Two Microsoft: from dilemma to both sides?

Editor's note: This article is written mainly in the context of Ben Thompson's nonblank Microsofts. Ben Thompson, the founder of the Stratechery website, worked for Apple and Microsoft, and wrote a number of articles on strategic aspects of the technology business. Want to read 36 more of Krypton's children's shoes on Ben Thompson can be ordered here.

One thing I've been worried about for Microsoft is that Microsoft seems to have been trying to take care of the development of both horizontal (software services) and vertical (hardware) business. But I don't think any company can do this two-direction business at the same time. The reason for this is that the business objective of the horizontal direction (i.e. the Software service class) should be to perform as well as possible on every device platform, and this is just a violation of the vertical business.

But that changed after Satya Nadella the CEO of Microsoft. His first major operation for Microsoft was to announce a subscription to the ipad version of Office 365, which means that Microsoft has finally put software services on top of hardware devices. While it is not a viable business model to charge users simply by software today, I am glad that Microsoft has taken this step-at least, he has some focus at last.

When Microsoft announced that the ipad version of Office apps no longer needed to subscribe to Office 365 to be free to edit, I was even more shocked: how much better the software service providers do not have the slightest rush to use software to make money?

Over the past few days, Microsoft has shown me the rise of another business model. I think Microsoft is moving in a better direction, but Microsoft is doing too much.

I have said that Microsoft should divide itself into one, so that the software services to develop freely. The meeting at Microsoft's headquarters last week revealed the fact that today's Microsoft is actually two completely different companies. But the dividing line is not hardware and software, but more like enterprise customers on the B side and ordinary users on the C side.

Of course, we have to make it clear that Microsoft now, and for a long time, will rely on traditional windows and office to gain stable returns from corporate customers and individual users, as a result of Microsoft's previous strategic decision. In this article, I will focus on some of the potential opportunities for development today-the strategic decisions that Microsoft can now make that affect the future.

From this perspective, Microsoft's decision to open Office products to iOS and Android free of charge means Microsoft will give up the benefit of C-end paid users. Of course, Microsoft also has the Mac and PC Office 365 this piece of cake, but we all know, mobile will be the trend of future development.

Such a decision is more rational for Microsoft. We can look at the business of both enterprise and ordinary users individually:

For ordinary users on the C side, Microsoft wants to make money with hardware devices and advertising: Microsoft sells to ordinary users surfaces, Lumias, Xboxes, and the different operating systems, hardware, and software services that are above the hardware. They also have advertising-supported services such as Bing and Outlook. For enterprise clients on the B-side, the situation is quite different: Microsoft is focused on software services in this area, especially Azure and Office 365, where enterprise users will need to subscribe to an ipad version of Office Office applications.

Such a arrangement is actually very reasonable: B-end Enterprise customers and C-terminal ordinary users are not only the requirements of the different business model, but also the focus on a completely diverse variety of companies, marketing planning, sales chain and so on. The successful model of Office 365 for enterprise customers is not suitable for ordinary users on the C-side, just as the Xbox sold to users cannot be turned into big business-oriented businesses. From this point of view, Office's free access to iOS and Android is simply too sensible: to lure ordinary users free of charge into the vast biosphere of Microsoft, even if they are just on the verge of office business.

When I think of Microsoft as two completely independent companies, I have only a little anxiety about Microsoft: They're not doing enough right now, they're not doing enough, and they're not doing the perfect thing. In particular, Office mobile end apps are not completely free.

Microsoft has been hesitant and short-sighted in office Mobile applications, and since it has been announced that most of Office features are free, it also means abandoning the office profit model on the ipad, and they don't seem to be able to reluctantly the meat completely. What is the use of the Office ipad version of the lost limit, not only annoying users, but also easy to make people feel that Microsoft is not enough atmosphere, and, more importantly, the overall reform of Microsoft will be a hindrance.

Also, the question I'm more interested in is how long can Microsoft's split state last?

Microsoft has been doing a great job for corporate customers: Windows, office and other services have been raking in money, and Office 365 and Azure are doing well. But Microsoft, which faces ordinary users at the C-end, is completely different: Lumia and surface can't scrape much oil, and the Xbox one is a bit tricky, though Bing's rally is good but far from enough.

But this is not surprising, after all, Microsoft has been so special: Microsoft has been a monopoly on the windows of the C-end users have achieved great success to B Company. On the C-end user side, they have no reason to be more successful than they are now. The only question is whether Satya Nadella has such a determination to change Microsoft.

In any case, the gradual clarity in business models is good news for Microsoft.