Microsoft's riskiest (and most exciting) investments in the future

Satya Nadella
Satya Nadella (Image credit: Daniel Rubino / Windows Central)

Lack of vision and commitment have been blamed for Microsoft missing tech revolutions, like smartphones and smart speakers. Abandoning Groove Music, its Zune MP3 player, and changing course on its digital assistant Cortana may be symptomatic of the same.

Microsoft's current direction suggests that it has learned, to some extent, from these mistakes. Though it hasn't returned to markets it lost (or is losing), its current investments reveal a forward-looking perspective that sees future computing shaped by technologies that are currently in their infancy.

Via a comprehensive platform approach, Microsoft is building the foundation, infrastructure, and tools for a personal computing reality that it believes will not revolve around a single device. This computing "system," Microsoft believes, will run on the cloud, be shaped by ubiquitous computing, be comprised of the Internet of Things (IoT), enable users via 5G-powered edge computing, and support platform-agnostic Progressive Web Apps (PWA), among other things. All or none of this may work in Microsoft's favor but whatever the outcome, this is how Microsoft sees "tomorrow."

These are some of Microsoft investments that represent the most risk, but also in some cases, the most potential.

Azure the world's computer

Microsoft CEO Satya Nadella said Azure, Microsoft's cloud platform, would be the world's computer. From the robust tasks that keep Fortune 500 companies running, to the cloud-based functions consumers rely upon as they use their PCs and smartphones, and the gaming worlds that enthrall gamers and maintains their achievements, Microsoft is positioning Azure as the all-encompassing intelligent cloud.

Ubiquitous computing

Microsoft supports its cloud-computing goals with a strategy to be "everywhere computing is happening." As computing continues evolving beyond "PCs," Microsoft is integrating Windows with iOS and Android via tools like Microsoft Graph, Project Rome, Cortana and Your Phone. It's also inundating these platforms with Microsoft apps. By making development tools like .NET, GitHub and more a part of a cross-platform development strategy, Microsoft integrates its tools into the very fabric of cross-platform computing experiences. Additionally, a collaboration between Microsoft and Amazon brought Cortana to the Amazon Echo in Microsoft's bid for the ambient computing space.


Image credit: Microsoft

Image credit: Microsoft

Microsoft's investments in the billions of IoT devices expected to be connected in the coming years are part of its cloud and ubiquitous computing goals. These devices include factory machinery, intelligent cameras, connected cars, wearable tech, smartphones, PCs,and much more. The theory is IoT will exist all around us supported by an intelligent cloud potentially enabling multi-sense IoT devices to "perceive" and respond to human activity (ambient computing) via Cognitive Services (opens in new tab). IoT will, from Microsoft's perspective, be the all-encompassing portal to Azure.

Edge computing and 5G

Edge computing, via initiatives like Microsoft Azure Sphere (opens in new tab), is represented by the cloud-connected devices that are closest to the user. This can be an industrial drone or a mobile device. Edge computing allows complex tasks that normally occur in the cloud, due to processing power needs, to be moved to edge devices. 5G is expected to increase processing capacities on current and future edge devices like Microsoft's rumored Surface Andromeda pocket PC.

ACPCs and PWAs

Microsoft partnered with Google in a desperate attempt to mainstream PWAs to usurp the current app model. PWAs promise of "the best of the web and benefits of apps" is potentially an ideal fit for an always-connected cloud computing world. Windows-powered Always-Connected PCs (ACPCs), like the HP Envy x2, and a potential future Surface Andromeda device have much to gain from Microsoft's PWA investments.

Augmented and virtual reality

Microsoft's HoloLens 2, an untethered wearable Windows 10 augmented reality (AR) computer, is expected to be lighter, harbor on-device AI, and have a wider field of view than version one. Microsoft's long-term vision is a wearable with lenses that transition from clear for AR to opaque for VR. Windows Insider chief Dona Sarkar and HoloLens creator Alex Kipman believe these smartglasses will eventually replace smartphones.

Cloud gaming

Gaming across Windows and Xbox is paramount to Microsoft. And Microsoft and AMD are expanding gaming to a hybrid cloud-device experience. Of AMD's part, CEO Lisa Su said:

We're making decisions now [regarding semiconductors] that you won't see the outcome for 3, 4, 5 years ... we're trying to predict the future and hopefully we make some good decisions.

Quantum computing

Microsoft is slowly building a quantum computing platform that others can use to solve many of the world's problems. Traditional computers use sequences of bits, 0s or 1s, to process data. Quantum computers use qubits which can be both a 0 and a 1, in a phenomenon called superposition, to do the same. Thus, quantum computers can quickly process data traditional computers would require years to process. However, Microsoft is years away from reaching its goal.

Wrapping up ...

