"Be bold and be right" was the mantra passed down from former Microsoft CEO Steve Ballmer to predecessor Satya Nadella, the latter recounted in front of CIOs and IT executives at the recent Gartner Symposium in Orlando.
The products and updates unveiled at this week's Microsoft Windows 10 event are certainly bold, but are they the right move for the productivity powerhouse? And why should CIOs care?
Let's start with what was unveiled: A major Windows 10 update dubbed the "Creators Update" that features new 3D creation tools and Microsoft's new flagship laptop -- the Surface book i7 -- are on the way, as is the Surface Studio, a sleek touchscreen all-in-one computer that can tilt down to become a drafting board and which marks the company's first foray into desktop computing. Also notable is the introduction of Windows 10 VR headsets that will allow users to see and interact with 3D images overlaid on top of the real world.
"Microsoft has planted a flag right in the heart of the maker/creator movement that says its platform is ready to enable new interesting opportunities to interact with data [and] other people in both the virtual and physical world," said Steve Kleynhans, a research vice president at Gartner who specializes in mobile and client computing.
Although this new crop of tools are aimed squarely at creators like architects, product designers, graphic designers, developers and others, analysts agree that they serve to elevate the company as a whole and forge a path for Microsoft in the immersive VR, AR and 3D space -- something that will impact the enterprise in the long term.
"I think the announcements and emphasis puts Microsoft at the forefront of the next generation of user interfaces," said Gartner analyst Tuong H. Nguyen. "They can create a foundation for consumers and business users to associate these new, immersive AR and VR interfaces with Microsoft. There’s potential for Microsoft to regain a leadership role in the immersive space that they were previously unable to do with mobile."
That's good for Microsoft -- which recently saw its stock hit an all-time high and is reporting a strong increase in year-over-year sales of its Surface devices -- but also for Microsoft-entrenched CIOs, said J.P. Gownder, principal analyst at Forrester.
"I think a healthy Microsoft is an important piece of the puzzle for many CIOs who may have traditionally relied on a lot of Microsoft technology, but have wondered what the future of the company is," he said. "I think Microsoft is looking healthier than it has since Ballmer left."
Beyond the company itself, the technology touted at the Microsoft Windows 10 event serves as further incentive for enterprise IT to prepare for the next wave of computing, said Kleynhans.
"Enterprises aren’t going to buy Surfaces for their entire population of users, but the types of interaction models these devices champion will become common on systems from all manufacturers over the next couple of years," he said. "Enterprises need to look at how they can leverage these new experiences as they build their digital workplaces for the next decade."
A big part of that next wave is, of course, AR and VR, which Gownder said will seep into B2E for training, B2B2C with customers and eventually B2C, and keep CIOs very busy.
The most interesting announcement from the Microsoft Windows 10 event for Gownder was around 3D integration into Windows Holographic, the Office suite and the Paint app. He says 3D technology, like holograms, will play a big part in the enterprise.
"If you're moving to a world where there's a lot more virtual and augmented reality, you're going to need 3D assets to display, and democratizing that 3D capability is a key outcome of [this week's] announcement," Gownder said.
Kleynhans warns that 3D is going to become mainstream quicker than many have expected and that CIOs and corporate developers need to start looking at where it might fit into their AR and VR strategies and how immersive technologies will change the way they deliver IT.
As demonstrated at the Windows 10 event, Microsoft’s strategy isn’t about building PCs, but rather showing a path for where devices and technology -- in the office and home -- can go, Kleynhans said.
It's the CIOs job to track that path.
CIO news roundup for week of Oct. 24
The Microsoft Windows 10 event wasn't the only big news. Here's what else was happening in the world of technology this week.
AT&T, Time Warner and 5G wireless services. AT&T's proposed acquisition of Time Warner Inc. grabbed headlines this week as everyone from presidential candidates to Wall Street analysts to "Game of Thrones" fans voiced their opinion on the deal. While much of the discussion centered around whether the acquisition would survive regulatory scrutiny, the impact on the two companies' stock prices and the advisability of huge media mergers, The New York Times drilled down into AT&T's plans to compete against traditional cable providers via 5G wireless, which promises 100x speed gains over today's wireless tech. “I will be sorely disappointed if we are not going head-to-head” with cable providers by 2021, AT&T CEO Randall L. Stephenson recently told the Times. Beyond benefits to video delivery, the new wireless spec represents the "holy grail of mobile communications," said the Times, and is expected to aid services like autonomous cars, delivery drones and IoT devices. Yet, the Times noted, 5G is unlikely to be deployed at scale within the next decade, because carriers and telecom equipment makers have not come to an agreement as to how the technology should be implemented and, once an agreement is made, the cost of installing the network will be high.
Power of Watson. With IBM's artificial intelligence-powered Watson technology being increasingly used in industries like retail, automobile manufacturing and healthcare, IBM president and chief executive Ginni Rometty believes that Watson will be behind every important business or personal decision in the next five years. Rometty predicted that a billion people will be using Watson in some form by the end of 2017, the Wall Street Journal reported. IBM also introduced the Watson Data Platform at this week's World of Watson conference in Las Vegas. Fueled by machine learning, the platform will help expand "AI's business impact by enabling collaboration" and allow "data professionals to easily visualize and share insights across the enterprise," the company said in a statement. IBM's AI announcements come within a week of Gartner releasing its list of the top 10 strategic technology trends for 2017, with AI and advanced machine learning topping the list.
Microsoft's revenue gets a cloud boost. Microsoft reported earning $20.5 billion in GAAP revenue and a GAAP net income of $4.7 billion in the first quarter of its 2017 fiscal year earnings, numbers that were driven by growth in Office and cloud revenue. "Intelligent cloud" revenue increased by 8% to $6.4 billion. Azure revenue grew 116%, with Azure usage doubling year-over-year, the company reported. "We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences," Microsoft CEO Satya Nadella said in a statement. Consumer subscriptions to Office 365 topped 24 million, while Office commercial and cloud services revenue grew 5%, according to the statement.
Vehicle cybersecurity guidelines. In a bid to improve motor vehicle cybersecurity, the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) released a set of cybersecurity guidelines for automakers and developers Monday. "Our intention with today's guidance is to provide best practices to help protect against breaches and other security failures that can put motor vehicle safety at risk," U.S. Transportation Secretary Anthony Foxx said in a statement. The guidelines were based in part on public feedback, and emphasize the need for a "layered solution" to ensure vehicles are designed to take appropriate actions when their security is compromised. The guidelines suggest best practices for product development, research and cybersecurity verification. The NHTSA recommends that cybersecurity be a top priority for the automotive industry.
Twitter to cut jobs. The microblogging service provider announced Thursday that it will lay off 9% of its 3,900-employee workforce as it attempts to reach profitability. The company’s third-quarter earnings beat analyst estimates, but showed a $103 million GAAP net loss equal to 15 cents per diluted share. The company said it will lay off employees in sales, partnerships and marketing. "We’re getting more disciplined about how we invest in the business and we set a company goal of driving toward GAAP profitability in 2017," Twitter CFO Anthony Noto said in the company’s earnings release.
Assistant editor Mekhala Roy contributed to this week's news roundup.
Check out our previous Searchlight roundups on quality assurance and the Samsung's Galaxy Note 7 disaster, the security versus privacy debate and CIOs becoming business technologists.