Microsoft’s Dumbest And Smartest Moves Of 2011

The past year was one of highs and lows for the world’s biggest software company. Here are seven reasons why.

Microsoft’s struggle to adapt to a computing market in which the PC is taking a back seat to tablets and smartphones is well known, and much of the company’s troubles of late have arisen directly from that market shift. But don’t count Redmond out just yet–it had some solid wins in 2011. There were also a number of clunkers. Here’s a look at 7 of Microsoft’s dumbest and smartest moves of the past year.

1. Skype buy (Smart). Microsoft announced in May that it had reached a deal to acquire Skype for $8.5 billion. Why was that smart? Skype’s VoiP tools and services will add simple, widely-used video chat features to a whole host of Microsoft’s products, including Office and Office 365, Windows Phone, and Xbox, and, in the future, Windows 8 tablets. That could give Microsoft a leg up on rivals like Google and Apple that, going forward, might even have to pay Redmond for the right to use Skype on some of their platforms.

2. Still no tablets (Dumb). If the current holiday shopping season has proven anything, it’s that 2011 is the year of the tablet. Market data shows that the hottest gifts under the tree this year will be touch-powered slates from the likes of Apple, Android OEMs, and Amazon and its Kindle Fire. As for Microsoft? It’s still talking about tablets in the future tense. The company’s tablet strategy is closely linked to the touch-friendly Windows 8, which may not see daylight until late next year or even until 2013. By then it may be too late to the party.

3. Kinect for Windows (Smart). With PCs taking a backseat to tablets and smartphones, Microsoft needs to find a way to reinvigorate its core Windows franchise. It may have just the thing in tools that will allow developers to port Kinect apps from the Xbox to the PC. Kinect on Windows machines promises a number of new applications, from entertainment to manufacturing to healthcare. Some developers at the University of Washington are already using the technology to create systems that will allow physicians to operate miniaturized surgical equipment through hand gestures.

4. Killed Zune (Smart and Dumb). Microsoft officially put its long suffering Zune franchise out of its misery in October. That was smart because Zune had become an also ran in the MP3 music player category, and as a brand did not fit with Microsoft’s new mobile strategy, which is based around Windows Phone 7. The dumb part? That it took so long–Zune has been on life support for years and should have been scrapped long ago.

5. Office 365 launch (Smart). With cities like Los Angeles and Washington, D.C. moving their desktops to Google Apps, Microsoft needed to respond to its rival’s cloud-based offerings. It did so with Office 365, which launched in June. Office 365 features cloud-based versions of familiar Microsoft productivity and communications tools. It includes access to Office Professional Plus, Exchange Online, SharePoint Online, Lync Online, and Office Web Apps.   Plans start at $6 per user, per month, making the offering competitive with Google’s Google Apps service, which includes online email, productivity apps, and calendaring starting at $5 per user, per month. Key Office 365 customer wins to date include Hendrick Automotive Group.

6. Billions To Nokia (Dumb). Microsoft and Nokia earlier this year struck a deal under which the Finnish handset maker will ditch Symbian and use Windows Phone as the default OS on virtually all its mobile devices. On the surface, it’s a good deal for Microsoft, given that Nokia still ships more phones worldwide than any other manufacturer. But it turns out that Microsoft will actually pay Nokia billions of dollars to use Windows Phone. Don’t OEMs usually pay for the right to use software, not the other way around?

7. SUSE Linux deal (Smart). Microsoft in July announced that it would extend an agreement under which it purchases “certificates” for SUSE Linux support and services and resells them at a markup to Windows customers that operate in hybrid environments. Microsoft, which claims Linux violates its patents, also pledges not to sue certificate holders for infringement. The arrangement allows the company to profit from its claims on Linux without angering customers.

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System Solutions and Integration

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