Sunday, July 3, 2016

Did Microsoft Acquire Wand Labs for Talent or Technology?

While the whole world was talking about Microsoft’s famed acquisition of Linkedin, it quietly acquired yet another company- rather small in size called as Wand Labs.
In order to understand the specifics behind this acquisition, we would need to reverse jog our memory a few months back to Microsoft Build Conference. In this conference, Microsoft CEO Satya Nadella laid out the vision of something called as “Conversation-as-a-Platform”.

Last year, I did write a bit about how future of IT will more depend upon how invisible it will be for the users. The crux here being that eventually technology will become so seamless that it will weave with our very fabric of existence, so much aligned with our lives that we wouldn’t even know it existed. When we reach that stage of maturity of technology, the current means of interacting with technology i.e. through keyboard or mouse or stylus or any other physical means with exist but will become unpopular over a period of time. When that happens, Microsoft (and a lot others) believe that we will interact with technology with language, with the power of spoken words- as we do as a second nature when interacting with humans. This future transformation is best put-forward by Drupal founder Dries Buytaert when he argues-

The current Web is “pull-based,” meaning we visit websites or download mobile applications. The future of the Web is “push-based,” meaning the Web will be coming to us. In the next 10 years, we will witness a transformation from a pull-based Web to a push-based Web. When this “Big Reverse” is complete, the Web will disappear into the background much like our electricity or water supply.

Nadella’s vision of “Conversation-as-a-Platform” calls for three “actors” as was framed in Build 2016 conference 1) People 2) Personal Digital Assistant 3) Bots.

Simply explained, People are conversation starters, Digital Assistants like Siri and Cortana understands people, their habits much like personal assistants (using AI, machine learning) and Bots integrate with digital assistants and help do very specific chores like booking a ticket, ordering food etc.
Satya Nadella believes puts Conversations-as-a-Platform in the same category of breakthrough innovations of the past like the graphical user interface, the web browser and the iPhone-driven adoption of the touchscreen. And Microsoft is not alone in the game here. We have Amazon Echo (Alexa), Facebook Messenger (which as per the recent news supports ~ 11000 bots) and Slack (something I need to explore more). I am awaiting my Echo device that I recently and luckily have won in a contest in my organization to experiment more.

Again, this gets me curious on what has made such big organizations bet so big on messaging apps ?
A comprehensive data would serve me better here but if i need to make an educated guess, the success of apps like WhatsApp has made every organization stand-up and take notice. Just look at the amount of time and attention we spend on WhatsApp (or any other competing app) every day. Every organization is trying to see what more can they do with this massive user attention. Bots seem to be a natural way to add more value to that user attention span by making it easier for users to do more tasks and further making them hooked.

So where does Wand Labs' offerings aligns with Microsoft's vision?

The technology that Wand Labs (was still in beta when acquired) offered revolved around questioning some key assumptions around the usage of mobile phones-
What if your apps could all talk to each other?
What if you could let your loved ones borrow your services like you lend them your credit card?

This shortcoming as shared by Vishal Sharma, the CEO of Wand Labs in a talk to explains the motive behind his start-up-

Back when the desktop ruled, there was a single comprehensible hub that provided access to unlimited content and activities — the browser. People typically used it with several tabs open and painlessly shifted from one task to the next. “But the minute we went to mobile, the browser failed,” he says. Living in a browser world was like residing in a contiguous continent. But now we live in a land of a thousand islands — those apps we keep installing — and keep hopping from one to another. And good luck if you try to share what’s inside one of those apps — in many cases even if your recipient is using the same app, he or she can’t do what you can, because your stuff is (understandably) protected with a password.

So Wand is meant to be an super application that acts much like browser did for desktop and helps turn an island of app into a continent of sorts where there are ways established for apps to talk to each other via its advanced messaging technology.

While Microsoft’s current bot technology and framework helps people talk to phone to get specific work done, the way Wand possibly adds value is that it augments this vision further by enabling various apps to exchange information with each other and lets users share app features with other friends.

I wasn’t quite able to try Wand to add my experience here as the service is shut now but will be eagerly waiting to see what Microsoft eventually does with it. I will particularly be interested in understanding the enterprise use cases such technology can support.

so why did Microsofy eventually acquire Wand Labs ?

To understand this, I will look back at Satya Nadella's memo to Microsoft employees post Linkedin acquisition where he shared the factors he keeps in mind while taking acquisitions decisions-

Given this is the biggest acquisition for Microsoft since I became CEO, I wanted to share with you 
how I think about acquisitions overall. To start, 
I consider if an asset will expand our opportunity — specifically, does it expand our total addressable market? 
Is this asset riding secular usage and technology trends? 
And does this asset align with our core business and overall sense of purpose?

Companies do acquisitions for various reasons, prime of them usually being make them more profitable and adding additional revenue streams like the last acquisition that I assessed. But this one seem different as Microsoft seem to have taken an early beta player (with possibly no revenue of its own). Its prime motives could be two-fold-
1. As evident from Nadella's memo- this posssibly helps be more relevant by being adept to technology trends.
2. Again from Nadella's memo, something that aligns with overall sense of purpose.
3. Getting great people into its talented work-force.
2    What are your thoughts ?

Further, I will be looking forward to further assess a recent acquisition in enterprise space. Do watch this space for more updates.

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