The way I see it, Microsoft are struggling hard to remain relevant these days and the next five years or so will decide whether they’ll still be in a power position ten years from now.
No longer fancy-cool
If anecdotal evidence counts, Apple has won the consumer computing war of the 2010s. The younger people (under 20 year olds) around me are buying Macs, not Windows machines, and sadly not GNU/Linux. This is a generation of people who only has to touch Windows at work, if at all. Windows gets the stigma of the boring work thing, not the exciting spare time thing.
Struggle for brainshare
Seeing this, Microsoft open-sourced .NET Core, perhaps in an effort to compete with currently more fashionable stuff such as what’s described above. They invested in Node.js so that it runs well and integrates with Windows, because having Node only on UNIXoid platforms like GNU/Linux and Mac OS X would have hurt their brainshare in the long run.
They probably also wanted Xamarin so they would have something that runs on Android. You can’t ignore the world’s most popular mobile OS. And Microsoft is not going to tolerate Java, after fighting it so hard for decades, so Android’s native language is out of the question.
One might have the impression that a Facebook- and Instragram-addicted younger generation does not care about privacy, but they do. Microsoft is more and more invading this privacy, specifically with Windows 10. Anecdote again: If a young person upgrades to Windows 10, they now get laughed at. “lol, didn’t you know how to prevent that? now you’re screwed, lolol!” That’s probably not the feeling Microsoft wants to have associated with Windows 10.
Tax-saving moves and advertising
MS bought LinkedIn mostly to save 9 billion US Dollars in taxes, not to bolster their user profile portfolio. At least that’s what was reported. They exited the display advertisement business last year. I’m not sure what this new user profile information is worth to them.
On the flip side, I’ve never seen as much advertising by Microsoft as in the last few years. Every airport and train station has the largest possible size billboard advertising Azure. Even services that never normally display a sponsor ad for me, such as Pocket, are starting to display Microsoft ads. Microsoft is buying ad space for its services like a maniac.
So the strategy, it was never a secret, is to aggressively get people on Azure, to get people to use Microsoft services (not necessarily software) such as Office 365, to lock people in that way.
Microsoft is aping Google and copying Amazon in the cloud space, while Apple plays defender of humanity’s privacy and has no services strategy at all.
But who is going to move to Microsoft’s browser-based services (which arguably work slower and less reliably than Google’s) when Google offers the same and more “for free”, when both companies take your soul and your privacy as payment? Probably Windows users. If you already use Windows, you get better integration, and you can bet that Edge gets the most optimized version of Microsoft’s web offerings.
Now what if there are 20% fewer Windows users next year, and 30% less the year after, and suddenly 200% more Chromebook and Chrome OS users in 2018, and Apple delivers on their promise of keeping your private things private, and the market loves them for it? This could be the beginning.
It will be extremely interesting to see if we’ll witness the end of Microsoft as the all-deciding giant it used to be, whether their move to services can save them, and whether Apple can come up with something more tangible than high hardware margins to keep the revenue coming in.