Microsoft's devices boss hints at wearables and Windows consolidation

Credit: Microsoft

How does Microsoft catch up in phones and tablets? According to devices and services chief Julie Larson-Green, it's a combination of appealing to consumers while adding enterprise features and the next big hardware innovation: natural user interfaces, especially for new devices like wearables. And maybe rationalizing the Windows business, which she ran until this summer's reorg gave her a more expansive role.

Speaking at the UBS Global Technology Summit today, Larson-Green explained that user interaction with technology goes through various inflection points. In the early days of personal computing, the mouse and the user interface was a major inflection point, and software companies like WordPerfect who didn't embrace it fell by the wayside.

Next came touch, which is where Apple leapt ahead of the competition, including Microsoft. "We had smartphones but, like BlackBerry, they were based on the keypad and the stylus and trying to use the concepts of Windows in a smaller device."

Microsoft was on the right side of the first inflection point and on the wrong side of the second -- at least until Windows Phone and Windows 8 -- but it's ready for what Larson-Green believes is next.

"There is an inflection point coming that is something else beyond phones and tablets. There will be another inflection point and it will come from the hardware input model; so that's why you've seen us do things with Kinect with gesture, why you see us doing things with voice. Just as the mouse was an innovation, touch was an innovation there will be the next new way to interact and that's why we're in devices."

She thinks Windows and PCs and even desktops PCs will be around as long as she will, but we'll also have a new category of devices like wearables that fit into a future of ubiquitous computing.

"For my lifetime, there will desktop computers where people are doing precision movements with the mouse, which are highly tuned for productivity and typing -- as well as maybe something on your wrist or on your head or something in your pocket where you will want to interact. You'll want to see your emails, get notifications, get access to the information you need to do your job as well as interact with friends and family."

Microsoft's strategy matches that ubiquitous computing idea. "Devices that are going to be in your home or on your body, services where you can get access to all the information and data you care about. The people, the documents, the entertainment, all the things in your life from whatever device is most convenient for you at the time."

Surface Watch at last?

That device could be using your phone for multi-factor authentication and single sign-on through Azure Active Directory, or it could be you walking up to your Xbox and having it show you your calendar. "If you want it to," she added quickly. "It's about permeating technology through your life and making it available to you. We're really focused on having  devices integrated in your life, in whatever way you want it integrated."

What will those devices look like? She didn't say, but she did promise "next year you'll start to see lots of exciting things." That could mean the rumored Microsoft smartwatch, or the (also-rumoured) Google Glass-style Xbox glasses. But whatever they are, they'll combine the sensors we have in wearables today with a new way of controlling devices, and a new kind of app to use with them.

The revolution in apps with the iPhone came from being able to run them on a touch device and buy them from an app store, says Larson-Green. She thinks the next step is the magic that happens when you bring together sensors that you wear or walk past, combining information from apps that can connect to each other and natural interfaces. Think of it as an extension of what you can do with a Fitbit or a Nike FuelBand, combined with smart information about you and your location -- and these new ways of interacting. After all, you might tap on a screen on your wrist, but if something is round your neck or on your head, you're probably going to want to talk to it and maybe make gestures at it.

"From telling you didn’t quite do your pushup as far down as you could go, or your heart rate is too high, you're stressed out, take a  deep breath or letting you know when your bus is running late -- there are lot of things we can do bringing those together in a new way of thinking about how people interact tech. Just as the mouse was an innovation and touch was an innovation, there will be a next new way to interact."

One Microsoft in action

Everything has to come together to make all this work. When Microsoft came up with the Tablet PC a decade ago, the technology meant "the idea of carrying a device around with you and taking notes was stuck in the body of a five pound luggable. Now it's a sleek, thin piece of hardware."

One of the reasons for the one Microsoft reorg was that Microsoft had so many of the pieces for these new trends in computing, but it wasn't putting them together. "We have all the elements," Larson-Green pointed out. "We have an OS that scales from mobile devices to giant screens in your living room, up to a server, and we have the power that gives developers and IT professionals to manage those devices and to give information out to people in your business, no matter where they are. We have a great platform for building on top of those devices."

She puts that down to business groups "with the best of intentions but their own concerns" and the way Microsoft was structured. "We had different ship cycles, we had different P&L goals. We were busy with our own things."

Both the structure and the way the teams work has changed now. "We are working together on plans, we have a shared vision, we have a shared roadmap -- and we have individual teams working on cross team scenarios. We meet weekly as the leadership team to checkpoint where we're at and where we want to go and what challenges we have."

From the devices side, part of that means talking to the commercial groups run by Satyen Nadella and Qi Lu about how to add more enterprise features. "Are there hardware things we can do that would make adoption easier in enterprise? How do we lower the barriers to BYOD in the enterprise?"

This future is bad news for anyone thinking Microsoft is looking for a CEO who would consider selling off Xbox or Bing. One of the many reasons Xbox is important to Microsoft is being able to do Skype on the big screen on your whole company and, she noted, "you can do video conferencing on Xbox One, so maybe we'll see them showing up in board rooms".

You can also forget about the company only concentrating only on the enterprise market.

"I tell my team, people that have devices, in order to buy them they probably have a job," Larson-Green explained. "So we need to think about the full breadth of their work day. Their work day doesn't stop when they go home and their home life doesn't stop when they go to work, so how can we bridge those -- and still respect the needs of the corporation to keep tabs on the data and information they're letting their employees walk out the door with?"

That's not Microsoft being a company with enterprise teams and consumer teams; that's Microsoft being a company that is trying to learn how to combine enterprise and consumer -- because that's the world we live in today.

What happens to the Windows business?

If you listen to Microsoft leaders talk, it's clear that Windows is still a key part of the company, but it's no longer the crown jewel -- at least not on its own. Gravity has shifted inside Microsoft, first from Windows and Office to Azure and cloud services, and now to the idea of services and devices (even if devices are a nascent business so far).

Where does that leave Windows, now that being a platform isn't enough for it to succeed?

At Microsoft's shareholders' meeting earlier this week, Steve Ballmer talked about the changes in the software business and the fact that boxed software will be dead in a decade. And as to selling licenses for Windows in all its forms? "Remember we have a competitor in the operating systems business in Android that's entirely free," he pointed out. Maybe Microsoft can still sell OEMs software or maybe it has to concentrate on "how do you really drive and monetize the value [of the OS]".  That doesn't mean Microsoft is planning to give Windows away any time soon, but Ballmer was clear about something changing: "I do think there's a transformation in our future."

Julie Larson-Green also hinted at changes for Windows today, while making it clear that Microsoft isn't backing away from Windows RT -- or at least the concept of an ARM-based Windows. "We do think there is a world where there is a more mobile operating system, that doesn't have the risks to battery life or the risk to security [that Windows does] but it also comes with a cost of flexibility."

But this might be the clearest suggestion so far that Microsoft is planning to combine its phone and tablet OSes more closely. "We have the phone OS, we have Windows RT, and we have full Windows," Larson-Green said. "We are not going to have three."

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