In early April 2017, Microsoft revealed that it was partnering with Samsung to produce the Galaxy S8 Microsoft Edition smartphone. The latest iteration of Samsung’s flagship mobile device will run Android just like any other Galaxy S8, but this special edition will feature Android versions of such Microsoft staples as Office 365, OneDrive, and Cortana. In an interesting twist, this particular smartphone will be available only at brick-and-mortar Microsoft Stores.
Of course, much of the IT press is having a bit of fun at Microsoft’s expense with quips about the demise of Windows Phone and Microsoft’s failure to capture market share, etc. But I think those articles are missing the point entirely. Microsoft gave up on being the dominant manufacturer of smartphones years ago. The current strategy is slightly more subtle and significantly more elegant.
It is all about the cloud
Under former CEO Steve Ballmer, Microsoft spent extraordinary resources trying to compete in what was then a burgeoning and highly competitive smartphone market. In many ways, this strategy became a personal crusade against Steve Jobs and the Apple iPhone. However, Microsoft was late to the market and the strategy failed miserably, eventually forcing the company to make a change in leadership and divest from a poorly devised partnership with Nokia.
When current Microsoft CEO Satya Nadella stepped in he changed the strategic philosophy immediately. He realized the true battle was not over the hardware devices but over the software that ran on those devices—specifically, the cloud-based, subscription-based services mobile devices depend on. This is where Nadella’s mantra of mobile-first, cloud-first was manifested.
Microsoft does not care that the new Samsung Galaxy S8 Microsoft Edition runs the Android operating system as long as it also runs subscription-based Microsoft apps and cloud services. When it comes to enterprise businesses, Microsoft is not in the smartphone market. It’s in the software-as-a-service market.
Don’t get me wrong. If Microsoft could convince every person in the world to switch their preferred mobile device operating system from Android and iOS to Windows 10, it would. But that is not realistic, and frankly, it would be a terrible business strategy. Think about it: For roughly a year, Microsoft was giving Windows 10 away for free and still couldn’t convince some customers to make the migration.
However, a strategy to make Windows 10 as appealing as possible and a viable alternative to other operating systems, regardless of device? That is plausible and achievable. Couple that with a strategic plan to provide productivity software and cloud services not only to users of Windows 10, but to any other operating system running on just about any hardware, and suddenly you are talking about a winning comprehensive business strategy.
If you find it amusing that Microsoft is selling a special edition Samsung Galaxy S8 because it runs Android and not Windows 10, you are not seeing the big picture. Microsoft’s enterprise business model is to sell subscriptions to productivity and cloud services. The platform used to reach those services is not relevant—it is all about the cloud.
What productivity apps do you run on your smartphone? Does the mobile operating system matter anymore? Share your thoughts and opinions with your peers at TechRepublic in the discussion thread below.