A year ago, I praised Microsoft for its transition to the cloud, citing Office 365 and Windows Intune as product lines demonstrating the software giant’s ability to change with the times. But 2012 was a year of massive upheaval, one that makes the previous year’s changes look like baby steps by comparison.

You can read last year’s assessment in the article "In 2011, Microsoft Began Its Comeback in the Cloud." And despite the fact that I’ve been touting what I thought of as an inevitable transition for years -- “the future of computing is both highly mobile and highly connected” -- I was somehow surprised when Microsoft announced a few months ago that it now thought of itself as a devices and services company.

As with last year, however, we’re just partway through the transition, and although the devices part of this declaration seems particularly ludicrous -- sales of Windows 8, Windows RT, and Windows Phone devices aren’t exactly competitive with those of Android or iOS -- the services bit is quite mature. Just a few years ago, Microsoft was what it’s always been, a software giant or, more succinctly, a maker of traditional software-based platforms. Today, the company is something much more than that.

Look across all of its major product lines and you can see how services, especially, have affected each. All of Microsoft’s core platforms are transitioning from traditional software to Internet-delivered services. Even Windows 8 can be installed via the web in just minutes and then serviced online. Office 2013 will ship for the first time in a widely available subscription service and then be updated on the same schedule as online services. Visual Studio 2012 is now receiving regular functional updates as well as bug fixes.

On and on it goes. Across the company, products that were previously on a monolithic slow boil are being updated to support a services-like infrastructure where future updates can happen seamlessly and more frequently. Gone is the service pack mentality of old, where products on a three-year lifecycle would be updated on perhaps a yearly basis. It’s been replaced with the online model.

Some have suggested that this new way of doing things was somehow inspired or triggered by Google, which makes products and services that are almost universally online services. It’s true that Google’s few non-services products, such as the Chrome web browser, are updated frequently and like online services. (Indeed, Chrome is currently at version 23, which sounds silly to us old-timers.) But I think the better way to view this is that Microsoft is reacting to industry trends, not a particular company. And by adapting to this new way to doing things, Microsoft is setting itself up to be relevant in the future.

This is a tricky transition, and it’s a far bigger transition than the previous transitions that the company regularly touts, such as the “Internet tidal wave” memo that triggered the building of Internet Explorer. (Lost in this conversation is the fact that this memo also triggered such disasters as the original MSN and Mungo Park.) In fact, Microsoft’s “we’re betting the company” mantra has lost its mojo, much as in “The Boy Who Cried Wolf.” But make no mistake, Microsoft is betting the company with this transition. And it all started to happen this year.

Of course, customers need to come along for the ride as well.

Businesses will as always bring up the rear when it comes to accepting this change and then implementing it, but I hope to see the day when that’s not the case. I still occasionally hear from readers who stop automatic updates because they were so burned by Windows NT 4.0 Service Pack 2 (or whatever -- I’ve honestly stopped caring) 15 years ago and have never trusted Microsoft to automatically update their software since. So we need to overcome that mentality. But we’re getting there in some ways, too: I’m also starting to see the conversation about cloud computing change from defensive arguments about why hosting data externally is bad to more pragmatic conversations about how and when this change makes the most sense. It’s become when and how, not if.

But this shouldn’t be surprising. We’re all doing this stuff on our own already anyway.

Many of us use services such as SkyDrive, Dropbox, iTunes Match, Amazon Cloud Drive, Carbonite, and Facebook, and although there will always be arguments -- both valid and of the Chicken Little variety -- against this amazing sea change in the way we do things, it all comes back to one thing: We as a user base prefer simplicity, convenience, and utility over all else, and when that can happen on drop-dead gorgeous devices, all the better. Microsoft got the message and drove hard to map its future to this vision in 2012. And it’s only going to accelerate again in 2013.

I have a hard time believing that I’ll look back on 2013 and find that the transitions of 2012 pale by comparison. But hold on to your hats. Maybe next year is when the company really makes the devices part of its “devices and services” definition really stick. The services stuff is already very much in place.