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Microsoft's 'let the past die' consumer strategy is a necessary evil

Satya Nadella
Satya Nadella (Image credit: Windows Central)

When a company pivots in strategy – especially one as large as Microsoft – there is usually going to be a lot of damage left in its wake. That is most obvious when it comes to the consumer space, where if you're a die-hard fan you may feel like the company is killing everything you love.

That observation is not entirely wrong. Whether it's scaling back some of Cortana, shutting down Groove Music, discontinuing Xbox Kinect, halting sales of Microsoft Band, or letting Windows Phones die on a vine, the company has undoubtedly scaled back in the consumer space.

But there is a critical pattern here that needs to be talked about, and that is the refocusing of the company.

Killing old products

Zune HD

Zune HD (Image credit: Richard Devine/Windows Central)

The list of Microsoft's failures in the consumer space is quite extensive compared to Apple or Google. The reason for that was a systematic problem during the Steve Ballmer era (2000 to 2014), when Microsoft's organization was more siloed, with specific groups working independently. This strategy changed in Ballmer's final years as CEO of Microsoft as he set in motion a more unified program, which was eventually picked up by his replacement, Satya Nadella. But the impact of that legacy system is still being felt today.

This effect is noticeable under Windows Phone, which didn't see widespread backing in the company until 2010 and later – and even then, many people thought that was too little, too late. Windows Phone, previously known as Windows Mobile, was a side project to Windows, which was the company's bread and butter through the 2000s. Ballmer admitted as much, saying missing mobile was one of his most significant failures.

The same can be said for Microsoft Band. The fitness wearable was launched in the middle of the night with almost no press briefings or fanfare. Indeed, Microsoft called the Band "a demonstration device for Microsoft's sensor and software technology," and not a broad consumer push. This explanation is one reason why it was always in short supply and only in a few markets.

The point is neither Band or Windows Phone can ever be used as an example of Microsoft success in the consumer market. The launches – and subsequent support – were, for the most part, half-assed. Everyone saw this, including fans.

Whether it was Zune, Phone, Band, or even Kinect, you could make the argument that these products rarely saw the full support of the company.

What's changed since 2014

Surface Book 2

Surface Book 2 (Image credit: Windows Central)

The reason for this history lesson is simple: All the products and services that Microsoft is cutting back on or removing come from the Ballmer era.

Quoting Kylo Ren from Star Wars: The Last Jedi (2017) "Let the past die. Kill it, if you have to..." seems to be the mantra for Microsoft. That does not, however, mean there is no vision for the future.

Under CEO Satya Nadella – love him or hate him – the company is taking a much more conservative approach to product launches. No longer are we seeing little side projects creep out to the market with only middling support and enthusiasm.

This has never been more clear than with Surface and Xbox. Whenever I hear that Microsoft doesn't care about consumers, or they're turning into IBM, I look at those programs. Both have flourished since 2014, and we do not see the Surface team commit to new hardware unless they have complete faith in its success. Surface Pro, Surface Laptop, Surface Book, Surface Hub and Surface Studio are all very well-received, supported, and endorsed products. Xbox One S and Xbox One X – and the related Xbox Gold service – are doing very well for Microsoft too. And they're consumer products.

In late 2017, Xbox and gaming became so important Phil Spencer, Microsoft's Xbox chief, took a seat at the leadership level in the company. Why? The gaming division is now focused, turning profit, and there is a vision of accountability. As a result, Nadella now boasts about how important gaming is to Microsoft's future. None of that is new as Nadella in 2015 stated, "We will pursue our gaming ambition as part of this broader vision for Windows and increase its appeal to consumers."

Compare how those products feel to Microsoft Band, or even Windows phones, and it's vastly different.

These cuts, while unpleasant for fans, are necessary. Many have argued that the company was stretching itself too far and too thin in already competitive markets and even the fans lambasted the company for poor marketing and support, such as Groove Music.

That is not to say everything is perfect now. Looking at the Harmon Kardon Invoke ring bells of Microsoft Band-era launches, unfortunately.

Where Microsoft still fails

The most significant problem Microsoft faces in the consumer space is not this continued retrenchment, but the lack of heads-up to its core base of users.

Kinect, Band, even phone could all be discontinued, but without any hint that something better is coming down the line, that's a very unpleasant experience for users.

