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2015 to test Microsoft's resolve and execution

Gregg Keizer | Dec. 19, 2014
It's put-up or shut-up time for Windows, devices and mobile, say analysts.

Microsoft's ability to keep consumers in its fold will be iffier, Dawson said, agreeing with Miller that mobile will be a crucial challenge for the Redmond, Wash. company in 2015. "The reality is that consumers are not choosing Microsoft for mobile. They're not choosing what Microsoft is making or its OEMs are making," Dawson said. And that has had, and will continue to have, a knock-on effect for consumers and Windows PCs, as it makes moot going all-in on Microsoft.

"Why would I choose an all-Microsoft portfolio?" Dawson asked rhetorically.

But Dawson returned to Windows 10 as a touchstone for 2015, calling it and Microsoft's pricing and upgrade decisions "symbolic of all the challenges facing Microsoft."

Microsoft is the one major operating system maker that continues to charge for its OS. While it has discarded fees for all smartphones, many tablets and some notebooks, there's no intention to expand that across the board, the firm's chief operating officer said earlier this month.

Perhaps. But Dawson said Microsoft faces a decision this year. "Can they maintain Windows as a source of profit and revenue?" Dawson wondered. He didn't think so, not for consumers, and expected Microsoft to take additional steps in 2015 to lower or eliminate the price of the OS to OEMs and users alike.

Patrick Moorhead, principal analyst with Moor Insights & Strategy, went a different direction than Miller or Dawson when asked to tap Microsoft's biggest challenge in 2015.

Enterprise, enterprise, enterprise
Rather than worry about consumers, Microsoft should instead focus on the enterprise, where it's more or less guaranteed revenue, said Moorhead. "What's their play in the public-private cloud?" asked Moorhead. "They've made good strides to move Microsoft code from on-premises to the public cloud, but they haven't made much progress on Open Stack."

Open Stack is an open-source cloud computing platform that many enterprises have adopted to create private cloud services or run hybrid implementations blending both public and private. Microsoft's answer to Open Stack is its Azure platform.

Next year will be important, the analysts agreed. How important, though, remains unclear. This won't be the first time outsiders have called the coming months critical for the company: In 2011 and 2012, much of the same commentary focused on Windows 8. And even though that OS failed to meet Microsoft's expectations, the firm survived, even thrived.

"These companies are far more resilient than most people give them credit for," said Dawson. "In a devices-based business, it's possible to have a rapid implosion of a company, as happened to Nokia, Motorola, and now maybe Samsung. But this is not the devices business."

Still, Microsoft will be on the spot in 2015. "This year, [Satya] Nadella laid out in words Microsoft's strategy," Dawson said. "But those words were very general words. What do they actually mean? Next year must be much more about execution from Nadella."

 

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