If you blink too fast, you're going to miss something. That seems to be the case with Microsoft news these days. Just when you've had a moment to catch your breath, another crazy bit of news explodes from the Redmond shores. Truth told, I'm still out of breath from the last 6 weeks and ready to cry "Uncle!"
However, there's quite a backstory going on that I don't think people see. Let's go back a ways to some conversations I had with colleagues at Microsoft several years ago. Around 2004, in-person chats and email threads revealed a Microsoft that was trying to develop a way to turn computing into a utility, much like electricity or sewage. Each new turn in the company roadmap, many execs were looking for just the right moment where technology and market could make this possible.
You see, Microsoft truly wants to be everything to everyone. Microsoft truly wants to be your IT, providing hardware, software, and services to the business. This didn't just start with the Cloud, this started long before that. Microsoft's march to devices and services is a long time coming.
So, looking down the long list of improvements, product releases, and acquisitions, what is the one thing that Microsoft is missing?
Microsoft will make some minor acquisitions to continue to bolster its march toward a devices and services company but the one key piece they don't currently own is Cloud hardware. Immediately you might consider this a slippery slope, since Microsoft needs hardware partners to run their software and stock their services. But, think about it. Microsoft has already alienated PC and tablet partners by manufacturing the Surface RT and Pro, and is now treading into murky partner waters with the acquisition of Nokia's smartphone business.
Microsoft has long been kind to partners, but recently even that relationship has been confused and strained. Also, once a strong advocate of IT, Microsoft is silently ignoring the group that has been its most supportive. So, truly, there's no aspect of Microsoft's past business practices that is off the table. Microsoft truly wants to change and that change isn't dependent on whether or not customers or partners like it. Microsoft knows where they want to be in five years, and they know exactly what the company should look like. The vision all started in 2004 (or earlier).
When I talked about having an Xbox in the datacenter, people thought I was joking. I wasn't. I truly believe that one of Microsoft's next major acquisitions will be a server hardware business. Imagine acquiring a Private Cloud direct from Microsoft that is a small device that just drops straight into your datacenter and runs as soon as you plug in the power. It's a Microsoft-branded hardware device, fully loaded with a version of Windows Server and automated with System Center so that a person in a Microsoft support center could be notified of problems and then dig straight in to fix it. No IT required. No partner needed. Businesses just pay a monthly or yearly fee, just like they're already used to paying for subscriptions.
All of the major PC manufacturers (except for Lenovo) are struggling. Dell is having a hard time trying to change into a private company, and while their PC sales numbers keep dropping, they do still have a server hardware business. However, even though Dell may look like a likely candidate for a Microsoft acquisition of their server business, I think the real acquisition could shock all of us and might possibly involve a company known for its abbreviated two-letter name.
It's only a matter of time.
So…am I off base here? Do you think Microsoft is likely to stop just short of being THE source for all computing needs?