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Microsoft tries morphing into something new

(MoneyWatch) COMMENTARY For years, Microsoft (MSFT) has been a target of loathing, the butt of jokes, and a major force in computing with a predictable approach to business: Put all the focus on Windows and Office and try to keep changes in the industry from sweeping over its money machine.

Microsoft has looked to many like a fully mature company that couldn't keep up with the times. It lost its share of the mobile operating system market. Apple (AAPL) surpassed it in size. Most discussions about the future of high tech among pundits and the press revolved around other names, such as Google (GOOG) and Facebook (FB). But Microsoft is making public some interesting moves it's clearly been working on for a while. And they add up to an end run strategy that, if successful, could co-opt much of what its competitors are doing.

Game time

The newest announcements came in a surprising forum: the annual E3 gaming show. Some thought that Microsoft's game offerings this year were underwhelming. And for hardcore gamers who want the next version of the Xbox console, that may be the case.

But Microsoft is actually playing to a bigger market in a way many might not expect from the giant. To assume that everything the company announced was only about gaming -- or even "only" about entertainment in general -- is to forget how many markets Microsoft addresses and how what it showed could be disruptive in any of them.

One thread in the strategic cloth Microsoft weaves is the new Xbox SmartGlass. This is an approach to using a smartphone or tablet, whether it runs Windows, iOS, or Android, as a second screen for what you are doing. Whether watching video, playing games, listening to music, or acting as a remote control, the mobile device offers a way to provide supplementary content and benefits. For example, while watching Game of Thrones, you might see geographic progress of the story on a map.

Cross platform connection

All the early reports seem to agree that no one can figure out quite what SmartGlass is supposed to be. So think bigger (or different).  Microsoft has surrounded its competitors and drawn them into its own direction. Supplementary content turns into moving content seamlessly from one platform to another. It doesn't take a lot of imagination to see how someone working on a Word document and a cloud version of Office might leave off a file on the desktop and pick it up later on a tablet. Or pause a movie on one device and pick it up on another, like a cross-platform version of Apple's AirPlay.

It's a startling move. Microsoft has for many years insisted that its operating systems should be the center of all things. But the company finally seems to be moving toward a strategy that focuses more on the services it can provide rather than assuming that the only business worth having is software sales. Services that could make use of what every major competitor does. That approach could be a road out of the dead-end future Microsoft seemed to be sailing toward.

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