How Microsoft Teams is the new Windows for Microsoft

As Product Managers, we are always on the hunt for innovative strategies to make our Products successful. Platform strategy is one such strategy with a proven track record.

Through this blog post, we will explore the Platform Strategy for Products by looking at the evolution of Microsoft Teams from a productivity app to a productivity platform.

Windows as a Platform in the PC Era

In 1985, Microsoft released Windows 1.0, when the PC era was still in its infancy. The PC market needed a boost, and Microsoft saw an opportunity.

Bill Gates’s vision was to “put a computer on every desk.”

For this vision to become a reality, Windows had to be made to work on a wide variety of hardware, so that the PC manufacturers could install it on their machines. This strategy was a win-win for both parties, resulting in rapid growth for the PC market and the realization of Gates’ vision.

Once customers became familiar with Windows, it was easier for Microsoft to cross-sell its other offerings, such as Microsoft Office, to existing customers.

In summary, Microsoft’s strategy of using Windows as a platform to promote its other products and services was a smart approach that allowed it to sell more to its existing customers.

The Birth of Microsoft Teams

In 2014, Microsoft was considered a declining company, losing its mojo.

Satya Nadella took over as the new CEO, with the vision of empowering every person and organization on the planet to achieve more. This vision led to the implementation of a cloud-first, mobile-first strategy, which required a cultural shift within Microsoft.

You can read the fascinating journey of transformation of Microsoft in the book “Hit Refresh” authored by Satya Nadella.

Microsoft Teams was launched in 2016, enabling collaboration through video calls, chat, and file sharing. It was in the year 2019 when COVID-19 forced people to work from home, the communication apps like Microsoft Teams, Zoom, and Google Meet became household names.

Microsoft Teams has come a long way very quickly since 2019.

Today, Microsoft teams allows you

1. To do Project planning and tracking

2. To Manage your to-do list

3. To Integrate with other Business apps like PowerBI

4. To Create your own apps -e.g. Bots, Automate flows, etc

5. To access 3rd party non-Microsoft apps

apart from allowing you to make video calls, share files, and chat.

Microsoft is adding new features to make Teams more useful but the master stroke has been to allow 3rd party app integration.

From a communication app, Microsoft Teams has evolved into a productivity platform by allowing the integration of third-party apps.

By adding support for third-party apps, Microsoft Teams has become a more useful and versatile tool for users. The growth of Teams is no longer dependent only on features added by Microsoft, the 3rd party apps are boosting it.

It also creates a new revenue stream for Microsoft. Additionally, successful platforms are great entry barriers, as consumers and suppliers become hooked on the platform.

What is the Platform Strategy

The Platform strategy is a go-to-market approach in which the platform connects suppliers and consumers.

Amazon, Facebook, Instagram, and Google Play Store are examples of platforms.

In the app-driven approach, the interaction is between the company and customers. In the platform approach, the company is the platform, enabling the interaction between the consumer and the supplier.

For the Platform strategy to work, it is critical to have a growing consumer or supplier base.

In the case of Microsoft Teams, it has a strong consumer side and is now working on building the supplier side.

Platform strategy doesn’t always work though if you can not balance the 2 sides.

Windows Mobile is an example. Microsoft tried to grow the supplier side (the app developers) by incentivizing them, but it failed because there were too few consumers using the platform, resulting in a lack of apps to serve customers. And there were very few customers because there were very few apps.

Amazon onboarded sellers for two years before launching in India because they knew that customers would not be happy if the products they wanted were not available. So they focussed on building the supplier side before focussing on the consumer side.

Take away

Platform strategy works well for Business growth and also to safeguard Business by creating entry barriers. Microsoft Teams evolving into a Platform is a Windows moment in the Digital era though Microsoft has diversified into multiple domains now.

However, GenAI has pushed the technology market into top gear. As the technology firms evolve to grapple with this shift, it will exciting to see the new Business models and strategies they use to stay relevant in the Market.

Image credit: Google Gemini