I've talked with several vendors, lately, who all agree that the 3rd party add-on market will change drastically. They all, also, are very concerned about the part they can play in the future of Microsoft devices and services. They are looking for suggestions because the way ahead is not clear.
Microsoft is notorious for providing products that are "just good enough." In the past, between major revisions of products, Microsoft would make hit lists of features and technologies, generally from customer requests that should make it into the new version. More and more over the past few years, it's obvious that development has been less focused on customer needs and more on company direction. Can you say Cloud? Windows 8?
Still, with the feature list close at hand, Microsoft program managers and developers would walk through and begin checking off the top customer requests as they were added to the product. The resulting release represented customer requests, however the features were never best-of-breed, leaving many customers to seek elsewhere for more robust features. This practice opened up a huge after-market for 3rd party software providers to sell add-ins that took the existing Microsoft product features and enhanced them, extended them, and made them best-of-breed. There are many vendors today that continue to supply add-ons and solutions that extend Microsoft products and their entire business is built on it.
So, what happens to the add-on market if Microsoft is successful in realizing its new dream of a "Cloud on every desk"?
The add-on market will definitely change – and change quickly. Those add-ons that only work for on-premise will need to be reworked for Windows Azure or face elimination. Those customers that are clinging to add-ons as the source for full-featured solutions will need to find new ways of doing things. Add-on vendors will need to take a step back and envision how they can participate in a future littered with hosted services.
And, this will impact Microsoft, too, and in a way I don’t believe they realize.
Over time, Microsoft found that sometimes it was easier and more cost-effective to acquire a technology than to develop it. StorSimple, Opalis (now Orchestrator), and Softricity SoftGrid (now App-V) are examples that come to mind. As the on-premise add-on market dries up, how will Microsoft advance its products into the best-of-breed circle? Windows Azure features are growing by leaps and bounds and appears to be building into a Cloud juggernaut, but can Microsoft, a company that historically builds products that are "just good enough" hope to architect their own best-of-breed solutions without the strong add-on market?
Times are changing, and this is an extremely interesting area to watch.