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Why rapid-fire updates are the key to Microsoft's success

Brad Chacos | April 4, 2013
Ask five geeks about Windows 8’s greatest flaw, and you’re bound to get five different answers. Some diss the new Start screen. Some hate the big hole where the Start button used to be. Others rail against the indignity of having to swipe open a Charms bar to print or search for anything. And what’s with those Microsoft Accounts?

Microsoft needs to tread carefully as it wades into the incremental waters, however.

While a continuous development cycle will prevent the kind of drastic overhaul thats inspired cold water shock in first-time Windows 8 users, it also opens up the possibility of pissing off all users by introducing minor, irritating UI changes all the time.

While it definitely makes sense to introduce changes incrementally from the standpoint of helping users to adjust their learning to new features, you need to be careful to help, not disrupt user learning, says Andrea Matwyshyn, an assistant professor at the Wharton School of Business.

Nevertheless, in the past, big problems with a new version of Windows stayed big problems until either the next version of Windows appeared, or an all-too-rare Service Pack was released. The end of those days is a welcome change indeed.

Of virtuous circles

More portentous, however, is what the shift to frequent updates means for Microsoft itself.

This is a huge change for them, says Wes Miller, research vice president at Directions on Microsoft, an independent analytical organization dedicated to tracking the computing giant. And, Miller says, the change stems from the companys recent reimagining as a device and services company, rather than a pure software company. Steve Ballmer announced the new mindset in a letter to shareholders after the announcement of the Surface tablet.

Thats why theyre doing this, Miller said in a phone interview. Theyre trying to add value to the Windows platformWindows 8, Windows Phone 8, et ceteraon an annualized basis, both so that they can sell more devices and so that they can sell more services related to Windows. The hope is it becomes a virtuous circle: You buy a Windows device and buy Microsoft services [to complement it], then you buy another Windows device and continue using Microsoft services, and so on.

The future is software as a service, not just software. Because of that, Microsoft is attempting a monumental rejiggering of its core business.

Microsoft wants to wean customers off the habit of paying for a one-time perpetual license for software, and into the habit of paying for services once per year. Microsofts stacking of the Office 365 deck over a traditional Office 2013 installation? Its no mistake. Theres no technical reason why Microsoft couldnt deliver new feature updates (like the rumored Office Gemini) to traditional Office 2013 users as easily as they do Office 365 users. But it wont do that, because Microsoft prefers that you subscribe to Office 365 rather than buy Office 2013 outright.

Services translate into more money (and more regular, predictable cash flow) over time for Microsoft. But, accordingly, software services also need more frequent updates to provide value over traditional, static-yet-functional alternatives.


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