Playing the Long Game: Microsoft’s Cortana Strategy Revealed (Premium)

Microsoft plans to evolve its Cortana digital personal assistant from a feature of Windows to an indispensable part of our lives. And while it may seem that Cortana has lost ground to Amazon Alexa, Google Assistant, or even Apple Siri, the software giant may in fact win out in the end.

The key to this strategy is Microsoft's focus on productivity---a key strength and platform differentiator---and a partner-led long game approach that will result in Cortana integration in an incredibly broad array of devices and usage scenarios.

Amazingly, Microsoft's experience in the smartphone market has also informed how it is proceeding with Cortana.

More on that in a moment. For now, consider how Cortana has evolved already.

Today, of course, Cortana is most broadly available on Windows 10 PCs. But Windows 10 Mobile, Xbox One, and Android and iPhone users also have access to Cortana as well, though the capabilities vary by platform.

Cortana usage on these device types together account for an addressable market of hundreds of millions of devices. But Microsoft is planning to make Cortana more broadly available in other usage scenarios---in the home, in the car, and so on---and to dramatically improve its feature set.

We've already seen how Microsoft will achieve that latter piece: By opening up Cortana to third party partners. Now, thanks to the "Cortana Unbound" releases in December, partners can build their own Cortana skill sets, making Cortana more intelligent and more useful to users. And thanks to the Cortana SDK, partners can now build their own Cortana-based devices as well.

They are doing so. And while I can't yet report on the full slate of Cortana in-car and in-home systems that Microsoft's partners have planned for 2017, it's going to be quite a list. (We'll learn more about the in-car stuff this week when Nissan and other automakers make their announcements; stay tuned. No home devices will be shown at CES officially, though Harmon Kardon is holding secret briefings with select press members.)

For the record, Microsoft has no plans to make its own Cortana speaker or device, I was told this week. And that is exactly why so many partners are interested in Cortana: They won't ever need to compete with Microsoft, and worry that its own devices might have some unfair advantage. Alone among digital personal assistants, Cortana is the open option.

Improving Cortana's capabilities is as great as it is obvious, and we see other assistants, in particular Alexa, improving regularly as well. But Microsoft's ongoing focus on productivity, and its years-long experience dealing with enterprise data and big systems integration, gives it an upper hand in building a scalable, trusted solution for the future.

"Doing this right takes a long time," Microsoft's Ryan Gavin told me during a briefing this week. "And the natural language interactions you have with Cortana have to just work; we can't expect users to adapt. That is what ...

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