Cool Hunting

Microsoft Rises Again

Microsoft for distort Reuters_effect
Microsoft's renaissance is gathering pace.
  • Why it matters

    Why it matters

    Microsoft’s decision to offer the new Windows 10 for free to current older-version users is a masterful move, that costs the company little but reaps major PR benefits.

  • Facts

    Facts

    • Microsoft’s new Windows 10 is expected to be available to the public in the second half of 2015.
    • The company recently unveiled a futuristic new headset, called the HoloLens, that allows users to interact with holographic images.
    • The company’s acquisition of Mojang, the Swedish company that makes the hugely popular Minecraft game, has given it access to a young, dynamic consumer group.
  • Audio

    Audio

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Whether it’s Berlin, Tokyo or New York, for millions the office day begins in the same way – by firing up the computer and waiting for Windows to load.

Microsoft places the number of users of its Windows operating systems at around 1.5 billion – that corresponds to a gigantic market share of 95 percent. Not bad for software that was pronounced dead years ago.

At the moment, it looks like Windows will remain a part of everyday office life for years to come. There are no viable alternatives in sight.

Neither Apple nor Google have been able to drive Microsoft from the workplace. And what’s more, the chances are good that the software will grow even bigger as Microsoft, based in the U.S. state of Washington, becomes more daring and aggressive than it has been in a long time.

Last week Tuesday, its current chief executive, Satya Nadella, presented the latest Windows update, Windows 10. Most amazing of all was his promise to offer the update free of charge for the first year to users of older versions of the package.

Has the 47-year old gone completely crazy? Who gives away for free wares that cost a fortune to develop?

But this seemingly wild behavior is well thought out. Microsoft can only stand to gain by it – both financially and image-wise.

Microsoft is once again being seen as a company that takes chances and dares to venture into new technological territory.

The costs of this free offer are minimal – after all, once the software has been produced, it can be distributed without major expense or effort. The cost of loss in sales is likely to be kept within limits because hardly anyone buys a new version of Windows for an old computer.

And whoever buys a new computer in the future, will also have to pay for Windows.

On the other hand, the opportunities are enormous. The more people use the new version, the more attractive the software becomes for developers, who would otherwise probably rather program apps for mobile operating systems from Apple or Google.

Microsoft has an advantage here in that Windows 10 runs on many device classes besides PCs and notebooks, including tablets and smartphones and even the Xbox console. So whoever thinks the new Windows running on his desktop computer is good, might also be tempted to buy a cell phone with that operating system in the future.

But that isn’t all. What’s really interesting is that Mr. Nadella’s generosity increases the chances of selling many more apps. For example, Windows 7, which is still widely in use, doesn’t even have an apps store. Every user who upgrades to version 10 is therefore a potentially new source of income.

But Mr. Nadella isn’t just treading new ground with Windows. The corporate executive, who has been leading the company for a year, is trying to make Microsoft a cool brand name again. And his approach is precisely the right one.

 

Video: Introducing HoloLens.

 

Although the company has been earning magnificently in recent years, Microsoft is often considered outmoded. In the eyes of customers, Apple, Google and Samsung are considered to be innovative brands.

Last fall, Mr. Nadella purchased Mojang, the Swedish producer of the popular computer game Minecraft. With it, he accessed a young target group.

Microsoft is already taking advantage of this, presenting a pair of 3D glasses with HoloLens, which works independently of computers and seamlessly blends virtual high-definition holographic objects with the user’s real world.

In addition, Mr. Nadella has incorporated a voice command function in Windows 10, a feature that until now has only been available with smartphones.

It is too early to speak of a turning of the tide. Although Microsoft is to be found on almost all PCs and notebooks, it will have a tough time in the booming smartphone and tablet sector. Whether this will finally change with Windows 10 remains to be seen.

What has changed since the departure of long-time company boss Steve Ballmer, however, is the firm’s public image. Microsoft is once again being seen as a company that takes chances and dares to venture into new technological territory, making it attractive to young trendsetters.

Wall Street investors often have a good sense of how a company will develop. And they have long been convinced that Microsoft has a future. Within a year, its stock rates have risen by almost a third.

One thing is for sure, Microsoft will be a company to be reckoned with again in the coming months.

 

To contact the author: hofer@handelsblatt.com

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