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🤔🤔An old titan is awakening again. Microsoft shows its cards.

This week focuses on Microsoft's future following its recent massive acquisition and some historic pa
🤔🤔An old titan is awakening again. Microsoft shows its cards.
By Connected Paths (Riaz Kanani) • Issue #71 • View online
This week focuses on Microsoft’s future following its recent massive acquisition and some historic parallels.
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Seeing parallels
Yahoo announced it is shutting Yahoo Messenger and it highlighted the importance of mobile to messaging and how poorly the very dominant desktop messenger incumbents adapted to it. 
It echoed the switch from command line based operating systems and how the dominant office applications of Lotus 1-2-3 and Wordperfect failed to adapt to the new window based operating systems.
Microsoft obviously led this technology transition and managed to come through a few more transitions before finally stumbling at the rise of mobile.
Now though they are fighting back.
Microsoft returning to its roots
In recent years you’d be forgiven for thinking the backlash since the early 2000s against Microsoft never happened as they have managed to turn the tide back in their favour. 
Nonetheless, the results of that period still haunt them.
As a result of that time in the wilderness, they lost the hearts and minds of developers the world over. 
It meant that their massive investment in Windows mobile could never build momentum as a platform without apps is no platform at all. Even with incentives, developers never stayed to build the ecosystem.
Recently, small things have been added to Windows 10 to make it ever more developer friendly. Not enough I think to really woo Linux or even Mac loving developers back in any significant numbers. It does at least give them table stakes.
Now they are upping their ambitions.
Last week they bought Github, a platform that stores the code for more than 20 million projects across 200 countries and the number one platform globally. It is one of the darlings of the developer world.
This was a big deal for Microsoft. When they bought LinkedIn, it was a rich deal for an already expensively valued company at 7x their annual revenue. 
They bought Github at 30x annual revenue.
Clearly a strategic acquisition as it is unlikely to deliver any sort of financial return. Not so long ago a strategic acquisition like this would not be possible for Microsoft as it would lead to droves and droves of developers leaving the platform removing any strategic benefit.
The positivity around Microsoft means the fallout today should be small. But why do the deal in the first place? After all, the underlying technology that powers Github is open source so anyone could build their own Github.
24m developers. That is why.
Building an audience that large would take a lot of money and an awful lot of time. It is also tightly integrated into a wider developer ecosystem.
In the short term and at best they can influence those developers though only as long as they persuade them they have their best interests at heart. 
Over time this may result in more developers adopting Microsoft’s tools and in turn give more power to Microsoft’s current and future platforms. But that is a difficult thing to get right.
Microsoft needs to get it right though if it wants to remain important in the medium to long term.
Nadella has pushed for a more open Microsoft that develops for all platforms, but a company that cannot fend off competitors is no company at all. 
In the past it has relied on Windows to act as that competitive advantage but that is declining in importance thanks to mobile. For Office to continue its dominance without Windows acting as a barrier to entry, then integrations and a widely adopted ecosystem is critical to maintaining its market dominance.
Likewise, Azure its cloud platform, needs developers to build on it and extend it, if it is to outperform a massively dominant player in Amazon on more than just price.
Finally even longer term, if Microsoft’s augmented and virtual reality ambitions are not to meet the same end as Windows mobile it needs developers.
That’s a lot to ask of one acquisition and a lot of time needed to not push developers away but Microsoft are on a bit of a roll right now and it will not be the only acquisition aimed at winning back developers I suspect.
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Connected Paths (Riaz Kanani)

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