Will Microsoft succeed in the Internet of Things?

By Chris Umiastowski on 20 May 2014 12:45 pm

Ever since Steve Ballmer stepped down to make room for Satya Nadella as the new CEO of Microsoft, the company has been loudly talking about its mobile first, cloud first strategy and the Internet of Things (IoT).

I think this change in how Microsoft talks about itself makes sense. After all, the desktop and notebook markets are not growth businesses anymore, and Microsoft is actually shrinking here as Windows loses market share to Apple and now Chrome OS. Google is making great strides pushing into the enterprise with Chromebooks and Chrome OS desktop boxes. I think the days of Microsoft dominating the desktop computer space are numbered.

So what are they to do? Focus on the enterprise. Focus on cloud-hosted app suites like Office 365 powered by their own Azure cloud technology. And of course, build infrastructure for other businesses to power their own cloud-hosted apps on Azure while feeding them great analytics to make business decisions.

The Internet of Things (IoT) is the new way to talking about what Nortel Networks used to call "hyper-connectivity". The idea is that internet-connected devices won't be limited to what we hold in our hands (our devices), but by what those devices connect to. This is a huge market, obviously. Connectedly exists because of this massive trend.

So the question is … can Microsoft do well here? On one end of the argument I'd like to think they can. The cloud has been around for a while but it's still a new thing when it comes to overall penetration into our lives. Microsoft is late to the party (at least marketing-wise), but they are not too late to be huge. But on the other hand, I feel that Microsoft is too disconnected from the mobile side of the equation. And I wonder if they'll never amount to much in the IoT market.

Look at Google and Apple. Together these companies dominate the vast majority of the world market for mobile device operating systems. Microsoft, BlackBerry and any other competing OS represent what a friend of mine calls "a pimple on the ass of progress." They're insignificant on the global scene.

And because the IoT grows based on entrepreneurs developing new products that connect to our mobile devices, these entrepreneurs focus on iOS and Android when it comes to mobile development. Microsoft is an afterthought.

When it comes to cloud-hosting of apps, I can't help but notice that most entrepreneurs tend to model what already works. Startups are much more acquainted with Amazon AWS versus, say, Azure. Discussion sites where coders hang out, like StackOverflow, are far more populated with references to AWS than Azure.

So I'm curious what Microsoft really plans to do here. Maybe they're looking to generate growth in the Internet of Things that operates in the background, not connecting to our mobile devices and not really connected to the consumer market. I can't see Microsoft mattering when it comes to the home or automobile. But I can see them mattering for cloud-based enterprise-focused solutions whether it be security, factory automation, fleet management, or other "things" that don't really matter to the average consumer.

I guess this just highlights how big the IoT market will be. As consumers we'll just see the front end of it. Behind the scenes there will be a whole lot more that remains invisible to us.

What do you think? Will Microsoft be successful here?

Reader comments

Will Microsoft succeed in the Internet of Things?


Microsoft has the power, money and influence to be successful. Using the cloud services to store everything for everyone may start with business as the world gets smaller and business gets even faster. The use of email may totally be replaced by a more all encompassing secure texting service (think BBM). I use the cloud for business all the time and when a customer asks for a specific file, I quickly answer and send it via BBM or what I call the new snail-mail: email.

I totally agree. MS already has a"trojan horse" in the room of over 5 million people. Adding functionality over time is a given. Controlling my home automation setup through Kinect would be a dream. Maybe they roll out Cortana to Windows machines as indicated recently. That would offer a world of possibilities as well.

They simply need the mind share of customers. They totally have me.

It's all a crap shoot at this point. No one knows what's going to happen because IoT isn't big yet. It's starting to get big but isn't mainstream in the least.

When it does get big: more than likely Microsoft will take up a position behind the scenes

The iOt is not important yet. Everyone really considers it as nerdy gadgets. That's exactly why Microsoft should not start now. They have always had bad timing. Either too Advanced for the time (First xbox one policies, so annoying they crushed under the pressure), or too late (mobile). They should wait for the perfect time.

I'd say Microsoft was too early with tablets. Their tablet PCs were a great concept but not practical at the time, mainly due to weight, heat and XP not being the ideal OS for a tablet.

By no means am I a Microsoft (MS) fan or supporter but never count out a corporation as large or weathy as MS.
The market for the " internet of things " is no where near developed yet thus leaving plenty of room for the next key innovation.

Windows 8 is garbage and expensive. Windows mobile is a flop. The only thing that Microsoft really has going for it is the Xbox one and still I think the PS4 is better overall (even though I don't own either one). I can understand Microsoft needing to make something to be able to continue to make money and maybe the backend is the right path for them. I guess only time will tell.