Microsoft Wins Over Facebook and Bets on Windows Subscriptions

"Microsoft got cool again," said Facebook (FB)  chief information officer Tim Campos at Microsoft's (MSFT) Worldwide Partner Conference. That comment, along with Campos' disclosure that Facebook will be providing Office 365 subscriptions to its 13,000 employees, show how much attitudes towards the software giant have been changing within influential tech circles, many of which had been dismissing the company as an out-of-touch dinosaur that would be marginalized as the tech sector's center of gravity shifted from PC apps and on-premise enterprise software towards mobile apps and cloud services.

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Notably, Campos said Facebook was drawn to Office 365's strong cross-platform support -- the suite's iOS and Android apps have received high marks -- as well as its AI-powered tools such as Delve, which relies on user data and activity to surface relevant information. He also talked up Microsoft's newfound willingness to constantly update Office with new features, even going as far as to say it meshes with Facebook's oft-touted "move fast" corporate philosophy.

Clearly, this isn't Steve Ballmer's Microsoft anymore. Just ask iOS/Android and Linux developers, each of whom Microsoft has tried hard to cater to in spite of its well-known ownership of rival platforms. In spite of lingering developer skepticism, these efforts appear to be paying off.

Also part of Microsoft's philosophy change is an embrace of subscription-based services, one that increasingly goes beyond cloud apps. Towards that end, the company announced today it will begin selling the E3 version of Windows 10 Enterprise for $7 per user per month, or $84 per year. It also announced Surface as a Service, a leasing option for Surface tablets and the Microsoft software running on top of them.

The moves come amid Microsoft's efforts -- accompanied by license fee cuts and free Windows 10 upgrades -- to monetize consumer Windows installations via Bing ads, Windows Store purchases, and the cross-selling of Office 365 and Xbox Live Gold subscriptions. They also come at a time when PC upgrade activity remains fairly weak, something that increases the value proposition for making Windows revenue less dependent on new hardware sales.

Lowering that dependence won't happen overnight, but as recent moves have shown, Microsoft is now much quicker to adjust to a changing tech landscape than it used to be. Just ask Facebook.