I have every reason to believe that Microsoft will have a solution to the lack of voice-control options for the Xbox One likely this year, for example, but that's insider baseball. Consumers don't know this. They just see there is no Kinect, there's nothing to replace it, and there are zero hints that Microsoft is concerned.

This strategy of just cutting products may be necessary, but the way in which Microsoft handles it is terrible. Even with Mobile, while Nadella has dropped hints of a return to the mobile space, the comments are too opaque for consumers to get excited.

Another example is Groove and Spotify. Maybe the two companies are indeed working on a co-strategy where we'll see Spotify effectively replace Groove for consumers throughout that Windows ecosystem. That'd be amazing. But with Groove now gone, and that hypothetical situation not yet a reality, the pain for consumers is palpable.

When core fans retreat and say they're done with Microsoft, it is hard to blame them for feeling screwed. This is the part where busting out idioms like "to make an omelet you have to crack a few eggs" comes in, but that is hardly a satisfying answer if you're invested in Redmond.

Towards a stable future

MS logo

MS logo (Image credit: Daniel Rubino / Windows Central)

If there is good news to any of this it is that going forward, hardware and services that come out from Microsoft will be of a different form than the Ballmer era.

Microsoft internally is working more coherently and more focused. Over the summer, during my tour of the Surface lab, Surface head Panos Panay gushed about how the latest Surface Pro is the first device that his team was able to collaborate on with the Windows, Office, and OneNote teams. They expect much more of that going forward, but it was only due to the massive internal shift at the company that it could finally happen.

Even Windows Mixed Reality, which is still in its infancy, feels like a concerted effort from the company. It may still be niche, but you can't say Microsoft cut corners to make it all happen.

Phil Spencer

Phil Spencer (Image credit: Windows Central)

This symmetry and symbiosis is an ongoing project for Microsoft, but the result is devices and experiences – like Surface Laptop, Surface Book 2, and Xbox One X – that stand on their own.

Fewer, but stronger product lines versus many, but weaker ones. That's the difference now and it's an important distinction.

Going forward into 2018, we'll see more of this with Windows Core OS and other new products. For now, though, expect more of the same. There will be fewer products and services, but the ones that remain or launch will be treated as real company launches and not side projects.

Daniel Rubino
Executive Editor

Daniel Rubino is the Executive Editor of Windows Central, head reviewer, podcast co-host, and analyst. He has been covering Microsoft here since 2007, back when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, Microsoft Surface, laptops, next-gen computing, and arguing with people on the internet.

