For the bulk of its existence, Microsoft has been a software company. It has entered the hardware arena fairly recently with devices like phones and tablets (that have largely failed to catch on thanks to heavy competition from the likes of Apple and Google), but most of its money comes from software like Windows and Office.
In light of the company’s recent release of the (mostly unsuccessful) Band wristband wearable, CEO Satya Nadella says:
I also am wearing this Microsoft Band. And the interesting thing about the Band is that it’s actually a sensor framework on my wrist. It has sensors for our hardware tracking, GPS, the ability to do UV light sensing. [There are] a lot of sensors which are all built for this low-energy device that are connecting data, and all that data is moving to the cloud.
Because devices will come and go. The most interesting thing is the data being collected.
This fits with Nadella’s commitment to making Microsoft a mobile-first, cloud-first company. If you make your money from the back-end, the devices customers use to access your software don’t really matter — provided the software is good enough to get people to use it. It seems like a smart strategy, and it will be interesting to see how it plays out in the coming years.