Those who've been puzzling over why Microsoft spent $2.5 billion on Minecraft developer Mojang may need to puzzle no more.
Jeff Teper — the “father of SharePoint” and (as of earlier this year) Corporate Vice President of Corporate Strategy at Microsoft — explained the thinking behind Microsoft's Minecraft acquisition quite succinctly during a recent tech conference.
“Minecraft is a development tool,” Teper told attendees of the UBS Global Technology Conference in Sausalito, Calif., last week. “People build worlds out of it. If we can get eight-year-old girls and boys building worlds and getting inspired by creating content digitally, as they grow up they'll want to create in PowerPoint, or Visual Studio. And in addition to being one of the few gaming franchises that doesn't have to be freemium, Minecraft can actually charge money. It turns out it's a great business with lots of upside.”
The full transcript of Teper's remarks from November 19 is worth a read. He provided his two cents on everything from Microsoft's need to redefine mobile, to why he believes Microsoft can't always listen to its customers, especially when it comes to the cloud.
Teper also confirmed that Microsoft is now placing “bigger bets on fewer things” — something CEO Satya Nadella hinted recently when he told some reporters that Microsoft's key investment areas could be pared down to three major buckets: Windows, Office 365 and Azure.
A few other Teper tidbits:
Dual use (in reverse) key to the rebranding of Lync as “Skype for Business”: “Lync business as it transforms to Skype for Business is an enormous business opportunity. Part of the go-to-market for it is going to be that a bunch of people are using Skype free, and they come into the office and they're familiar and they love it. The consumer scenarios have a play in these dual-use applications.”
Unlike HP, Microsoft “bought the right one” (Fast Search) for intra-company search: “In 2008 I said, look, search is just like on the Internet, an intranet search is going to be a big deal and there were three or four companies out there. We bought the right one. HP unfortunately bought the wrong one (Autonomy)…. And the Fast team that we bought in 2008 is still the leader in enterprise search. People may have seen this announcement we made a few months ago about this concept called the Office Graph and this Delve module for Office that lets you, based on all the activity in your organization, it shows you relevant content regardless of where it lives. It's a pretty amazing experience. Satya has sometimes called it Pinterest for documents.”
When it comes to the cloud, don't take your cues from your IT customers: In 2011, Microsoft asked 100 of its Technology Advisor Partner customers whether they planned to move to the cloud in three to five years. Most said no. “That's when it hit me, that sort of innovator's dilemma story, that our customers were going to be a trailing indicator on the market, that the IT people in the room were not going to tell us when the market had turned, they were going to tell us after it turned and we actually — that motivated us to go invest (in the cloud) even faster. We literally after that meeting had to not listen to our customers' right-now discussion….”
If you can't beat them in mobility, redefine mobility: “I think first, we have to redefine mobility is the mobility of the user across all devices and not just necessarily our mobile platform. We have a great mobile platform. We're investing in it. But, I think if somebody has a Windows PC and an iPhone and they love our software, when they go buy their next PC, tablet, phone they're going to say, you know, the new version of Office is amazing, I love it, or the new version of Skype, wow, they've done some unique things on the Surface, on the Lumia phone, let me think about that.
Why “gaming” is still considered part of Microsoft's core: “If you look, video, books, music are not so much of a focus” for Microsoft, unlike Google and Amazon. “But there is one other category that we've called out special which is gaming. We have an incredible franchise in gaming… How does gaming relate? And there are really two things. One is, if you look on PCs and phones people spend an enormous amount of time on gaming. They spend a lot of time on communications and productivity and surfing the web, but gaming is pretty key.”