  • Can you imagine if Xbox started 4 years ago?  That too would be getting cut today.  That's my belief.  It's the consumer products that made me enjoy Microsoft.  With no products there isn't much there for me.
  • The analogy makes no sense, or rather, would be a failure. A company like Microsoft trying to start Xbox "4 years ago" would be easily the worst decision to make and it SHOULD be cut, because there is no way it would succeed. Xbox only worked due to a long-term commitment, but the market was still early.
  • And that's my point.  There would be no long term commitment.  When the rumors were swirling that the Surface Pros may be discontinued I thought it had merit and still do.  The only thing that gave me hope was that Microsoft and the NFL signed an extension to their deal.  But that's only for a year.  I guess only time will tell if there's really a commitment.
  • Those rumors were from who exactly? Lenovo? Some analyst you never heard of? There are now five Surface products: Pro, Laptop, Book, Hub, and Studio. And we're getting strong hints of a sixth one for this year. They're accelerating, not cutting back there.
  • Believe me when I say I'm hoping for nothing but success for Microsoft.  I believe they are a very creative company.  But it's difficult to see anything rosy at this moment when I've invested time and money into a Zune player, Xbox, Xbox 360 (2), Xbox One (2), Band (2), Windows Phones (7), Surface Pro (1), Zune/Xbox Music/Groove, Office, and other products that tie into Microsoft consumer line and not feel somewhat jaded with these moves over the past year or so.  And for other's like me who have supported Microsoft it seems like a slap in the face.  So, when some of us don't see the light at the end of the tunnel you should give some leeway. 
  • This entire article is about what you just said, did you read it? It's acknowledged that many things have been cut in the past and the point is criticizing Microsoft's process and communication to consumers when it does happen
  • I can tell you with inside information that Surface is here to stay.  There is a strong commitment from the highest levels to the Surface product line - just go check the Surface product tour in Redmond.  The commitment to building the worlds quietest room (anechonic chamber verfified by guiness book of world record), the machining capabilities, the facilities in general are not from a company about to get out of the business - on the contrary, it's accelerating.  We are talking best of breed devices which set the bar for OEMs and drives innovation with the OS.
  • Hope for pocketable device. Wearable would soon follow suit.
  • Every single one of them has been a failure in sales. Panay should be fired.
  • Along with Sateya Nadulla. Under his leadership, MS have no relevence anymore. When was the last time anyone got excited about MS?
  • "When was the last time anyone got excited about MS?" When they showed off Hololens a few years ago?
  • Yeah! And with the launch of Surface Studio and Xbox One X!
  • I believe, when there is now Windows on ARM, they will continue with Surface (non-pro) line. It was cheap well-selled surface product
  • I wondered if that year commitment was probably to give them time to switch to android or ios. 
  • That is his point. Microsoft no longer commits long term. So his senerio is accurate.
  • The scenario is inaccurate. Surface is an example of what, exactly? Lost money, has good/bad quarters, yet...five products, 2 of which that launched in the last year. And we'll see about Windows Mixed Reality, but so far, it is 100 percent the long-term play. Who else builds their OS around mixed/virtual reality right now?
  • In all honesty, I think the "five products" isn't a defense of the platform. Part of my reasoning is that the two new products are the two worst I've seen from the company, in my opinion. The Surface Laptop, as I've releatedly said, is a total self-contradiction. In a market they claimed to want to innovate, they showed up in 2017 with a product that fits the design scheme of what they claimed to be looking to innovate on with the first Surface launch. Plus, as I have also said, the clamshell design defeats the Pen support, in a lot of ways. I tried a Surface Book as a laptop with the Pen in that chassis setup, and it's just not pleasant to write vertically. The Hub and Studio are VERY high-end, niche products. The new Surface Pro was such a negligible iteration that they said themselves that it didn't get a numerical moniker because they didn't think it was worthy of it. Yet, they took the included Pen from the consumer, raised the price of the standalone Surface Pen, AND raised the price of the now-penless device. Oh, and they didnt' refresh the Type Cover properly, just throwing on the Alcantara stuff to raise the price $30 and lesening the color options. All told, they've trended heavily towards an Apple model--the exact one many Windows fans hate. They're putting premium prices on things and being more about form than function. The new pricing on the Surface Pro package and the Surface Laptop seem to be the most obvious--pay more, get the same or less, even as we lessen our efforts to be maret leaders. They're very Apple-like in a bad way there. In the case of the Surface Pro, it's gone form the go-to recommendation for me to one I have a hard time suggesting, the price increase has gotten so heavy (what was probably $1,000 for my work to order before is now about $1,100-1,200 for the same hardware tier). Regarding the WMR, I'm torn. I was really happy to see them come out with an array of devices at varying price points with some semblance of harmonized functionality. The addition of SteamVR was huge and a great move. However, they're not totally "building their OS around" the platform. They're barely putting out first-party content, and most of the big-name titles from third parties are ports from SteamVR at higher prices (Arizona Sunshine and Superhot go on sale for lower prices on Steam than on the Windows Store, as two examples). Plus, Microsoft is still doing a poor job of making WMR content easily discoverable in the Store. I can open Steam and hit the "VR" link from the home page, while I have to go to the Apps apge, into Colletions, then go to WMR in the Windows Store...then I have to follow the same process in the Games tab to get to the WMR games, meaning I can't find a true "WMR" hub worth dirt in the Store in any kind of timely fashion. Microsoft used to be a software company. They claimed to be "software and services," but it really feels more like "services and a platform." They want everyone else to do the content creation and innovation these days. They lightly iterate and bring out features, but they're still marketing their products and platforms poorly and asking a lot of the market to support MS, rather than MS giving reasons to be supported.
