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2015 is make or break for Microsoft

Preston Gralla | Jan. 6, 2015
This year we are finally going to get an answer to one of the big questions in the technology world. For years, people have been debating whether Microsoft will retain its position as one of the world's dominant tech companies or steadily become less relevant.

This year we are finally going to get an answer to one of the big questions in the technology world. For years, people have been debating whether Microsoft will retain its position as one of the world's dominant tech companies or steadily become less relevant.

Please note that no one is talking about the death of Microsoft. No matter what happens, it's going to remain a big company that reliably brings in big revenue. What's up in the air is its ability to sustain growth and define the future of computing.

But 2015 should tell us what kind of company Microsoft is going to be for the rest of this decade and beyond.

Microsoft's future is tied to Windows, Office, the cloud and mobile. Unfortunately for the company, it could do very well in three of those areas and still wind up a much less influential force if it fails in a big way in the fourth area. And that could well be how it plays out.

This year, Microsoft is due to release major upgrades to Windows and Office. By all accounts, Windows 8 has been an unmitigated disaster for Microsoft. It was designed for tablets and mobile devices, not traditional PCs, but it nonetheless was the only operating system available for desktop machines. The company seemed to have been hoping that people would get used to the touch-friendly interface on their desktops and laptops and would then be eager to switch to Windows Phone. That didn't happen. Instead, consumers were so confused by Windows 8 that they stayed away from it in droves.

This year (the expected release date is late 2015) Microsoft will seek to make up for that huge misstep by releasing Windows 10. (For some reason the company seems to be mathematically challenged and is skipping Windows 9.) The reception of Windows 10 will determine whether Windows can remain a big profit driver.

Jan Dawson, an analyst at Jackdaw Research, wrote on his Tech.pinions site (fee or registration required), "The single greatest test [in 2015] may be whether Microsoft can successfully charge large amounts of money for a new operating system to consumers and still see significant uptake."

Microsoft will also release a new version of Office in 2015. The measure of its success won't be the number of people who buy Office the traditional way, but instead how many jump for an annual subscription. Office continues to be a runaway success, and if Microsoft can move people from a pay-for-it-once to a subscription model, it will lock in a sizable, steady stream of revenue.

If Windows 10 and the new Office do well, Microsoft will do well. But desktop operating systems and productivity suites no longer have the sizzle that can make Microsoft a really relevant and influential company. For that reason, mobile and the cloud are much more important for it.

 

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