Build 2018: Windows, Office Take a Back Seat to Microsoft 365 (Premium)

Microsoft on Monday opened its annual Build conference with an impassioned plea for developers and customers to forget about monolithic legacy platforms like Windows and Office and instead go all-in on its Microsoft 365 service and its other intelligent cloud and intelligent edge efforts.

Some may argue that this is just a subtle repositioning. After all, Microsoft has been talking about its digital transformation to the intelligent cloud and intelligent edge era for the past few years. Too, it was telegraphed by the recent ouster of Terry Myerson and the resulting de-emphasis of Windows within Microsoft.

Fair enough. But I see this as a seismic shift that finally lays bare Microsoft's plans for getting from "here"---its legacy past---to the "there," the future that Microsoft watchers have long predicted.

That is, in the old version of the company that Microsoft is now dismantling, everything was centered around Windows. This made sense: Windows was, for decades, the center of personal computing.

But internally at Microsoft, everything revolved around Windows, too. The software giant built massive software franchises on the back of its Windows successes, products that never could have gained the market traction they enjoyed had it not been for Windows.

That two of them, Windows Server and Office, eventually eclipsed Windows itself from a revenues perspective is interesting in isolation. But given recent events, that shift should now be viewed as our first hint of the once-unthinkable changes that are now underway. And that's because those products were able to undergo their own digital transformations to this current era---into Azure and Microsoft 365, respectively---while Windows was not.

The situation with Windows today reminds me of Apple's "digital hub" strategy, which first centered around the Mac but later evolved to place the cloud, in the form of iCloud in Apple's case, at the center. As part of that shift, the Mac was essentially demoted to being just one of the many devices that synced with iCloud. It was once central, but it became peripheral---if not completely optional---over time.

That's exactly what is happening to Windows.

This amazingly resilient product, which once sat at the center of the Microsoft ecosystem, is now peripheral to the software giant's future. Windows is just a bullet point on a slide describing the high-level features of Microsoft 365. And it is, in many ways, the least important, if not the least interesting, of those features. It's infrastructure. A thing we use to run the apps and services that really matter, both to Microsoft and to its customers.

That's not necessarily all negative, of course. You may recall that one of the primary benefits of Office 365 is that it ensures that all of Microsoft's customers have all of the cloud servers and end-user applications. This is huge for customers. It's huge for developers. And it's huge for Microsoft, because it can now build impro...