Microsoft may not be building a smartphone, investing in a consumer-focused digital assistant, or pushing advanced HoloLens AR tech to consumers, but the company is investing in the future. Only time will tell if those bets will pay off. But whether you agree or disagree with its direction, Microsoft is trying hard not to miss whatever comes next.

Jason L Ward is a columnist at Windows Central. He provides unique big picture analysis of the complex world of Microsoft. Jason takes the small clues and gives you an insightful big picture perspective through storytelling that you won't find *anywhere* else. Seriously, this dude thinks outside the box. Follow him on Twitter at @JLTechWord. He's doing the "write" thing!

  • "Quantum computing"
    This :)
  • I always find it funny how msft has those grandiose plans, yet unable to reliably deliver such fundamental things like touch keyboard... Good luck I suppose, I believe it when I see it.
  • Yes, it took way too long, but what you may have missed in all the updates over the last couple of years is that they actually added a pretty decent touch keyboard complete with WordFlow / SwiftKey swiping ability that makes on-screen touch keyboard use a whole lot easier and a more natural transition from using the same typing method on a phone. With each of the last few major builds, they've only improved on it. Heck, they even added native eye tracking so you could do swipe typing with just your eyes, which works remarkably well out of the box with even the cheapest of eye trackers.
  • Ha! They still can’t implement a UX that adopts to the device it’s on. Yes, yes... “it’s coming”... We shall see. I’d agree with YeahRrright, the touch keyboard is “okay” - it still suffers from serious lag when doing anything more than a sentence or two. By the way, their Windows Hello works maybe 1/3 of the time (SP4, SGo).
  • Unlike their competition, of course, who are still using rows and columns of static icons? Give them credit for at least trying to shift in a direction. A Mac today looks remarkably like a Mac in 1984.
  • Microsoft attempted to use square icons and severely gimped widgets while Android had icons and fully featured widgets. Removing all functionality from a widget doesn't make it innovative or different. It is still just a widget, a widget with minimal utility.
  • For a year the touch keyboard was awful. Ever since they redone it in XAML it was unusable. Only in the October update it will get better. That means it took them 2 feature updates to remedy the damage they did. This just shows me the lack of thought and planning. And if they can't accomplish this relatively easy task of making a decent keyboard, I don't see how they can make those grand plans come to fruition.
  • The thing with Microsoft is that we are always talking about the future year after year, but it never seems to materialized. What are they doing today? Nothing. Meanwhile everyone else is releasing stuff left and right for the upcoming shopping season.
  • The future isn't "the upcoming shopping season".
  • Dave47, Tomorrow never comes, remember that. As for the future, ever since I have been here, everyone has been touting the future, future future. Guess what, At some point you have to step up and prove ****. Until then its all yapping. Nothing more.
  • I've been hearing about the future since WP7 came out. Other than the Surface line which is superb, I haven't seeing anything consumer ready..
  • The Surface line is basically just laptops. Low hanging fruit.
  • Except these laptops are also tablets which can install Bluestacks and get the best of both worlds (iOS+Android and Windows) on same device.
  • Gabriel, do you have a surface device?
  • Since when does Bluestacks run anything iOS? AFAIK it’s just an Android emulator.
  • Pulling the keyboard off a laptop doesn't make it a tablet.
  • The iPad still can function as a computer just fine. The touch apps are still relevant and work the same with easier typing and no maintenance. That doesn't work in the other direction. When you remove the keyboard from a Windows device, the apps are now severely gimped. There are very few touch apps (basically none), and legacy apps are useless without a keyboard and mouse.
  • Yeah sure. You keep barking the same crap about bluestacks, a half baked solution to have some touch friendly apps on a mediocre touch system. Repeating yourself won't solve anything. It will just prove how pathetic you are.
  • well, technically if its upcoming, yes it is the future
  • I believe Xbox learned that lesson with the Xbox one launch and now the transition to one x and how that was handled. Phil also has a seat at the table with panos. Let's see what next year brings....
  • The 3rd most valuable company is doing nothing? Right...
  • What are they doing? Besides delivering half baked wincrap updates and continuing the same GarbageAsService model?
  • So and what are you doing apart from p#ss@ng vinegar? Where are you in the fortune 500? What is your market cap? So apparently they must be doing something right @ MS despite the fact that they are not meeting your status of sheer genius. You will disappear in oblivion not even change a stone in the river my friend drown in your own vinegar.....
  • What are they doing today? Brought Win10+UWP to Xbox thus BC, FC, XPA and GamePass happened.
    * free unlimited storage cross-platform cloud save is good feature to have too.
    Mixer and MsStore integration so streamer can sell stuff, Mixer and XPA game's API integration, co-stream and other unique features, meaning? Fan building and new business model. Uncharted, Zelda, COD, BF, drone, arcade cabinet, ATM, surveillance camera, Sphero's next robot, water meter, Azure cashier, vending machines, Singapore's smart city project, Australia's agriculture, ZPMC, Nike, organ visualization with Hololens, etc are using MS's dev tools, middleware, business solutions or OS. I suppose, building synergies between their products is what MS are doing today.
