Microsoft’s New World Order – It is Not Just About SaaS
As we enter into 2015, Microsoft is on the verge of recapturing some of the cool factor that they lost nearly a decade ago to the likes of Apple and Google. No longer is the Redmond company looked at as the “Necessary Evil” or “800 Pound Gorilla” but rather a new view of the company has slowly but steadily taking hold. That is a company that provides services, software and solutions that you don’t necessarily have to add the additional costs of hardware to run. Microsoft is full-on running to the Cloud and we as consumers will see the benefits but so will the Enterprise. This run to the Cloud also has forced Microsoft to in many ways completely rethink their income streams. No longer, especially in the consumer space, is the company able by-and-large to charge a flat fee for software. Consumers have become conditioned to the App World and subscriptions and actually Microsoft probably has Apple to thank for that.
But how do you shift a company that has long been charging for software as a one-time license fee to a Software as a Service (SaaS) or Monthly Recurring Revenue (MRR) model without going bankrupt doing it and not alienating your customer base, particularly in the Enterprise? Carefully. Very carefully. The challenge for Microsoft isn’t so much the consumer end of the equation. It is the Enterprise. Corporations large and small have for decades purchased software, installed in on hardware and paid maintenance on that software to keep it up-to-date and to get access to the latest version. Complicating this matter has been Microsoft’s eye watering number of SKUs for what seemingly is the same product. Even the most savvy Enterprise has been caught out by getting incorrect versions of product or, worse, been out of license compliance unbeknownst to them. While a lot of what Microsoft has been driving to the Cloud has been consumer focused, there is also a lot moving there for Enterprises which should also benefit them in the long run.
