Microsoft – Riding Augmented Reality Back To Dominance?

I can only imagine the intense pressure in the meetings at Microsoft as it dawned on them that they had lost their pole position in computing. It is only natural that a market leader will eventually take their dominance for granted and mistakenly think that the world will dance to their tune indefinitely, but the crash couldn’t have been any fun.

The hissy fits between Microsoft and Apple played out in the public eye, so it had to be all that much more painful when their lead was taken by a rival that they had a habit of looking down on. I mean, normally we expect to see major disruption come from a new market entrant, not our old enemies.

Sure, Microsoft’s revenue has continued to grow steadily over the decades, but not as strongly as it could have been. Between 2002 and 2016, Microsoft grew their revenue by a factor of 3, while in the same time Apple grew their revenue by a factor of 26. 2016 global revenue for Apple was US $215B compared to Microsoft’s US $85B. This must hurt Microsoft’s ego really, really bad.

Not only did Microsoft completely miss out on the mobile and tablet markets, they almost messed it up with Cloud Computing. Amazon, you know – the guys that started out selling books over the Internet, has a 31% market share of Cloud Computing while Microsoft only has 9%.

So Microsoft messed it up with mobile, they messed it up with tablets, and they were late to the table with the cloud. Can they do anything right?!

Actually, the Phoenix seems to be rising from the ashes with a vengeance. There are two things that Microsoft seems to have taken to heart, even if it took a decade or two of punishment:

1) We live in an open world. While it would have been heresy only five years ago, last year Microsoft purchased Xamarin, a provider of multi-platform mobile development tools. Although still rough around the edges, Microsoft’s Visual Studio has implemented Xamarin support and will allow you to develop for Android, iOS and Windows directly on your Windows system – although you still need a Mac to compile and test iOS apps. This week, much to my amazement, I installed Microsoft Visual Studio on my Mac! That’s right – instead of killing the Mac based tools for Xamarin, Microsoft relabelled them. Microsoft is now delivering development tools on the Mac. Take a moment or two and let that sink in. It is a monumental mentality shift for Microsoft.

2) Augmented Reality will own the world sooner than you think and Microsoft is positioning themselves to be the king of Augmented Reality. While Tim Cook, Apple’s CEO, likes to talk about how important Augmented Reality is, Microsoft is actually doing something about it. It has been rumoured that Microsoft has spent in excess of US $1B in developing Augmented Reality hardware and software. In 2016 Microsoft started delivering the HoloLens with a hefty price tag of US $3,000. Windows 10 Creator update was recently rolled out with explicit support for Augmented Reality. This week, motion controllers for Augmented Reality were announced. This summer, you can expect to get Augmented Reality head sets from Acer and HP priced in the US $300 range. Currently, there are over 30 Smart glass / headset products on the market. I expect to see that rapidly dwindle to a few major players – HoloLens based devices, Tango based devices, and whatever Apple eventually pulls out of the hat. This time, I think Apple will lose the race, and badly.

I have never been a Microsoft fan. While I have great admiration for what they have accomplished with their products at a technical level, contempt is the only thing that I ever felt for their market approach.

I can only imagine how difficult it was to change the mentality that led to the modern Microsoft and will have to change my opinion about them. Congratulations! Hard work, well done! For the first time in over 30 years, I am actually looking forward to seeing what they do next.

(Note – this post uses the term Augmented Reality, however just about anything that goes for Augmented Reality also goes for Mixed, Virtual, Mediated and Diminished Reality)

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