Microsoft in 2010: The Biggest Products and the Biggest Duds update from December 2010

While 2009 saw the launch of Windows 7 and the reestablishment of Microsoft's core product line as the gotta-have-it personal computer operating system, 2010 was no less momentous, with a string of important product launches. Indeed, I'd argue that 2010 was a bigger year for Microsoft for this reason, and that the products it shipped over the past 12 months will have a longer impact on its bottom line and future directions then will Windows 7. But 2010 wasn't all peaches and cream for the software giant: It also killed off a number of duds, like the ill-fated KIN and Windows Essentials Business Server, and blew it in some key product areas. Let's take a look back at a pivotal year.

Windows Phone 7

No product has bigger or longer-term implications for Microsoft than Windows Phone 7, a complete remaking of the software giant's mobile platform. Windows Phone 7 is a chance to start over, both technologically and from a user experience perspective, and if Microsoft is smart--and I have evidence to the contrary, unfortunately--it will use this platform as the basis for its tablet and even desktop PC efforts going forward as well.

Windows Phone 7 isn't perfect, but then no 1.0 software ever is. The key for this platform going forward is a steady series of updates aimed at fixing problems in the current version and adding new features and functionality. In a market crowded with high-quality and well-selling competition--the iPhone and Android--Microsoft can't afford to sit still. But in 2010, it accomplished something that even its biggest critics have to begrudgingly acknowledge: Windows Phone isn't just good, it's excellent, and it's a great foundation for the future. Best of all, it features some user experience innovations that the competition will feel compelled to copy. Cupertino, start your photocopiers. Again.

Office 2010

Microsoft Office is so ubiquitous that I almost forget that a major new version of the software was released in 2010. Part of the reason for this is that where Office 2007 was quite revolutionary--Luddites are still chafing at the ribbon user interface, despite its proven benefits--Office 2010 is more evolutionary. It offers a fine-tuned version of that ribbon UI, and one that is applied consistently across all of the Office family clients, web services, and servers. Its core tools are mature and polished, and "just work" in ways that we've become unaccustomed to in this age of rapid-release, almost always in beta web services. And while there are free alternatives available on the desktop and in the web, there's a reason Office is still number one: It's awesome. Heck, it's not even close.

The big news in 2010, of course, was the Office Web Apps, which immediately made such competitors as Google Docs look comical by comparison. But OWA is just a piece of a broader puzzle, with the ultimate goal being the ability to read and edit Office documents anywhere, at any time. With this release, for the first time, Microsoft is offering a true tiered experience that works across the PC, the web, and smart phones.

Looking ahead, Microsoft will consolidate its Office brand and many previously-separate online services into a new core product line for the future called Office 365. My initial opinion of this service is quite favorable, and I think Microsoft's decades-long experience with desktop and mobile clients, servers, and services is going to pay off in a big way in 2011.

Xbox 360 S

When Microsoft released the first Xbox 360 in 2005, it was way ahead of its time, offering multi-core processing, HD graphics, and surround sound in a package that looked like it could have come from Apple. There was just one problem: The console was indeed way ahead of its time, and ended up being the most costly failures in consumer electronics history, thanks to endemic hardware failures which might have affected up to half of all consoles ever made.

Clearly, some retooling was necessary, and while Microsoft quietly released numerous fixes to its first generation Xbox 360 over the years, it wasn't until 2010 that the company delivered a completely new version, the Xbox 360 S, in 2010.

The Xbox 360 S is the real deal, and it puts Microsoft's current generation console on equal footing with the Sony PlayStation 3, prepping it for another several years in the market. It is quieter, smaller, better-looking, and far more reliable than its predecessor. It's so quiet, in fact, that it can be used in the living room alongside other silent and near-silent devices in a home theater set-up. Virtually everything about the new Xbox 360 S is well-done, and the only question I have is why it took so long. But no matter. With this console, Microsoft is nicely positioned for the future. Say what you will about the initial console--and, no joke, I've had 9 of them die on me--but the Xbox 360 S is maybe the finest piece of hardware Microsoft has ever made.

Kinect for Xbox 360

In tandem with the new console, Microsoft also has another ace up its sleeve for extending the life of the Xbox 360: It's the Kinect motion sensor add-on, which (belatedly) makes the Nintendo Wii completely obsolete. Unlike Sony's Move controller for the PS3, however, the Kinect isn't a Wii rip-off. Instead, Microsoft is again providing a solution that is far more technologically advanced than that of the competition. Where Wii and Move require you to interact with a controller or two, Kinect does not. Instead, it is a full-blown motion sensing and voice control system in which you, the player, literally becomes the controller. You can run around, jump, flagellate your arms, or whatever, and those actions will be repeated by your on-screen avatar.

Kinect is an eye-opener, and while there are some questions about whether it will suffer from the same usage cycle as the Wii--an initial blush of excitement followed by abject disinterest--there is no doubt that the technology here will have far-reaching ramifications at Microsoft. I've been told that the motion sensing technology in Kinect will make its way to the PC in Windows 8, for example. This is a technology to watch out for in the future.

Windows Live Essentials 2011

One of the problems with the three-year Windows release cycle is that Microsoft has two years of "momentum" work between each release. With Windows 7, at least, the news is mostly good because the software is selling so well. But Microsoft understands that it needs to keep the updates coming, and improve the core features of the OS between releases. And one of the ways in which it can do that is through a compelling and useful software suite that's part of the Windows Live set of products and services. The latest version, Windows Live Essentials 2011, is the best yet.

