HoloLens Can Thrive Because it Passes the “AACO” Test (Premium)

Don’t understand how Microsoft can make a thriving business out of a niche product like HoloLens? You’re not asking the right questions.

While I’m still not necessarily comfortable with the new Microsoft, this strange new company led by Satya Nadella, I can at least logically explain what it takes for any product or service the company makes to survive and even thrive in this organization. Indeed, it’s a fairly simple formula. It needs to pass what I call the AACO test.

Which, yes, stands for Accessibility, AI, Cloud, and Open.

With that in mind, consider HoloLens, a product that the old Microsoft would never have released as quickly and in such incomplete form as did Nadella’s Microsoft, if at all. But with four years of experience behind us, and a correspondingly better understanding of the thinking that drives the new Microsoft, HoloLens suddenly makes a lot of sense. Indeed, it has emerged as one of the key new products that the firm has released under Mr. Nadella. Is, in many ways, a key example of his leadership.

That might be confusing to some. Many people point to Microsoft’s release of Office on iPad as the first major signal that things would be different under Nadella. But that is incorrect: Office for iPad was well underway under Steve Ballmer, Microsoft’s previous CEO, and it is just a coincidence of timing that Nadella was the person who introduced the product.

But Nadella latched onto HoloLens very early as CEO, seeing it as the embodiment of the drive and innovation of which Microsoft was capable. This is important on a number of levels, not the least being that Microsoft is only infrequently regarded as an innovator of any kind. But Nadella saw the potential of HoloLens, a product that is both unique and uniquely Microsoft.

Of course, in 2014-2015, we didn’t necessarily know what “uniquely Microsoft” even meant in the context of Satya Nadella. Today, that is far clearer. Microsoft is a company that has turned its back on the Windows-centric “embrace and extend” strategies of the past and is now far more open, transparent, diverse, and inclusive. I joke about this, but Microsoft really has replaced “embrace and extend” with “embrace.”

Despite my personal discomfort at some of the changes he’s instituted, the one thing I really do like about Nadella’s Microsoft is its decisiveness. It requires businesses to internally justify their existence. And it has shown little remorse for those that cannot.

For example, Nadella and his Senior Leadership Team (SLT) quickly killed off Surface mini, despite the fact that it had already begun manufacturing, a bold step that many new CEOs would never have made. And he killed off Windows Phone, a product that the old Microsoft would have kept floundering uncertainly in the market for many more years, a decisive and expensive move that better positioned it for the future. Both of these products were failures, and Nadella moved quickl...