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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

December 31, 2012 at 11:22 AM

Microsoft’s 2012: How “epic” was it?

[This story is running in the print edition of The Seattle Times Dec. 31, 2012.]

Microsoft CEO Steve Ballmer has been known to use hyperbolic adjectives, but was he on the mark when he described 2012 as “the most epic in Microsoft history”?

It was the year, after all, in which the company launched Windows 8, a radical revamp of its flagship operating system.

It was also a year when Microsoft launched or previewed new versions of nearly all its products and services; debuted its first branded computing device, the Surface tablet; and announced it was moving from focusing almost primarily on software toward becoming a devices-and-services company.

So how epic did 2012 turn out to be?

“There’s a term in aviation: V1. It’s when an aircraft has reached a velocity at which it has to take off,” said Wes Miller, an analyst at independent research firm Directions on Microsoft.

This year, Microsoft’s efforts were all about achieving V1.

And now, “we’re heading toward cruising altitude but we don’t know how long that will take or how bumpy it will be,” Miller said.

In the spirit of Windows 8, we look at eight significant events in Microsoft’s 2012 “epic,” “V1” year, and some challenges that experts think the company faces in 2013.

Windows 8 launch

The moment the entire company had been working toward for years came Oct. 26, when Microsoft launched Windows 8 and Windows RT (the version of Windows 8 designed to run on ARM-based chips — primarily mobile devices).

Reports have been mixed on how successful they’ve been so far.

Microsoft said 40 million Windows 8 licenses were sold in its first month, outpacing Windows 7 in upgrades.

While that seems to be a good start, given how much the company spent on marketing, 40 million is “modest at best,” said David Johnson, an analyst at Forrester Research.

Forrester found that interest in Windows 8 among large businesses was higher than expected.

Among consumers, Forrester found that buyers were reporting confusion with Windows 8 and problems with applications not working correctly, though once they got past the initial learning curve, many using Windows 8 on touch-screen devices seem to like it.

Surface launch

Microsoft built much buzz for the late-October launch of Surface, the company’s first branded computing device.

But the buzz didn’t necessarily translate into big sales or exclusively glowing reviews. In fact, the reviews were mixed, with most praising the hardware but, ironically, dinging the software.

Microsoft has not released sales figures for Surface, which initially had been sold just in Microsoft retail stores and online.

The company has since pushed up its schedule to produce more Surface units, selling them now at big-box retailers such as Staples and Best Buy.

Al Hilwa, an analyst with IDC, says he regards Surface as an experiment to help Microsoft’s hardware partners “imagine what Windows devices might look like” and “see how far down this path to go.”

Windows Phone 8 launch

Microsoft launched the latest version of its 2-year-old smartphone platform at an October event designed to showcase how its tiled design and features can make it a very personalized device.

It’s too soon to say, though, whether Windows Phone 8 will finally allow Microsoft to significantly increase its smartphone market share from about 3 percent in the U.S. and 2 percent worldwide.

Early signs show a bit of progress. In the 12 weeks ending Nov. 25, Windows Phone held 5.1 percent of global smartphone sales, compared with 1.7 percent this time last year, according to Kantar Worldpanel ComTech. In the U.S., it held 2.7 percent this year compared with 2.1 percent last year.

Will Stofega, an analyst with IDC, says he understands why Microsoft has been focusing on reaching consumers with its Windows Phone. But he thinks Microsoft needs to start pitching more aggressively to large businesses as well.

Windows Server 2012 launch

Though overshadowed by Windows 8, the launch of Windows Server 2012 is “the hidden gem in the year,” said Michael Cherry, an analyst with Directions on Microsoft.

Cherry calls it “an excellent release, chock full of improvements to the core services including networking, storage, virtualization and management.”

The only downside he sees is a lack of documentation about how to implement the improvements.

[Continue reading the story here.]

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