I cannot recall a time when there was more change going on in the technology sector. The latest massive Microsoft reorganization is a case in point.
While Windows is dropping from the central platform for Microsoft—a move that was expected when Satya Nadella took over leadership from Steve Ballmer—it’s the blending of hardware and Azure that will be the most disruptive.
A lot of OEMs seemed to believe that Microsoft would back off hardware, given that Surface was a Ballmer, not Nadella, construct. But this reorganization suggests that not only won’t that be the case, personal hardware will play an even bigger role.
However, it’s likely the big moves won’t be some form of traditional desktop or laptop PC but something really very different...
Next generation of cloud-centric Windows hardware
I think the precursor for this future is the coming line of connected laptops which, interestingly, aren’t initially coming from Microsoft. But in a cloud-centric world, the critical part of the solution isn’t the processor—it’s the wireless connection.
Given that, even with 5G, that data path is likely to be constrained, local processing power will shift from task-driven types of activities to compression/decompression and encryption/decryption types of activities. Which, in turn, should benefit the GPU more than the CPU.
This means either a blended CPU/GPU—which could be either x86 or ARM—would seem to have the best chance of providing the best performance for the lowest amount of cost. Voice interfaces are also clearly going to benefit from this trend, opening the possibility that your digital assistant will become untethered to any one piece of hardware. Instead, it will migrate to the hardware you’re in closest proximity to. This could allow a voice assistant to move with you to hotels and planes, which then would automatically conform the related services to your interests and subscriptions.
In a smart environment, this would include both ambient entertainment and things like HVAC (climate) settings. We should also get to the point where a car will conform itself to your physical needs—even if it’s a rental—automatically, just by pulling down your specifications from your own digital assistant.
Personal hardware will increasingly drift from the laptop and tablet model we have today to a much more compact and visually pleasing Hololens kind of model. Head-mounted, so you could blend AR and VR experiences and place the voice interface closer to the ears and mouth. And by placing the screen closer to the eyes, you’d limit size and weight, and improve the overall experience.
Eventually these systems would be surgically implanted but, I expect, that change is well more than a decade out. Near-term, we’ll see an increasing blend of mixed reality goggles and more traditional form factors, until quality reaches a level where the redundant screens can be eliminated. This should then result in the self-contained Hololens-like products I’m anticipating.
Much of the foundational elements are already in place. The timeline will depend on how aggressive this new Microsoft organization wants to be. They could easily have converged products in segment by year-end, but I expect the timeline for convergence to be closer to a 3-7-year window.
Microsoft is not getting out of hardware. In fact, this reorganization suggests their hardware efforts will accelerate toward a cloud-centric future with performance at both ends.
All the elements for massive hardware changes are in place. Gating factors will be customer acceptance, and successful trials to determine which form of hardware will best encapsulate Satya Nadella’s cloud-centric vision. This will put a lot of pressure on Apple and Amazon to avoid being blindsided…like Microsoft was by Apple and Amazon.
Given that anticipating change has been historically bad across all companies, I expect—if Microsoft executes well (and they are executing well as of late)—that both Apple and Amazon will be caught flat-footed…just as they caught their competitors flat-footed earlier a few tech cycles back.
In the end, this Microsoft reorganization potentially goes well beyond Microsoft, and heralds what could be another massive market shift and change that most of us won’t be ready for.
Or, in other words, here we go again…
[Disclosure: Microsoft is a client of the author]
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