How Microsoft will change forever and thrive again

As PC prospects decline, the tech giant moves toward a hybrid, cross-platform future with opportunities in the server closet and the cloud

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While Microsoft has thus far lagged Apple and Google on mobile, Microsoft would be wise not to let the mobile cart lead the company horse. Yes, mobile tech is king right now, especially as Android and iOS devices eat into PC sales. But those devices are only what they are because of the services they talk to. As the mobile field flattens out and becomes further commodified, Microsoft will be able to better see opportunities to distinguish itself on all sides of the equation: client experiences, service offerings, and infrastructure. Rushing this by forcing the desktop to be more like a mobile device would be a mistake.

Going forward, Microsoft will also have to find a better revenue model for the Surface. Microsoft's other big hardware product, the Xbox, remains a loss leader, but sales of software, auxiliary hardware, and services for the Xbox more than make up for this. The Surface needs a similar ecosystem. Otherwise, Microsoft needs to cut it loose.

RT presents an intriguing opportunity for Microsoft, but if Microsoft is to take RT seriously as a future platform for the company, it must ensure everyone else does, too. This starts with smoothing the path for software makers to port and deploy RT editions of their apps. Microsoft Office on RT isn't bad, but it's missing just enough features (say, macros) to be problematic. We should be able to get 32-bit, 64-bit, and RT-based editions of all our favorite software without feeling like we're missing out. After all, the legacy Win32 world isn't going to die that easily.

Ironic as it may seem, building an open source framework people want to use should also be a key initiative for Microsoft going forward. Microsoft has been accommodating open source products better in their proprietary offerings -- say, Linux in Hyper-V. But it needs to contribute a framework of its own -- a PHP without the cruft or a Ruby without the overhead. TypeScript is a step in the right direction, but there's no question Microsoft can do more if it wants to.

Most of all, if there ever comes a time to stop being a consumer-oriented company, Microsoft shouldn't flinch. A future where Microsoft doesn't make hardware or end-user programs seems remote, but there was a time when IBM abandoning its PC business seemed jarring, too. If the current whispers about Microsoft having a hand in running a revivified Dell are true, it'll be at least as much for Dell to be a supplier of cloud hardware as it will be for Dell's Windows PC market.

In the end, if Microsoft has one thing going for it above all, it would be its drive to continually stake out new territory and competition -- an essential trait to provoke its evolution. Telerik's Sells believes that, for Microsoft, tackling new competition is simply part of its DNA.

"Microsoft goes through phases in its focus based on the competition," Sells says. "When it was WordStar, you heard about Word; when it was Google, you heard about Bing; when it was Sun, you hear about Windows Server; and now that it's Apple, you hear about Windows Phone 8 and Windows 8."

And with VMware, Hyper-V; with Amazon, Azure. And the beat goes on.

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