  • You're ignorant if you think the latest Surface Pro is a negligible update.... especially since it now offers LTE.
  • People are stupid Dan! Don't listen to them.
    They are here to troll MS and you;")
  • whatever dude! we gonna say how it is. 
  • You mean other than Google and Apple?
  • If by "the market was still early" you mean "had been around for 20+ years", you're correct. Launching in any space where there's competition requires commitment. Microsoft under Nadella lacks that commitment to anything but obvious bets like cloud services and tablets. Microsoft would have been better off keeping Ballmer.
  • "If by "the market was still early" you mean "had been around for 20+ years", you're correct." How many console manufacturers from those 20+ years prior to the launch of Xbox are still in the business again? Atari, Sega and SNK have all ceased their gaming hardware operations long since then and are content enough to just publish and/or develop games these days, while Nintendo has chosen to not directly compete in the market, rather carving a niche for themselves. Sony is really the only true competitor to Xbox, and Playstation as a brand has only really began to earn the fanbase it has nowadays with Playstation 2, which launched just a year before the original Xbox. So yes, Daniel's assumption that the market was still green then is correct.
  • Balmer actually seemed to care.  I really can't say that of Nadella from what I've seen. Now Balmer made mistakes, but Nadella seems focused solely on keeping shareholders happy and thats starting to be shown as the typical risk adverse management style that brought IBM undone.  Most of the listed cut products were ones that quickly gained a lot of love and support from the target audience, but its hard to think than anyone would love azure or officen in the same way that fans latched onto xbox, WM or zune.  Without those loyalty eliciting products you don't have the grassroot support that promotes the brand and message.  MS needs that right now, all that's needed to scupper azure is a competing/compelling offering from amazon or google, and they are ABSOLUTELY working on that like crazy.
  • Whether Balmer cared or not, his products were terrible and failed because they were terrible. Caring doesn't guarantee quality.
  • Ballmer was more willing to give a bleeding horse another chance. Nadella is more conservative and consequent in his approach, it's different, but what Microsoft needs now. A little focus is good. But Ballmer laid the foundation for Nadella's succes. He's the most under valued CEO of this century (Till this date at least).
  • "Microsoft would have been better off keeping Ballmer."
    Literally all of Microsoft's modern problems can be traced the Ballmer. The fact you cannot see that is the problem. You folks are in insane if you thought Windows phone - under Ballmer! - was done well. Or Windows 8 (!) was the smart move for Microsoft. This is crazy talk and delusion.
  • Do you ever recognize Microsoft problems? Or you accept any dumb thing they do? I really didn't want to read this article/comments cuz it was by Dan Rubino...will be same ol-defense on Microsoft's side. Regret reading and hope this will be the last article I read from Dan, I can't accept this blind folded walking.
  • You're asking if he ever recognizes Microsoft problems by replying to a comment where he states he thinks a lot of Microsoft's current problems stemmed from Balmer's era? Ok then.
  • Agree. I love it when people say that Windows Phone/Mobile failed because of Satya, when the reason it failed was because Ballmer was slow off the mark in the first place.
  • So Nadulla killing WP is a winner?
  • Keeping it was definitely a loser.
  • Killing? It was already dying. Even at the peak, Windows Phone/Mobile was barely able to even scratch the success Android and Apple experienced and still are experiencing. It was too late to the market. By the time is arrived Apple was making waves with iPhone. Windows Phone arrived and it took them numerous updates to even bring multi-tasking (even that was half-assed) to the OS. I look back at their updates now, and I think I way too patient with MS. Ballmer being slow and writing off smartphones is a mistake Microsoft has never recovered from.
  • Daniel Rubino, What ? Hololens were developed under ballmer, Windows 10 (beginnings) were developed under ballmer. Big switch in software design (Windows 8) such as Flat design, (When Apple copied it in the iOS 7, and Google with Material design), 2v1 devices.. Everything was developed UNDER BALLMER. Everything what we see now (Surface devices, hololens, simply and clear SW design, 2v1 devices...) was developed under ballmer. I dont think Nadella will ever bring something new. Maybe Ballmer was not good Leader, but at least he had a vision.. Nadella looks like he doesnt even know what is he doing there.. and Windows 8 was just big step, and it was too early for people. And the Windows Phone was raising.. just a little, but it did. (And yes only under Ballmer)
  • I'd say Nadella is good at sustaining what he is given. He seems to be very careful and confident in his decisions.
