skip to Main Content

Microsoft and the Application Platform

A lot has been written in the industry press on Microsoft’s new ‘Devices and Services’ strategy and – what would have been inconceivable until only very recently – the tacit acknowledgement that the traditional software sales model is now effectively dead.

We are seeing this strategy rapidly being implemented with the release of Microsoft’s own Surface tablet last year and this week’s announcement of the purchase of Nokia’s smart phone business. Other interesting snippets in the trade news in recent months are also painting a picture such as, the approach to sell Bing to Facebook in 2011 or ’12, and apparently the attempts to offload MSN.

Maybe a decision was made high up at Microsoft at some stage, “we know we have to change from what we are, so let’s be more like Apple than Google and not try to be both”. I guess that was after the attempted Yahoo! buyout was ditched, which would have cemented the ‘Google challenge’ position.

We are also reading of the massive fall of the Windows installed base on computing devices, swamped by Google Android and Apple OS because of the rapid increase in the percentage of the total coming from mobile now.

But this is almost all consumer device focused. Which does not mean it isn’t huge news – it is – given Microsoft’s original Purpose was ‘a PC on every desk and in every home’, the consumer market will surely remain a part the company’s core being.

However, what we don’t see much noise about at the moment is Microsoft’s rock solid position in the Enterprise Software market. And in fact, since I first wrote this in September, we are now seeing this coming out – Where Microsoft Money Comes From – that article from mid-October covers this really well.

The Enterprise sector simply does not move at the same pace as the consumer sector. In fact many of our clients are still on software platforms/systems that are now over 10 years old, and working just fine thank you. The real rock of Microsoft is these Enterprise systems, not just Office but the actual underlying systems that business runs on, such as Windows, Exchange Server, SQL Server, and SharePoint Server, and the myriad of custom-developed software running on the Microsoft platform and embedded in the Enterprise over years and years.

This suite of systems and servers, including custom .NET software development, CRM and ERP, and BizTalk integration, has been called variously over the years the ‘Enterprise Platform’, the ‘Application Platform’, and others I am sure. Currently ‘Application Platform’ seems to have fallen out of favour and out of use on the Microsoft site, but we are sticking with it on the basis that it will probably come around again!

The key strategy for the Enterprise is now of course the ‘move to the Cloud’. Where your systems’ run is no longer the central question and ‘computing as a utility’ as postulated 30 years ago is now finally coming to be. With this, the functionality of the Enterprise Software (or Application Platform, whatever…) remains central and key.

What’s my point? Microsoft’s enterprise software remains the market-leader for functionality and value, especially with Enterprise licensing. Database – SQL Server over Oracle or MySQL? Every day. Enterprise Collaboration platform? SharePoint is #1 in the Enterprise sector. Windows and SQL Server underpins so many of the world’s business systems, there is simply no way this will change fast. Those companies, particularly in Banking, that have tried to upgrade, even from Excel 2003 to new versions just for example, will tell you just how embedded these systems are – a veritable maze of interlinked Microsoft software that runs the business, a veritable neural network of embedded Microsoft it seems!

The important difference going forward is quite simply that these systems will more and more be located in the Cloud (whether Public, or Private) and not on premise.

So, as long as Microsoft can get the Enterprise-owned smart phone and tablet markets tied in very fast now so that their software will work ubiquitously, then the core business of Enterprise systems will remain secure for Microsoft (and personally, I don’t believe BYOD is a strategy that will last, Enterprises are traditionally very solid on Security, and with the Cloud transition, that will become even more important, so allowing anyone to connect to the secure network with whatever they want is just not going to last).

While all the evidence says it’s not going to happen, it surprises me that Microsoft have not bought Blackberry, it would make perfect sense as while it’s true that Blackberry’s market share has collapsed overall, it remains a major player in the enterprise mobile sector and the Blackberry Enterprise Server is another embedded system that will be hard to shift from any large organisation and can be bolted on to the Microsoft offering, just as they have done with Skype – it’s separate still, but that will not stay that way forever.

The Nokia buyout, releasing their own Slate tablet, and the overall move into Devices, is actually looking extremely prescient from all angles.

It’s not about being Apple, it’s about remaining Microsoft.

By Andrew Chalmers, Managing Director

About the Author

Co-Founder and Managing Director, Andrew has over 30 years’ experience in business management. With consultant project manager, interim manager and Managing Director roles particularly in the engineering and manufacturing sector and over much of the world, Andrew brings the business-side experience to complement Geoff’s technical leadership. In 1998 Andrew created one of the very first cloud software development consultancies in the UK, which developed a very early-adoption corporate intranet for Hewlett Packard Europe amongst many other ground-breaking projects.


Back To Top
Contact us for a chat