Windows Live Essentials provides a number of useful applications, including Windows Live Messenger (instant messaging with text, audio, and video chatting capabilities), Mail, Photo Gallery, Movie Maker, Mesh (PC-to-PC sync), Writer (blog posting), and more. As Microsoft notes, this suite "lights up" or "completes" the Windows 7 experience, adding capabilities that arguably should be included in the base OS.

The irony of Windows Live Essentials, of course, is that this suite only exists because of antitrust-related product bundling complaints in the US and EU. But the benefits to Windows users are quite real: Because the Windows Live Essentials applications have been detached from Windows and its monolithic release schedule, they can be updated far more frequently than would be the case if they were bundled in Windows. And because virtually all PC makers include this suite with their products, most consumers never even realize that the applications aren't really part of Windows anymore.

The New Hotmail

With almost 400 million users, Microsoft's Hotmail service is both the most popular web-based email services on earth and one of the most-often-used online services there is. After years of mostly evolutionary updates over a long time period, Microsoft has put the pedal to the floor in recent years and has begun updating this service more rapidly, both to attract new users and to prevent current customers from fleeing to cooler services like Gmail. This effort has paid off: The new version of Hotmail is the best yet, offering important user interface changes and optimizations, a truly useful online calendar, mobile device integration including Exchange ActiveSync (EAS) support, and new organization and communication capabilities.

What's most interesting about Hotmail, arguably, is that Microsoft has turned it into a platform of sorts that third party services can target, adding unique capabilities that allow its users to get more work done from within email messages, without having to leave the mail interface and browse around the web. The key to this functionality is a feature called Active Views, where supported online services like You Tube, Hulu, Flickr, and many others can provide active content directly inside of email messages. So if you send a video link or photo slideshow to a Hotmail user, chances are they can enjoy that content right there in the email message.

Microsoft expanded the number of Active Views partners throughout 2010, and more is planned for 2011. But the future of this service, as with any email service, may be an expansion into what Microsoft calls Unified Communications. And the seeds of that work are already in place via integration between Hotmail and the company's Windows Live Messenger service.

Other releases

Microsoft released a number of other important and notable products in 2010, of course. At the top of this list, perhaps, is Microsoft Security Essentials 2, which bolsters the company's already-excellent (and free) anti-malware solution with Windows Firewall integration, a new protection engine, and better performance. Microsoft shipped two useful updates to its Zune PC software in 2010, Zune 4.2 and Zune 4.7, providing compatibility with Windows 7 and Windows Phone 7, respectively, and adding support for new Zune platform features like instant-on HD video streaming. And let's not forget Halo: Reach, which proves, among other things, that its Halo franchise still commands a loyal audience.

Microsoft FAIL: Some notable 2010 duds

Not everything Microsoft touched turned to gold in 2010. It's ill-timed KIN smart phone launch was quickly undermined by Verizon's too-lofty data plan pricing, and the software giant quickly pulled the plug, killing KIN just a few months after it was released.

Microsoft also killed off its ridiculous Windows Essential Business Server product line in 2010, after only a few years and a single product version. Windows EBS was like Small Business Server on steroids, and maybe as with Major League Baseball, perhaps a congressional inquiry is in order here. EBS was too big, too complicated, and served too small of a market. It just didn't make sense.

My most personally-felt loss of 2010 (from a technology perspective of course) was the Drive Extender technology from Windows Home Server: Microsoft killed off Drive Extender, stripping it from the forthcoming products WHS "Vail," Windows Small Business Server Essentials 2011, and Windows Storage Server Essentials 2011. And that's a shame, because Drive Extender was arguably the heart of WHS, at least, and arguably of the other products as well. We'll see what happens to these products in 2011, I guess.

Even though it was prepping Windows Phone 7, Microsoft kept trying to save Windows Mobile 6.5.x throughout early 2010, shipping a variety of updates that seemed almost like mini-apologies for the initial, late 2009 release. But Windows Mobile 6.5.x was a disaster no matter how you slice it, leading me to conclude that after spending "a torturous year trying to embrace Windows Mobile," I couldn't "use or recommend Windows Mobile to anyone, even those people who are firmly in the Microsoft camp." Fortunately, thanks to Windows Phone 7, our mobile nightmare is ending.

Microsoft CEO Steve Ballmer infamously showed off a number of tablet PC designs at the Consumer Electronics Show (CES) in January 2010 and then watched, helplessly, as literally none of those devices ever shipped over the course of the next 12 months. Apple, meanwhile, announced and then delivered its iPad, sold several million units, and established a "new" product category. (Never you mind that Microsoft delivered its first Tablet PC OS in 2002.) But don't worry, Ballmer is ready to announce, again, yet another lineup of tablets for 2011. And some of these will likely make it to market. So we got that going for us.

Because of the relative success of the Xbox 360, I guess, Microsoft pretty much abandoned PC gaming in 2010, leading me to wonder whether PC gaming was effectively dead. The truth is more nuanced than that, but I was intrigued to see the software giant announce in late 2010 that it was, again, "all-in" with PC gaming and would wake up and start supporting this important if neglected market again. The big splash it made? It announced, but did not release, a follow-up to its Flight Simulator franchise, months after firing the entire team that was working on that software. And it announced a new version of the 1990's game classic "Age of Empires" ... that runs on the web. Wah-wah-waaaaaaaah.

The year ahead

Heading into the New Year, I'm excited anew about technology in general, but also about many of the products and technologies that Microsoft has in the pipeline. Key among these are the hardware accelerated and standards-compliant Internet Explorer 9 web browser, the cloud-based PC management suite called Windows InTune, Small Business Server Essentials 2011, Service Pack 1 for Windows 7 and Server 2008 R2, and of course, the Windows 8 Beta, which we can expect by mid-year. In many ways, technology is a treadmill, but it's a wonderful treadmill. And I look forward to seeing what happens next year.