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Microsoft wants to go back to the '90s
Last week's event shows not just that the company is all-in on AI, but also that it thinks it can dominate the "next big computing platform" like it once did with the desktop PC.
Last week, Microsoft held what was supposed to be a Surface event, but things did not go as expected. The first 40 minutes of the 62-minute event were spent talking about Co-Pilot, the AI assistant Microsoft is building into, well, everything. Then, the company spent 20 minutes talking about two new Surface hardware products, the Surface Laptop Studio 2 and the Surface Laptop Go 3.
There are a few reasons that things didn’t go as expected. First, it seems there just weren’t that many surface products to announce at this point. Microsoft got into the Surface as a product line in order to spur other computer makers to design better PCs that could compete with the Mac.
The other thing that happened was that just days before the event, Panos Panay, who was the head of the Surface division (as well as Windows) abruptly left Microsoft. Bloomberg is reporting that Panay is headed to Amazon to replace outgoing Alexa and Echo product line boss Dave Limp (who CNBC reported on Monday was headed to Blue Origin as CEO).
As a result, most of the event was spent talking not about new hardware devices, but about how Microsoft thinks its AI product will “fundamentally transform our relationship with technology and usher in the new era of personal computing.” That’s how CEO Satya Nadella explained it on stage.
On the one hand, every tech company wants to figure out a way to incorporate AI into its products. For some, there’s a case to be made that whatever flavor of AI a given company has baked into its products makes it more useful to customers. And, for others, AI is just a phrase that gets baked into marketing materials while the company hopes you aren’t paying enough attention to realize it’s all just hype.
In Microsoft’s case, it’s more useful than hype, but the more interesting question isn’t how Microsoft is building AI into its products, but why.
Back to the ‘90s
It’s hard to separate the story of Microsoft from the story of the personal computer, which—generally speaking—has been mostly dominated by one company: Microsoft. Windows was, for a long time, the single most valuable computing platform. It held a literal monopoly on desktop computing.
After a while came the internet and, with it, a huge change. Sure, Microsoft made a web browser, Internet Explorer, and sure, it was once the dominant way of visiting websites, but—for most people—the experience of using the Internet has been largely controlled not by Microsoft, but by a different tech giant: Google.
In so many ways, Google is—for all intents and purposes—the internet. It’s where people look for information, where they get their email, and where every website on the internet looks for the majority of its traffic. Yes, Microsoft has a search engine, Bing, but come on—the only people who use Bing are people who don’t know they can change the default search engine on Edge.
Then, a little over 15 years ago, Steve Jobs stood on a stage and introduced the world to the iPhone. The smartphone, which had until then been mostly an expensive novelty used by businesspeople and sales professionals, became the most personal of computers and again changed the internet.
What Windows was to desktop computing, the iPhone is to mobile computing. Of course, Microsoft never figured out a mobile strategy, mostly because it would have threatened its Windows dominance. As a result, as important as Windows is to desktop computing, iOS on the iPhone is far more important as a platform, at least if you measure by the perceived impact on most people’s lives.
Microsoft’s AI Play
Now, Microsoft is making a play to own what it thinks is as significant a technology as the PC was 40 years ago.
“This is as significant as the PC was to the ‘80s, the web in the ‘90s, mobile in the 2000s, cloud in the 2010s,” said Nadella. “Just like you boot up an operating system to access applications or use a browser to navigate websites, you will involve a Co-Pilot to do all these activities and more.”
It’s certainly understandable that Microsoft would want to go back. Few companies have ever dominated an industry more than Microsoft did with desktop computers in the 1990s. Even Google’s dominance over search (and the internet as a whole, for that matter) isn’t quite comparable. You can still use the internet without Google Search, even if it’s not a great experience.
With AI, Microsoft seems to see an opportunity to sort of bring back the glory days. Nadella alluded to as much during the keynote.
“I started in Microsoft when our mission was to put a PC in every home and every desk,” Nadella said. “Today, we have a vision for a Co-Pilot that can empower every person and every organization on the planet to achieve more.”
What he’s really saying is that when he started at Microsoft, it was the most important company in desktop computing and now he’d like for it to be the most dominant company in AI computing. And, the company might have a shot.
The thing that Microsoft is the best at is convincing companies to pay money for the productivity software their employees use to do their jobs. Millions of people use its productivity software for creating documents, presentations, spreadsheets, email, and collaboration. In every case, there are workflows that are the perfect fit for AI.
Co-Pilot is a great example. Don’t have time to read a report? Co-Pilot can summarize it for you. Need to turn it into a presentation? Again, Co-Pilot will help.
I’ve seen a lot of AI demos over the past 18 months, and the thing is, many of them seem magical, but not particularly useful. What Microsoft is trying to do is make AI a regular part of our work routines.
For example, you can ask Co-Pilot in Windows to turn on dark mode on your laptop. Or, you could ask Co-Pilot in Excel to analyze a data set and give you a summary of how your retail stores are performing compared with your competitors. All of it is very impressive, but more importantly, it’s very useful. And, for Microsoft, that’s the key. For more than a generation, the PC was indispensable for getting work done. Microsoft is trying to do the same thing with AI computing, and it just might work.
“It’s kind of like the ‘90s are back,” said Nadella during the keynote. Microsoft can only hope.
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