  • The future is a reality. Things do change. Not always at the speed of "the next shopping season" as Dave47 so aptly replied.
  • I have been saying for a long time that the multi device cloud experience is the way to go, BUT and it is a big but, without a smaller pocketable device it becomes very much harder and harder in the future to keep people on board. For example I have my MS account, each device (950XL, SP4, Xbox One X) has Skype installed, I can make calls and answer them on any of the devices, doesn't matter where I am. I work about 100 miles from where I live, no problem, I just unplug my SP4 from it's dock and pick up my phone and I am off for 4 days work where I rent a room, but I am still connected, when I am actually working on my motorbike, the SP4 stays in my room and the phone is hooked up to my BT headset. My problem is the first two apps on my phone screen that are sadly missing from my SP4, that of "Phone" and "messaging", my Skype number is ported to my MS account, why can't I port my mobile number, that way I can use my phone's unlimited texts and calls through my MS account and it doesn't matter what device I am using. Wouldn't it be far better than having to take two devices, that I could just pick up one smaller one and dock that when I get to my rented room. I know MS have made great strides in porting all their software to Android and iPhone, but why would I end up buying one of those and use MS stuff if for example Samsung or Apple actually improved some of their business software, if the pocketable device I use is not MS, the chances are MS lose relevance to me, and we have seen this with many of the fans of MS who have drifted away from here in the last couple of years. MS MUST be in the "Mobile" sector, regardelss of if it's called a mobile phone or not, so please MS stop mucking around and develop a small (6.5 to 7in) device, with or without a folding screen (But do make it nearer to 3.2 rather than a slabby looking square lump) and develop a way to link mobile telephony to my MS account (And although I am a Skype subscriber with a Skype number and subscription) please don't stick it through Skype unless you can make it work with the people app and not muck up all my contacts time after time....... And of course, actually make the tablet experience better and finish off on so many of your half finished projects like Continuum, it was so good when it came out and like the rest (Band, Kinect, I could go on, left withering on the vine to die).
  • Yes, it is really disastrous how they managed to screw up MSN Messenger and Skype. But, maybe Teams is the way ahead for this.
  • > without a smaller pocket device
    I don't think that'd be a problem.
    ARM cpu has always been small device friendly. DualScreen device will be a problem because we don't have any application that's designed for DualScreen yet.
    But we use 2 or 3 monitors in the office all the time right? Sure, you can snap 1 window to the upper screen then snap another window to the bottom one but it's different, more like dedicate 3ds games vs lousy single screen game ports. ARROWS Tab V567/P + snapdragon 1k... isn't difficult tbh.
  • The near term future Microsoft needs to worry about is that they need to get back into mobile...period. Their relevance will diminish over time the longer they do not have a small form factor offering or capability. And I mean at the OS level, and not at the application level.
  • Satya Nadella said there were three areas that were the future. 1. Quantum computing
    2. Mixed reality
    3. AI Quantum computing may come. I can't buy a quantum PC yet but never say never. Most likely, in the foreseeable future, the quantum computer will be a cloud service. Mixed reality is not something consumers are using. Not even business. There may be medical or design applications. There may be gamers. However, gamers seem to be opting for the more widely supported Oculus Rift. I don't see Mixed Reality headsets selling in volumes. I do see augmented reality on mobile for kids and education. Leveraging devices people already have. Microsoft had a lead on this on Windowsphone. The City Lens app on Nokia Windowsphone 8.1 devices gave me the chance to use augmented reality tied to mapping and discovery. Now Apple and Google are taking that view of augmented reality and making it work. AI might be an area Microsoft has bet on however at the consumer end Cortana is now in third place. Few people use digital assistants on a PC. Amazon has created a whole space for assistants as personal audio devices in the home. Microsoft isn't even competing there. In the new world of Microsoft, it is letting Amazon tickle its stomach and making Cortana the host for Alexa. It was just a while ago that Microsoft didn't make Windowsphone able to run Android apps because it would negate Windows development. Now it doesn't care if it hoists the white flag to co-habit with Alexa. Cortana is now the junior partner. Microsoft is making a bundle of cash in the cloud. It's primarily a business cloud provider. Windows is little more than it's client to get customers to the cloud and sell subscriptions. For the consumer and tech enthusiast Microsoft is a much less interesting company than Apple and Google because it's boring. For business being boring is good.
  • This article should also mention the advances of neuromorphic circuit architectures which uses biomimetic memristors instead of transistors to power the next decade Intel and Nvidia chips. With these new architecture Microsoft will be able to provide more intelligent humanoid robots that interact with consumers.
