Why Microsoft "One" (not Xbox One) is going to CRUSH their competitors...

When the history is written, Steve Ballmer will be seen as a Business Genius. While everyone focuses on what the Microsoft CEO failed to do, very few are giving credit to what Ballmer actually did: Consistently grow both top line Revenue and Bottom Line profit for 40 quarters (10 years) all while operating under the Department of Justice "consent decree" REQUIRING the company to operate as "autonomous" divisions so as to not be "broken up."

During that "Consent Decree" decade, Ballmer sealed Microsoft's position in the enterprise and built/bought a whole series of strategic assets (Bing, Tellme, Skype). Now that the company is NO LONGER under the long arm of the DOJ (the consent decree expired 12/31/2012), and now that they are no longer in the Software business (Services and Devices) and, better yet, no longer seen as the powerful monopoly they once were, they are free to INTEGRATE EVERYTHING they own into one massive cohesive solution aka "Microsoft One."

You are already starting to see this happen. Everyone forgets that the reason Microsoft got busted as a monopoly was because they tried to INTEGRATE Internet Explorer into EVERY nook and cranny of the Microsoft experience. It was going to become the de-facto file manager and user interface for all of their applications. When the marketplace found out what they were doing, EVERYONE cried foul and the Clinton Administration DOJ pounced. FYI, David Boies was the attorney for the government.

Now, as of Windows 8.1, Microsoft is INTEGRATING BING into EVERY nook and cranny of the Microsoft experience, and NO ONE is saying anything. And that is just the beginning. You are starting to see Skype for communication getting further integrated into the operating system. As for TellMe, which is the "automated attendant" (think Siri), at most of the Fortune 500, it's just getting started into the operating system.

But what about mobile? The "desktop" pc industry is dying and and new mobile platforms are exploding and everyone see Microsoft as being in third place. What is interesting is that if you type three keywords into your search engine (Microsoft Android Royalties) you will see that EVERY hardware manufacturer who builds android devices (except Motorola) pays Microsoft a royalty. Microsoft makes more money on Android than on Windows phone. Why?

Here's my theory:

Bill Gates is one of the smartest men on the planet (you don't become the richest man in the world by being an idiot). He and Ballmer had to wait out this consent decree before they could pull the trigger on the "Microsoft One" plan they had envisioned in the 90s. During that time, the iPhone reinvented/reignited the phone market with an awesome touch user experience. Google buys Android and gives it away for free, but Microsoft sues for copyright infringement and wins. However, since Google doesn't sell the software, Microsoft can't extract money from them, so they go after the handset makers (and win), hence "Microsoft Android Royalties." The reason the handset makers love Android is mainly because it's "cheaper than Windows Phone." So who controls this situation? Microsoft.

In the near future, Microsoft will continue to INTEGRATE and improve the eco system around Windows 8. Slowly but surely, they will continue to raise the royalties on Android Handsets and either squeeze these players from the market or force them to jump to Windows phone. Since most smartphone users are like my wife (think technically illiterate), they will go with whatever system the phone stores sell them. Right now, Android is the hot product, but that could change overnight. Apple will continue as the luxury platform and will shrink to fit that 20% markethare, but the lower market is still wide open. Nokia, with their 520, is now a serious contender in the other 80% marketshare. As the Microsoft One eco-system takes off this next year 2014, you will start to see some serious traction in both the Enterprise (with Windows Surface Pro tablets) and the consumer space with the Xbox One. Both of these two events with have a "halo effect" for Windows Phone.

The next CEO will only be selected based upon this vision of INTEGRATION. Anyone who thinks otherwise is not paying attention. Even thought Bill Gates is no longer operating Microsoft, he is still calling the shots. He and Ballmer are BEST FRIENDS and they together will ensure that Microsoft will continue to prosper.