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Redmond's Remarkable Reversal

Unless deeply isolated in a programming niche, every one of us has come to appreciate how fast technology around us is changing. Not only changing in an absolute sense, but changing the way programming is done. With few exceptions, the imperative for fast, responsive development has swept up both the client side and the server, forcing enterprises to entirely reconsider how they use software and how the develop it.

In such an environment, how have large IT vendors fared? If we look at the top names in desktop and enterprise technology, we find a very mixed slate: HP, IBM, and Dell are struggling — all of them involved in multi-year turnaround efforts. Oracle had flat revenue for 2013 as it tries to establish legitimacy in the cloud and on mobile devices. Whereas Microsoft  has thrived. Revenue for 2013 was up 5%. This gain was notched despite a poorly accepted Windows 8 release that was, according to pundits, going to make or break the company. Microsoft was frequently identified as one of the companies most at risk as we enter into the post-PC era, and yet it has grown. What gives?

Many factors have contributed to Redmond's surprising success, but two in particular stand out: Microsoft embraced the cloud early and vocally, and it began delivering new software releases much more quickly.

The importance of its cloud platform, Microsoft Azure, to the company's future can be seen in the promotion of the former chief of the cloud initiative, Satya Nadella, to the position of CEO earlier this year. From this, we can certainly infer that Microsoft will continue to push its cloud: Azure for business apps, and Office 365 (Microsoft's Office in the cloud offering) for personal productivity. While Amazon might have a huge lead in IaaS, I'm hard-pressed to see a more ready competitor than Microsoft. HP, IBM, Google, and Oracle all have cloud offerings, but only IBM's (and to a lesser extent, Google's) has gotten any real traction among enterprises so far.    

I should note Microsoft's efforts in the cloud is an extension to its core business — a new initiative that will surely come to dominate other lines of business; it is not yet a change in the company's fundamental way of doing things. However, the corporate DNA has indeed been changed — product delivery has been greatly accelerated. This can most readily be seen in the developer tools division.

In the last month, Microsoft unveiled the first preview of Visual Studio 14. It comes only months after the launch of Visual Studio 2013, which was a huge release, crammed with new features. And that came barely a year after VS 2012. Microsoft has never had major releases of its core developer tools in three successive years — a cadence it appears to be closing in on. In fact, you'd need to redefine "major" to argue it has ever done two major releases in successive years.

But rate of delivery is not the only important change. Microsoft has begun to tear down the enclosures of its infamous walled garden. Last year, it officially supported Git. Who would have believed that the company would embrace not only a key competing product, but one that's open source? In the past, Microsoft would have written its own distributed SCM and touted it as the solution for its developers. A product written by its nemesis — the author of Linux — would never, ever have made its way into the product mix.

Speaking of open source, two weeks ago, Microsoft open-sourced key portions of ASP.NET. At the /build conference this year, Microsoft announced it would publish the source code for the majority of its .NET infrastructure, including the languages. How far the company has come from its early dismissal of open source!

There are other changes that are noteworthy and interesting: In Visual Studio for the cloud, Microsoft is putting itself on the cutting edge of development by inviting programmers to explore a completely new way of coding and product delivery. It has no major competitors in this effort.

Let's look at it another way, think of all the major vendors that compete with Microsoft — Oracle, IBM, HP, Google — are any of them doing as much, as quickly, and as successfully? In this sense, the image of Microsoft has evolved from a large, rather rigid, often unpleasant company very much at risk by the changes in the PC industry to an agile giant, morphing to not only fit the times but to take a leadership role in the evolution of technology. This is a rather remarkable turnaround for a company of this size.

None of this should suggest Microsoft is not facing important challenges: Its mobile presence is tiny and Windows 8.x continues to be a problem, as is the steep decline in PC purchases. But the company is certainly in a much better position to respond to these challenges than anyone would have expected two years ago.

— Andrew Binstock
Editor in Chief
[email protected]
Twitter: platypusguy

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