Three big questions the new Microsoft needs to answer

Microsoft CEO Satya Nadella is talking a big game and working hard to change Microsoft's image. Here are the three big question marks hanging over the company's current comeback.
Written by Jason Hiner, Editor in Chief
Satya Nadella at Build 2015
Microsoft CEO Satya Nadella delivers the opening keynote at Build 2015 in San Francisco.
Image: Nate Ralph/CNET

Riding the momentum of its Build 2015 developer conference in San Francisco last week and heading into its Ignite event for tech leaders in Chicago this week, Microsoft has seized the opportunity to cast itself in a different light.

The new Microsoft is less bulldog and more greyhound--if you believe the narrative. And we've seen Microsoft CEO Satya Nadella profiled in a rosy New York Times article that states he has "more willingness to favor big bets on new technologies over protecting legacy cash cows."

Be careful digesting that.

Nadella was put in the position he's in by a group of capitalists--Microsoft's board of director--whose primary motivation is to produce a better return for the company's shareholders. That comes by turning a profit and convincing those shareholders that you're going to turn an even bigger profit in the future.

Milking cash cows is a perfectly acceptable strategy in that world.

That's why Steve Ballmer survived as Microsoft CEO for an almost-innovationless decade-and-a-half. No tech leader ever milked a cash cow better than Ballmer milked Windows and Office.

But, all that focus on milking profits led Microsoft to misfire on the mobile revolution and left the company with an uncertain future. That's why Nadella is trying to paint this new picture of Microsoft as a company making big bets on new technologies. He has to convince the public to believe in the future of Microsoft again.

While Nadella is saying a lot of the right things, it's still not clear how the new Microsoft is going to overcome the obstacles that have held it back for the past decade--especially since many of its most talented product leaders have long since left the company.

That opens up lots of questions, but here are the three most important ones.

1. What can Microsoft do better than any other company to improve the lives of its customers?

In the 1980s and 1990s, Microsoft made its name and built its business by making personal computing cheap enough and easy enough for businesses and consumers to join the revolution. It also did a better job than anyone else of creating standard platforms. Windows was a standard platform for developers to build their apps. Microsoft Office was a standard platform for users to create their documents.

As much as some will argue about the quality of Microsoft's software and the ruthlessness of its business practices during that era, creating those standards was important for pushing forward the PC age and the internet age. And it turned Microsoft into a software juggernaut.

What is Microsoft doing today that will push society forward and make technology better? What are the core products that it will hang its hat on for the next 5-10 years? Windows and Office will continue to drive revenue, but there's little innovation still needed there. What are the new markets where Microsoft can add something unique and help shape the course of technology?

2. What's the real goal of the new cross-platform religion?

Microsoft repeatedly talks about other platforms now. This is the area where Nadella has made his biggest impact since taking the reigns as CEO. Azure has become very Linux friendly. Microsoft Office has been released for iOS and Android. At Build 2015, the company talked about making it easy for iOS and Android developers to port their apps to Windows 10. And the Microsoft Band is one of the few wearable devices to work equally well across iPhone, Android, and Windows Phone.

All of this makes Microsoft look like a much friendlier company. Salesforce CEO Marc Benioff even told The New York Times, "With Satya, they have a much more open mind about working with people."

But, there are different motivations in each of the cases mentioned above. Where is Microsoft going with this and how committed is it to being a cross-platform company? It's not in their DNA. The cynic will say that Microsoft is doing this because it's an underdog at the moment. If it gains traction in new markets, will it repent from its cross-platform commitment? Keep an eye on that.

3. How will it keep HoloLens from becoming the next Courier?

The technology world is coming around to the idea that virtual reality and augmented reality aren't about gaming or heads-up displays. They're about the future of human-computer interfaces. And one of the big reasons that our perceptions and expectations are changing is because of Microsoft HoloLens. It is the best demonstration yet of the potential of augmented reality and the possibilities of 3D user interfaces.

However, Microsoft knows how pull off flashy demos. Tablet PC looked incredibly usable as a demo. Windows Vista looked flashy and fun and groundbreaking as a demo. And, the queen of all tech demos was the Courier tablet, which famously never made it to market.

As great as HoloLens looks in demos, it's clear that it has a lot of gaps to fill before it becomes a commercial product. With HoloLens, has Microsoft shown us an unattainable and impractical vision that will never become a real product? If it does come to market, will it only interact with a Windows computers or will it play nice across the Apple and Google ecosystems? Could it, in fact, create a new standard for the user interface of the future and could Microsoft build a business around it?

One thing is clear: it's the most interesting thing Microsoft has going for it. And understanding Microsoft's vision and roadmap for HoloLens will be the most fascinating thing to watch at Microsoft in the years ahead.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

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