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They say you don't move forward by standing still. In a frenzied grasp for relevance in the mobile age, Microsoft spent 2013 shaking things up at a cellular level.
A whole lotta shaking
Beyond major new releases for the Xbox, Windows, and Office brands this year, Microsoft spent billions to gobble up Nokia, revamped itself from head to toe as a device and services company, and said a bittersweet sayonara to its longtime chieftain—and those are just the major headlines.
With so much shakin' going on, it's hard to call any individual element a "hit" or a "miss," especially since several of Microsoft's moves contain elements of both. But hey, it's time to reflect, so let's give it a shot!
Hit: Office 365 Home Premium
Let's start on a high note. Microsoft released Office 365 Home Premium, its ambitious "Office as a service" offering, way back in January, then extended its reach to Android and Apple phones later in the year.
While the mere existence of Office 365 Home Premium rekindled the old "software vs. services" furor, there's no debating that uptake has been brisk: In late October, Microsoft announced that more than 2 million users were paying $10 per month (or $100 per year) for 20GB of SkyDrive cloud storage, instantaneous updates, and—most important—the right to use Office 2013 on up to five devices. Not too shabby.
Say what you want about Windows RT, and how it's holding back Microsoft's otherwise attractive Surface tablets. (I have!) Rant, if you will, about how the Surface's relatively high pricing dulls its luster in the eyes of consumers. (You might want to point out how the original Surface RT's usage skyrocketed when its price was dropped to $350.)
Spill all the words you want. I'll just point to Microsoft's whopping $900 million accounting writedown on its Surface RT tablets—nearly one billion dollars—and say the numbers speak for themselves. But look on the bright side! Overall Surface usage is slowly but surely rising.
Reply hazy, try again: Nokia
It's too early to call one of Microsoft's biggest moves in 2013 a hit or a miss: Nokia.
Microsoft spent a piggybank-pummeling $7.17 billion to acquire the company's phone and tablet business in September, with the deal expected to close early next year. Theoretically, the deal could give Microsoft's fledgling devices division a big boost in expertise and established sales channels, and give the company a more Apple-esque grip over the Windows Phone ecosystem. Nokia sells a whopping 90-plus percent of all Windows Phones.
Then again, Windows Phone sales are slack, and Nokia was said to be faltering before Microsoft's deus ex machina. Only time will tell whether the union succeeds or fails.
Hit: Windows 8.1
As a (free!) follow-up to Windows 8, Windows 8.1 is simply superb. Chock-full of killer additions, new apps, numerous surprises, and yes, a more desktop-friendly mentality, Windows 8.1 is in many ways the operating system that Windows 8 wanted to be.
But here's the thing: At its core, Windows 8.1 is still Windows 8, just a far more refined version of it, and the Live-Tile ideal hasn't proved as compelling as Microsoft would have hoped. PC sales are still cratering, and Windows tablets have barely made a dent.
Even so, we're going to give Windows 8.1 a thumbs-up.
Miss: SkyDrive, or whatever it's called
Remember how Microsoft had to stop using the word "Metro" to describe Windows 8's interface after a trademark dispute? The saga continues.
Earlier this year, Microsoft had to walk away from the SkyDrive name after losing a trademark case against British broadcaster British Sky Broadcasting. The cloud-based glue unifying so many of Microsoft's services has to be renamed, and Microsoft had to pay BSkyB an undisclosed sum.
It won't make a big difference in your day-to-day usage of the service, but it's highly embarrassing for Microsoft, which just flushed all those dollars on building the SkyDrive brand.
Reply hazy, try again: The Windows Store
As it stands today, the Windows Store is mostly a miss. It lags behind Google Play and the App Store in virtually every way, and while Microsoft's digital market surpassed the 100,000-app mark halfway through the year, there are still some glaring omissions.
Nevertheless, some important cornerstones were laid this year. The Windows Store got a killer revamp in Windows 8.1. Overall app growth has remained steady, just slooooooow. More important, most of the major categories have at least basic coverage, and 2013 saw some big-name additions, including Facebook, Twitter, Dropbox, the NFL, and more.
Hit: Xbox One
This hit also reeks slightly of a miss. Just as Windows 8 boldly reimagined the PC, the original vision for the Xbox One was an overhaul of everything a console stands for. Digital sharing! Always-on connections! An all-seeing, always-on Kinect! Microsoft's ambitions proved a bit too bold, however, and after some backlash, Microsoft rolled back its most audacious plans.
That didn't cripple the console. The Xbox One still smartly integrates streaming video, live TV, and game-playing into a smooth overall experience that, even at $500, is an outstanding value. (It even plays nice with Windows PCs!)
Microsoft's been blasting Google with both barrels this year, courtesy of an embarrassing "Scroogled" campaign that's delivered dubious low blow after dubious low blow at Google Shopping, Gmail, and Google Search itself.
Classy. Some may snicker, but I can't help but sigh. As amusing as seeing the Pawn Stars bash Chromebooks is, we expect better out of you, Microsoft. (And if you're going to mock Google, how can you ignore the YouTube comment fiasco?)
Reply hazy, try again: 'One Microsoft'
Microsoft's grand restructuring is the haziest, most monumental change of all. Longtime CEO Steve Ballmer announced his retirement—disruptive in itself—but he's shaking things up hard before he goes.
Ballmer blew up Microsoft's product-focused team structure in favor of a more function-based structure (operating systems, devices, and so on), to get everybody working together under a "One Microsoft, all the time" mantra. Then Ballmer declared that Microsoft is now a device and services shop rather than a software company. Heck, he even did away with the long-used "stack-ranking" employee evaluation system.