft wearable device, but no one predicted the Microsoft Band .
  • The new Outlook for Mac and major Office updates for Office on iOS and Android both arrived this week without advance warning.

The old Microsoft was never able to play this game well. But the Nadella-era Microsoft has become quite adept at playing its cards very close to the vest.

They play well with others.

Through the years, one of the great strengths of Microsoft as a company has been its ability to attract developers to its own platform. Lately, it’s been playing that game in reverse, adapting its own software and services to other platforms at an accelerated pace.

Last year at this time, Office for iOS was still just a rumor, and there was still considerable debate over whether an Android version of Office was even a possibility.

That all changed with the launch of Office for the iPad in March. In the intervening months we’ve seen a flurry of updates, culminating in this week’s release of refreshed Office apps (Word, PowerPoint, and Excel) aimed at the larger iPhones.

But the much bigger news was Microsoft’s plan to give Android users an Office alternative to Google Docs . Given the bitter rivalry between Microsoft and Google, this Twitter exchange between Satya Nadella and Google's new top dog Sundar Pichai had to blow a few minds:

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The bottom line: Microsoft is aggressively developing its desktop and mobile apps and services with a realpolitik approach that acknowledges the power of the platforms it doesn’t own or control.

They’re not afraid to play hardball with pricing.

Back in the 1990s, when Microsoft was at the height of its monopoly power, it changed the competitive landscape with a single dramatic move, making its Internet Explorer browser free across platforms.

That same spirit is in evidence with some of Microsoft’s recent pricing moves.

  • The first release of Office for iOS required an Office 365 subscription to unlock even basic features. Beginning this week, core editing features are free, and refunds are available to anyone who paid for an Office subscription just to get access to the iOS apps.
  • The amount of OneDrive cloud storage available for free has been steadily creeping up. It’s now at 15 GB, and Office 365 subscribers who pay as little as $70 a year get unlimited OneDrive storage as part of the deal.
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  • To play in the consumer space, Microsoft is giving away what used to be its core product, Windows. Hardware partners who used to pay $20 and up for every copy of Windows can now get it free for use on phones and tablets that are 9 inches or smaller.

Windows is still a cash cow, but it’s no longer a sacred cow.

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A decade ago, Windows was the source of virtually all of Microsoft’s operating income . Today Windows is still a major contributor to Microsoft’s revenue, but it’s no longer the biggest number on the balance sheet.

In the credit-where-due department, ex-CEO Steve Ballmer was in charge for most of that transformation. The biggest move this year has been psychological.

Pre-Nadella, "first and best on Windows" was the guiding principle for Microsoft apps and services, including Office and Skype. If that mindset were still in place, Microsoft might have delayed this week's Office for iOS launch until corresponding versions for Windows were ready.

That didn’t happen. In fact, as of this week, if you want the best experience of Office on a mobile device, you should put down that Windows tablet and pick up an iPad.

That would have never happened with the old Microsoft.

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