  • Yes, Ballmer made mistakes (Vista and Windows 8 comes to mind).  But by the time he left he was getting his act together and things were actually looking good.  Windows Phone was actually starting to have a good presence in many markets (and is definitely the best mobile OS and still is today, though WP8.1 was better than W10M).  Nokia's purchase would have been a good move had Ballmer stayed.  But Nadella didn't see things the same way and scrapped everything Ballmer did without consideration to the public, only to shareholders. Now hoping for a new mobile device using Windows on ARM...
  • WP8.1 better than windows 10 mobile? Best Joke of the day, as a matter of fact if you do a survey you will see salty device owners of Samsung Ativ se angry for not getting win 10m even though it’s 1520 hardware hence you see a lot of people going to android after the transition. I for one sold my ativ se and bought a Lumia 640 just for windows 10m but Microsoft doesn’t recognize why android is successful and that’s the ability for having all kind of users those who like free and those who don’t mind spending and the simple side loading of apps but somehow Microsoft thinks they are Apple when it comes to phones but their platform started with side loading of apps. Android has a store and you can still side load apps easily and windows 8.1 lol
  • That's what's missing from modern Microsoft. Long term commitment. Xbox struggled for years at the start and many said they should have just it up.
  • Yep, yep, yep. This guy should be running a motel 8 on interstate 66, not running a massive corporation.
  • And you would still not be happy. Perhaps you can tell that to him personally or publicly, via a tweet instead if ranting here.
  • That's what's missing? I thought it was products people wanted to buy. It wasn't phone. It wasn't Band.
  • You are back to writing these kind of articles that try to explain how  Microsoft failure is their strategy. It might be true that there are fewer lines now, but with Ballmer they had the balls to make an initial failure a success in the long term. Satya still has to bring out a successful line of Hardware. Oh and you can tell if something will be a success or not before it launches. You were the only ones hyping Harman's speaker. No consumer knew about it (in fact, who is Harman?). You cant bring out a product like that without investing heavily in marketing. That they dropped support for Kinect Gestures right after selling all those Kinects with the Xbox is just a slap for all the customers. And that was years ago. They are not breaking the eggs for the omelettes. They are throwing them out of the window. 
  • Oh and dont believe a word what Panos says. That guy would sell you his grandma. You see it when he presents the Surface Laptop and explains how easy it is to ink on it while holding the shaking display. You saw it when he answered Consumer Reports about the quality of their products (have you seen the houndreds of unanswered complaints about the new Surface Pro and the pen issues when you touch the metallic parts while inking?) 
  • "Oh and dont believe a word what Panos says. "
    If I shouldn't listen to people at Microsoft who work on this stuff and I interview, I'm not listening to "El Mac" in comments ;)
  • Daniel.   I love the comments brother.  They are FUNNY!
  • And therein lies the problem. How can you begin to innovate and bring new things to the table, if you're expecting it to be an instant success?   The Xbox scenario is valid, when Xbox was launch Playstation was HUGE, Microsoft just don't seem to have a stable vision, it flip flops all over the place, and all that suffers from it is consumers (Microsoft will probably suffer soon, as more and more people take their business elsewhere.) I have used Microsoft hardware since I can remember, but they've lost me now. I have the Xbox One X, because the Xbox is the only thing they really appear to be committed to. Gone is my band, and phone and countless other forgotten devices, replaced by and iPhone and Apple Watch. People used to mock Google for having a fragmented OS, but guess what, at least they still stand by it. As you said in the article " to make an omelette you have to crack a few eggs" which is fair enough. But Microsoft need to get all the ingredients ready, and make one finished, good omelette. Instead of cracking eggs every year or so, because the omelette didn’t come out as expected.  
  • So, why hasn't Nadella canceled Surface? It lost money, sales/rev is relatively flat. Instead, they added more products. Go.
  • Well current surface range protects their bread n butter. PCs are important and the decline had to be slowed /reversed. But Nadella is not a risk taker. He is a very conservative guy who likes to play safe. 
  • Usig such logic Excel, Word and even PDAs powered by MS OS would have never existed: there were already dominant, and succesfull, products dominanting a very well established market.
  • They had a winner in Band 2. I would certanely brought Band 3 if it has shipped. But instead I was forced to go elsewhere when my Band 2 broke for the secound time, and I did not get a replasement but my money back.  So now I have a Fitbit. Which is no way as good as the band, but it work ok, for what it does, and it has not break. So i Microsoft now come with a new training band, will I buy it? Probably not.
  • They actually never had a winner with band 1 or 2.   The design for function was not good.  They needed the nokia "moonraker" I think it was called.  A watch style wearable.   They would have sold many more of that device than the goiter strapped Band monstrosity.
  • The Band was the ugliest wearable available by far. That was a terrible product.
  • Yet consumers loved it no matter what mobile platform they had.
  • Thats why they were left on the shelves all the time.   Come on Neo,  the band was NEVER a sales barnburner.   Hell every fitbit model blew away the band in sales.