Situation: Cloudy with a chance of success
Microsoft New Zealand managing director Paul Muckleston tells Chris Gardner how the company’s mobile cloud computing strategy has helped it dominate global sales.
Microsoft New Zealand’s transformation into a business that puts mobile cloud computing first has put it at the top of the world when it comes to sales of Office 365.
Office 365 is an online version of Microsoft’s productivity suite which can be accessed on just about any computing device, regardless of whether it is running Microsoft Windows, Apple or Google’s operating systems. It comes with OneDrive, Microsoft’s virtual hard disk drive app, where files are automatically saved.
‘‘Obviously we are going through a big transformation in that mobile space. We have got the new strategy around the mobile first and cloud first world,’’ Microsoft New Zealand managing director Paul Muckleston said at the technology giant’s annual TechEd New Zealand conference.
Around 2500 software developers attended the four day event last week at Vector Arena and SkyCity in Auckland.
‘‘What we are seeing in New Zealand is Office 365 is a real hit with small businesses. When we look at the data since April this year, New Zealand has been the No 1 market in the world in terms of Office 365 penetration. You look at the total number of small businesses, 150,000, and then you look a the number that have signed up to Office 365 and New Zealand has been top in that for six months. Market share is 15 per cent. There’s something happening in New Zealand in a sweet spot for small businesses.’’
Muckleston says it’s partly down to the number of Office 365 resellers more than tripling from 200 to 680.
It’s also down to the 250-staff presence Microsoft has in New Zealand.
And the fact that Kiwis love to adopt new technology fast.
‘‘If you look at what Apple has done in the market, New Zealand and Australia were one of the top five in terms of adoption for the iPhone and the iPad. If you have a product or service people like, they tend to switch to it quickly and they switch on mass. There’s something in there around the way kiwis gravitate to tech.’’
‘‘If you get Office 365, you get 1TB of storage included in OneDrive.’’
One of the benefits of subscribing to software as a service online, instead of buying software on a disk to install, is that the manufacturer updates it with new features all the time. Like expanding OneDrive’s free storage limit from gigabytes to a whopping 1 TB.
‘‘These cloud services tend to be updated every 90 days,’’ Muckleston said. ‘‘There are new features that just happen. You don’t have to wait three or five years.’’
Since OneDrive is the default saving position for anyone running Microsoft’s latest desktop operating system, Windows 8.1, on their personal computer, its use has climbed.
‘‘Microsoft’s opportunity is to be a leader in the mobile first world,’’ Muckleston said. ‘‘We are talking about these digital work experiences and how you make them more productive. We spent $4.5 billion on data centres as a company last year. There’s a bit of a goldrush on at the moment. A small number of very large players can make the investments Microsoft are making.
‘‘A small number are going to operate these data centres that everybody builds their businesses on. The vision, long term, is Microsoft wants to be a significant provider in that cloud platform.’’
Muckleston talks about being operating system-agnostic when it comes to releasing new software and applications.
New Zealand sells 600,000 personal computers a year, 1.2 million smart phones and half a million tablet computers.
‘‘On one level you want to be able to be more productive,’’ he said.
Another change is apps that work on all the different version of Windows, whether it be the personal computer or smart phone version, and release royalty-free versions to encourage more take up.
‘‘You have seen us take some pretty big decisions. We made Windows royalty-free for 9 inches and below and there are 200 new low cost tablets coming to the world. For the long term it’s more important to have people using your product and then you figure out how to monetise that. Over time that’s where we head for the majority of our products. Some things will be advertisement funded, some paid for.’’
Microsoft’s’s Windows Phone is dominated by the Nokia Lumia but Muckleston said licensing deals had been struck with 10 new manufacturers.
‘‘It’s important for Microsoft to make the market for Windows Phone,’’ he said. ‘‘You will start to see more third parties.’’
A year ago Windows Phone had won 15 per cent of the New Zealand smart phone market, but that has fallen by a third now.
Muckleston said: ‘‘Analysts and product reviewers are giving great feedback on the new devices.’’
Regardless, we are yet to see Microsoft’s digital assistant Cortana on Windows computers and phones when it is working perfectly in the US.
‘‘People are using it but it doesn’t understand the Kiwi accent,’ Muckleston said of the Apple Siri like service.
‘‘It’s very simple. It learns about you. It’s masking a huge amount of complexity behind that. If you look at some of the analysts, they are pretty positive the way it is heading.’’