Of Home Hub and Microsoft’s Missed Opportunities

What are we to make of rumors that Microsoft will belatedly move its Cortana-based digital assistant technologies into the living room?

I guess it depends on who you ask.

News of something we’re now calling Home Hub first surfaced on Windows Central, which predicted that Microsoft would announce a Cortana-based “smart connected” device at its October Windows 10 event. “According to our sources,” the publication noted, “this device is related to a Windows 10 feature called ‘HomeHub’.”

That never happened, but it’s fair to say that many—me, Brad, many others—had been practically begging Microsoft to enter the market for home-based digital assistants for many months. In the wake of that October event, Brad noted that Microsoft was letting this potentially-important market slip away from it.

“I do worry about the future of Cortana,” he wrote. “Without a meaningful endpoint, the AI assistant lives, but mostly in a forgotten location. Sure, you can get Cortana everywhere, but that’s only if you are willing to side-step the default AI assistant on the popular mobile platforms and on the PC, you have to convince users to talk to their PC instead of using a mouse and keyboard like we have done for the past three decades.”

A week later, the ever-elusive WalkingCat tweeted the following, noting that a coming Windows 10 feature called Family Desktop looked an awful lot like Home Hub. “Apparently Home Hub is a family-oriented feature of Windows 10 PC called ‘Family Desktop’, basically a shared account,” he noted.

A shared account is a far cry from a home-based “smart connected” device, but as Brad wrote that day, “Home Hub allows you and your family to access common tasks without logging in, such as calendars, lists, music and more … this feature actually sounds like Kids Corner that was in Windows Phone.”

That is exactly what it sounds like.

But now Windows Central is claiming that Microsoft will use Home Hub to “crush” Amazon Echo and Google Home.

That’s quite a claim. And while anyone familiar with Microsoft’s non-stop string of consumer defeats would be wise to question it, let’s at least be open to the possibility.

And it boils down to this.

After spending a lot of time re-explaining what WalkingCat already told us—Home Hub is software, not hardware—Windows Central then explains that the central advantage of this solution, the key differentiator with the Echo and Google Home devices, is “a screen.”

“Home Hub is designed to run on Windows 10 PCs, mainly All-In-Ones and 2-in-1’s with touch screens, but can work on any Windows 10 machine,” the publication claims. “Home Hub isn’t a dedicated device — it’s just the software on your PC, no additional hardware required. Adding a screen to these smart devices makes these things so much more approachable and useful, especially to families.”

So let’s stop right there. The key advantage of Home Hub, according to this site … is that it’s software. And like all other Windows 10 software, it uses your PC’s screen.

Redmond, we have a problem.

One reason the Amazon Echo has succeeded is that it’s not software. It’s an appliance that gets smarter with the addition of cloud-based capabilities that do not require local updates.

Another reason the Amazon Echo has succeeded is that it doesn’t have a screen. The device is personal in nature, and has simple conversations with the user in plain English. It has captured a small but dedicated and enthusiastic market of users precisely for the same reason that smartphones and tablets have been so successful so quickly: It’s more personal, and simpler, than any PC. Even one you can touch.

Put another way, one reason the Amazon Echo has succeeded is that it’s not a PC. PCs are complex, and expensive, and have no place in the home beyond a home office, where individuals go to get work done. No, not pedantically, or literally. But realistically, for most people.

And this is something that is always going to dog Microsoft when it comes to consumers. The size of the PC market looks good on paper—1.5 billion and holding strong—but it’s actually very small when it comes to engaged users. That is, because PCs are mostly used for work now, few people have an emotional connection with that device.

And I think I can pretty accurately state the actual size of the market of individuals who are, in fact, PC enthusiasts. It’s about 7 million strong, the size of the Windows Insider Program. And while only a portion of that group is likely very active, and some are phone-based, let’s just give the whole number to the enthusiasts column. And if you do the math, you will discover that 7 million is just a small percent of 1.5 billion. But the important number, really, is 7 million.

By comparison, there are over 2 billion smartphone users in the world, and I think we can all agree that these users are generally much more engaged than are PC users, given the nature of these devices. The percentage of “engaged” users is of course unclear, but even if it’s a small percentage—20 percent?—it will always be much, much bigger than the market for PCs. This explains why Google Now, Siri, and Cortana all started on the smartphone.

But let’s compare that 7 million number to something a bit closer to home, or at least Redmond. When we look at Microsoft’s various brands and products, we see only one that hits on both size and engagement with consumers, and that’s Xbox. And the latest Xbox console, the Xbox One, has about 20 million users at last count. It will likely see a nice bump this year, so maybe 25-28 million by the end of the holiday season. But even at 20 million, that audience is about three times the size of the market for people who are Windows—and thus PC—enthusiasts.

And here we see the real problem underlying Microsoft’s Windows phone defeat. By failing in smartphones, Microsoft now has a narrower path for getting its next-generation technologies out to users. It quickly moved Cortana to Windows 10 PCs because it could, and because that is the one place where this technology would theoretically see success. But even with 400 million users, Windows 10 hasn’t helped Cortana any more than it’s helped UWP apps, digital ink, or even multi-touch.

Brad touched on this previously.

“When I asked users on Twitter, who are likely more engaged with Windows 10 than the typical consumer, the response was low voice utilization with Cortana on the desktop,” he wrote. Exactly. PC users have low engagement overall. And even among the enthusiast audience that follows Brad on Twitter and reads this site, Cortana has low engagement too.

I’ve tried to lay this out in the most logical fashion possible. But I write this knowing that some will see negativity where I see pragmatism and common sense. I guess I can’t help that. But how many times does Microsoft have to fail with consumers before we collectively realize, as a group, that maybe this just isn’t Microsoft’s core strength? That maybe, by half-assing everything it does with consumers, and then by routinely walking away from solutions that are beloved by a small group of very dedicated users, that the software giant isn’t doing itself any favors?

This is a reality-check moment, folks. You’re either going to pretend that yet another “above the lock screen” feature in Windows 10 is going to magically make the PC and whatever that feature is more relevant. Or you’re going to wake up and start thinking about these things a little more logically.

Let’s look at it from a different angle.

Home Hub will be tied to PCs and won’t even arrive until sometime in 2017. Meanwhile, Amazon Echo has been around for over two years, and has effectively sewn up the home digital assistant market. Even Google is struggling here, and this is something they should have nailed given their natural advantages as the search leader. But Google Home came out of the gate with lackluster functionality. You know, like Android TV, Nexus Player, and most of its other home solutions. (Chromecast is a key outlier.)

And then there’s mobile, where Apple Siri—available for over 5 years—and Google Now (Assistant)—available for over 4 years–collectively own the market. Yes, Cortana is available on Android and iOS, too. But who uses an app when you can use built-in functionality? Nobody. Not literally. But almost literally.

So are we really going to believe that the company that couldn’t create a viable mobile platform or push its digital assistant technology into the home is suddenly going to compete with the Echo and with Siri and Google Now/Assistant? Because of an above-the-lock-screen feature for Windows 10 PCs?

Really?

I am of course interested in any feature that’s part of Windows 10—yes, even Bash—and will follow this closely. But to believe that a PC feature will somehow compete effectively with home appliances like Echo or integrated mobile solutions like Siri is a stretch. You do see that. Right?

Please, explain why that’s not the case. Please.

The thing is, for all my attempts at levelheadedness—what others might call negatively—I really do want to believe. But I just don’t see this making any difference at all. And I feel that by ignoring the home market for so long—yes, Microsoft really should have released a Cortana device this past year—the window has already closed.