Redmond Review

At Build Conference, Microsoft Presents a Portfolio Play

Microsoft's real value proposition is that it has a super-franchise made up of smaller constituent franchises.

• By Andrew J. Brust
• 07/07/2013

At Microsoft's Build conference in San Francisco at the end of June, the software giant presented a report of its successes, coverage of its new initiatives and a rally cry to its followers to get behind them. In aggregate, the news and announcements were impressive. But given Microsoft's struggles in the market of late, how can that be? A clear understanding of the all this can help developers decide how much to invest in the Microsoft platform, so let's run through the Build story and analyze it.

On Build's Day 1 keynote, Steve Ballmer emceed, and Microsoft trumpeted Windows 8.1, announced the immediate availability of its release preview, and provided glimpses of Visual Studio 2013 and the evolution of Bing into a full-scale developer platform. On Day 2, Server and Tools Business (STB) President Satya Nadella anchored the show. Attendees were briefed on the new "one ASP.NET" that allows mixing and matching of Web Forms, MVC and the Web API into a single Web Application project, and saw how Azure and Office 365 applications could be built with Visual Studio LightSwitch.

Speaking of Azure, Microsoft showed the cloud platform's new auto-scaling management layer and a new cloud incarnation of BizTalk, known as BizTalk Services. Previews of both were launched at Build; meanwhile, Redmond announced that Azure Web Sites and Azure Mobile Services were graduating to general availability from their preview releases. Microsoft reported big numbers for Azure, too: 8.5 trillion storage objects, 900,000 storage transactions processed per second, and 250,000 customers on the platform, with 1,000 new ones added every day.

Is There a Catch?
But how can we square all this good news with market realities? After all, Bing lives in the shadow of Google. In the mobile arena, Windows Phone and Windows 8 trail Apple's iOS and Google's Android. Azure seems as if it's forever trying to catch up to Amazon Web Services. The .NET Framework, though undeniably established and successful, is still at times an underdog to Java. ASP.NET finds itself challenged by newer Web development technologies. SQL Server, which provides Azure's relational database technology, is challenged by NoSQL players, like MongoDB, Cassandra and Couchbase, too.

The traditional PC market is shrinking fast, and Microsoft must radically change if it's to flourish. So how can there be success to report when so many of Microsoft's individual offerings are under duress?

I think the answer was revealed during Nadella's general presentation. Nadella said Microsoft's cloud platform is battle tested because of the number and diversity of "first party" applications that must run on it. Be it Bing, the Xbox Live platform, Office Web Apps, Outlook.com, SkyDrive, or Skype (which is migrating to Azure now), Microsoft's cloud must withstand the needs of some of the most highly-trafficked services on the Internet.

In other words, Redmond boosts products in its portfolio with other products in its portfolio. SkyDrive supports Azure. And ASP.NET adds value to it. The tooling in Visual Studio makes it much easier to develop for Windows 8, Windows Phone, Azure and SharePoint on Office 365. Bing supports, and is supported by, Windows, Xbox and .NET developers. Azure even breathes new life into BizTalk (and eliminates its installation burdens).

Unified Front
Microsoft faces a diversity of competition, but it also delivers a diversity of products and platforms. That portfolio is so vast that it really forms an economy in itself. My guess is that Azure's storage and transaction numbers are so big because of the services it provides to other groups at Microsoft. This provides a critical mass for new products that might otherwise not succeed.

Essentially, the Build keynotes showed how components in the Microsoft stack tie together and provide a strength that few, if any, of the components could muster on their own. It's the same principle that military alliances are built on, even if it suffers from analogous infighting and bureaucracy.

As such, Microsoft's real value proposition is that it has a super-franchise made up of smaller constituent franchises. Evaluate the individual franchises in isolation and you'll overlook the value of the collective offering. While this doesn't clinch things for Microsoft, it's an important insurance policy. Developers may not be weighing this, because it's not necessarily obvious, and Microsoft doesn't explicitly communicate it.

But weigh it they should. The point isn't really that Microsoft technologies are "better together." It's that there's power in numbers, and safety in diversification, both for Redmond, and for developers who use its stack. Build made a good case for this strategy. Now developers need to decide if it's sufficient.