Opinion: Could health and wearables be the saviour of Microsoft?

Introduction and Microsoft Health

The wearables market is hotting up right now, entering a phase of massive growth as "smartwatch" and "fitness band" become terms recognised, and used, by everyday consumers.

Apple has the Apple Watch, set to be released in 2015 as an extension of the iPhone. Motorola has the Moto 360, a sleekly designed circular watch running Android Wear. LG has the clumsily named, but practical, G Watch R, Nike has the FuelBand, and Microsoft has the recently unveiled Microsoft Band, a $199 (around £125, AU$235) fitness band which comes with a set of new, and exciting, cloud services.

Previously, almost every manufacturer of fitness or smartwatch software – aside from Google's Android Wear – has been proprietary and locked into a single manufacturer, leading to a massive array of competing operating systems, all needing a specific device.

Microsoft has seen this problem and devised a solution, creating a cloud-based all-encompassing framework that links a myriad of different products into a single place which can be accessed by a consumer.

Microsoft Health

Just as Apple has done with HealthKit, the software that comes with the Microsoft Band, called Microsoft Health, syncs with various apps and wearables to create a centralised hub for all your health-related data. Unlike HealthKit, Microsoft Health works with a massive range of different health solutions and, most importantly, smartphone operating systems and hardware fitness bands. For the first time, there is a truly universal way to combine health data from different services. And it was created by Microsoft.

As Benedict Evans, an analyst looking at mobile working for the investment firm a16z, noted in his weekly newsletter, Microsoft has "gone for relevancy" over profit, opening up Office for iPad to all customers for free, pledging to bring Office to Android, and generally moving towards a reconnection with everyday customers who have forgotten what Microsoft has to offer.

While the Microsoft Band is no Apple Watch (and, in fairness to Microsoft, neither does it profess to be), for a first-generation piece of hardware it looks good and can only improve over time as consumer feedback is taken into account.

In terms of software, The Verge claimed that it is "zippy and smooth," offering a Windows Phone-style tiled interface, with the Band's 10 different sensors relaying information back to Microsoft Health for analysis later on. While some fitness tracking devices try and offer information on-the-go, the Band is meant to simply be left on your wrist, quietly relaying information and allowing the user to track their progress and, above all else, chart their health.

Conduit company

What is far more interesting than the practical applications of the Band and Health are the implications for Microsoft going forward – one of the 'four horsemen' is suddenly willing to work with the other three, and anybody else who creates software to work with Microsoft. Just as with Windows, and by extension Office, Microsoft is positioning itself as a conduit company, open to all.

Whether this strategy will work in practice is still up for discussion. Apple's strategy of only working with itself works because, well, it's with itself. HealthKit is designed to work with the iPhone and Apple Watch whereas Microsoft is having to work with people who have previously been at odds with the giant.

The muscle that Microsoft could employ to shift the Microsoft Band is enormous, fuelled by revenue for totally unrelated fields. A smaller company, such as Fitbit, doesn't have these kind of resources and so could be looking askew at Microsoft, wondering if any of the monopolising ways of the 1990s version of the company still remain, happy to squeeze out competitors and drive down prices.

Nadella's influence

Luckily for these smaller companies a different CEO is now controlling the company. No longer is Bill Gates – cool, determined and willing to trample over competitors – running Microsoft, instead replaced by Satya Nadella, a man who instructed his executive team to read "Nonviolent Communication," a book about the "improve[ment] of compassionate connection to others."

By all accounts, Nadella is a far more reasonable adversary to companies that are equal to, or smaller than, Microsoft. Of course, actions speak louder than words and there is plenty of evidence to suggest that Nadella plays nice.

On the eve of the Office for iPad announcement, Tim Cook, CEO of Apple, tweeted "Welcome to the #iPad and @AppStore! @satyanadella and Office for iPad" to which Nadella replied "Thanks @tim_cook, excited to bring the magic of @Office to iPad customers." While this could be seen as a PR exercise, the newfound open-mindedness of Microsoft towards Apple – and others – is clearly a by-product of Nadella's style and points to the direction of Microsoft going forward.

The long game

As a company that likes to play the 'long game' – with varying success – Microsoft should be settling down for a battle, except this time the company is actively encouraging others to win alongside them. Instead of needing to crush IBM or Apple as they did in the PC market, Microsoft can now work together with other companies to better their own product. Just as they have done with Windows 10, which has been opened up to one million "helpers" who are feeding back on the product, helping shape the end result.

The above metaphor also leads onto the interesting question of whether the Microsoft Band is a 'tester' device for a fully-fledged smartwatch, to compete with the Moto 360 or Apple Watch. I have written before that Microsoft's entrance into the wearables market would be a defining moment in the company's relentless march towards relevance and, by extension, profits.

While profits may be some way off – Microsoft Health currently carries no monetisation, or obvious path to monetisation – working with a wide range of companies is a good way to earn back relevancy, and leaping upon a quickly growing industry is just how to do this. The smartphone and tablet races are over, and Microsoft lost. But going forward Microsoft appears to be adverse to the same faults, leaving the company stronger and better than ever.

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