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 makes the language natural.”

Gavin also differentiated bots, which we see appearing in messaging solutions and other services, and agents. Bots are bound to a service, and you will interact with many of them, potentially. But agents like Cortana are bound to you, and you will most likely only interact with one.

That’s because Cortana is, as promised, a personal digital assistant. To work properly, you need to trust it, and you need to open up to Cortana so that it can learn as much as possible about you.

Once that trust is established, once you trust Cortana to create meetings on your behalf, schedule Uber rides, perform duties for family members only, the relationship changes. At that point, Cortana isn’t just useful. It’s indispensable. If it were taken away, you would really miss it.

“It’s not a numbers game,” Gavin told me when I asked about Alexa’s early lead in this market. “We’re not behind because the scenarios we care about are rich, daily habit scenarios, sticky scenarios that you will really depend on.”

Ryan noted that the available digital personal assistants are all very much a product of their makers: Google Assistant is really good at searching the web. And Alexa is really good at helping you buy things from Amazon.

That’s cute, but with Cortana, Microsoft is shooting for something much deeper. There will be more connected device announcements later in the year, but Microsoft sees a future of automated vehicles that become another workspace.

“Everyone will have their own personal digital assistant,” Ryan told me. And if Microsoft’s plans bear fruit, that digital assistant might actually be Cortana.

We’ll see. But again, there’s more news coming. So stay tuned.