  • Yes yes, and those humanoids can eat and drink and fart and take a dump...jeez, what are you smoking man?
  • Mixed Reality has not happened yet. Without spatial mapping (e.g. Kinect for Azure), current MR is just VR.
    We still cannot render a 3d tablet or a cylinder to replace our real-life table or can, or an avatar to replace people standing next to you.
  • Mixed Reality has been happening for YEARS - it’s called Hololens.
  • City lens isn't an AR platform like Google and Apple have today. Android and iOS had City Lens style apps before Windows phones even existed.
  • Isn't Google in all these areas as well...?
  • Android casher, surveillance, drone, robots, smart city projects? Cloud gaming isn't the solution. Running game natively is still the better experience. Cloud gaming is only useful when your device isn't capable enough. Today:
    Play games natively on xb1x @ home.
    Run games natively on old xb1 in the office.
    Run AAA XPA games natively on an Alienware.
    Run computation cheaper XPA games on Surface Pro / Go.
    Stream AAA XPA games on Surface Pro / Go, WoA and even smartphones. 5 years later:
    stream AAA games on old xb1 in the office.
  • Microsoft is making tons of money. So they are doing something right. And it is their cloud effort that is driving the growing FCF. Google makes 80% plus from advertising (their legacy search business). MSFT makes 30% windows, 30% cloud, 30% software. Windows is not growing. But the other two are growing.
  • They were stupid not to at least sell W10M for 1 or 2 more chip cycles. How much could they have really spent $100 MM a year on R&D, they could have frozen W10M and most users would not have cared. Would they have been the best smartphones out there? No. But better than 85% of the junk you find in Android phones.
  • I think the hardware was not windows 10 mobiles issue. It was the gap. If there was no app gap, I would still be using it on my 1020
  • Keep investing a dead OS (It's clear from the start, WM will never gain traction) or bring full Windows to ARM?
  • Steve says it is an app gap. Hirox says it is a dead OS. I still use my 950 and the camera is still competitive. My argument is two-fold. You already spent a ton of money and had everything in place to make incremental improvements to hardware and stabilize the OS (not add new features but stabilize, which they are still doing). You spend boatloads of money to port your services via apps into Android and iOS (Cortana, office, etc...). So why not do the same on W10M via UWP or PWA. I don't think W10M would have gained much market share. But holding 2% or more would at least have provided an option until you were ready for Windows on ARM or Andromeda or OneCore and CShell.
  • Quantum computing isn't for normal people problems. It isn't even for most companies' problems. It's for certain classes of mathematically tough problems that traditional computers take very long to compute. For traditional computing, quantum computing gives us no gains. So it won't change our day-to-day computing. This assumes that quantum computing actually does give us gains with those tough problems - it might not in the end. I'm more interested in the edge/IoT/ubiquitous computing future, which seems to me (layman here!) as the natural course of things. Computing that is as natural as talking to someone or how we normally manipulate and move about the world. Sensors everywhere, and a system that understands all the important connections between it all (and that is hopefully secure!). So basically, Star Trek. But probably an experience even more natural and more integrated than that.
  • Quite possibly Jason’s best ever column.
  • How about make polished awesome software again!?
  • But Windows as a Service!
  • more like Garbage as a Service.
  • I think we can all agree that Microsoft has great product ideas, they will invest the money to develop these ideas. They won't follow through on these ideas either at all or quickly enough before Samsung, Google (Alphabet) or Apple copies their idea and takes all the market share. Microsoft will probably never succeed in the consumer space again outside of Xbox. The sad thing is that they could have if they just supported their own products. I haven't even thought of using Cortana on my Echo devices.
  • Good article. It always looks good on paper. This reminds me of those futurist papers from yesteryears. What life would be like in 2013 written in the 1960s. I doubt MS will do any of those things. They're too busy making money selling the cloud. Even if they did even 1 if those they will abandon it within a year. Edit: it is their job to make shareholders money. Not make consumers happy.
  • like it or not, the two are inter twined
  • Well of course it would look good on paper. Its based on Microsofts marketing speak, which is taken as gospel of truth here and entire article is based on that
  • All of the futuristic stuff is cool.
    One simple question.
    Why can't Microsoft do all this AND make a phone?
  • There are none. They'll end up abandoning it all within a year or two "for the next shiny thing", as the CEO puts it.
  • Love your writing style and use it to show Microsofts vision.
    Great telling
  • Besides my already existing xbox one, I will never buy another device powered by anything MS related. Whatever they try they will fail as always and others will do better. I will not risk my money and time again with MS's junk attempts and abandon-ware. Maybe I will spare a moment of my time to look at them and see what are they up to when a new CEO is in place, one that cares about quality and his customers, not obsessed by costs.
  • Thank you for sharing that information, so no need to keep trolling here. Thank you and Goodbeye.
  • They keep abandoning the things I like!