Editor’s note: At its 2016 developer conference, Microsoft executives talk about Windows 10, Azure and CEO Satya Nadella’s “Cloud First Mobile First” strategy. What’s it all mean? Technology Business Research Analyst Ezra Gottheil takes an in-depth look.

HAMPTON, N.H. – Microsoft’s 2016 developer conference, “Microsoft Build,” allowed the company to “build” on the widespread approval of Windows 10 as well as the broad adoption of Azure Active Directory and the introduction of other critical components of CEO Satya Nadella’s “Cloud First Mobile First” strategy. Despite the company’s early failure and subsequent de-emphasis of Windows phones in the critical smartphone market, Microsoft is now giving developers good reasons to develop for their platform, which will protect the Windows franchise, help drive a PC refresh, and leave open the possibility of competing in smartphones in the future.

Creating new reasons to upgrade

Microsoft Cloud First Mobile First strategy for PCs, brings an expansion into new ways to work with PCs, mobile devices, and the cloud. The strategy enhances all devices and systems, focused on making them not only easier to use, but more capable. These new tools, conversations, touch, and ink, are all available to developers, greatly accelerating the growth of PCs utility. Microsoft is betting that of these improvements will lead to a greater willingness on to purchase new devices, systems, and services, and when they do to spend more.

The entire PC industry, including OEMs, component suppliers and Microsoft, is suffering from its own past success. Old PCs continue to perform and serve their users and owners, extending the PC lifecycle and reducing sales. Inexpensive new entry-level PCs are far more capable than their predecessors, driving a decrease in average selling prices as buyers choose “good enough” PCs. The Windows initiative to become “more personal” will give buyers good reasons to refresh and to buy a better PC to take advantage of the improved Windows experience.

To make the PC more personal, which is to say more easily more powerful, Microsoft is broadening the types of interactions that Windows can handle. This includes language processing, spoken or typed, through Cortana, as well as touch and stylus input.

Conversation is a new interface paradigm

Pseudo natural language interfaces (PNLIs) like Cortana are very important in making technology more useful. These interfaces leverage knowledge about the user and about the data to suggest actions that would be hard to specify through more traditional interfaces. Microsoft has made Cortana available on iOS and Android, making it the only cross-platform digital assistant, a distinct advantage.

Greater availability of Cortana – in Windows, directly via Windows PCs and crossovers into the Xbox gaming console, Azure and its various mobility initiatives – not only confirms Microsoft’s efforts to unify its platforms for developers, but promises greater and more usable interoperability among Windows-powered devices for consumers and enterprise users.

Microsoft has grand ambitions not only for Cortana, but for a planned roster of PNLI bots integrated into Skype, Facebook and other applications, across Windows, iOS and Android ecosystems. Microsoft views human language as the next step in UI development, with bots that proactively engage and interact with other bots to access information or services. While this “conversation as a platform” will take years to fully evolve, it highlights the significant shifts ahead for Microsoft and the device-makers in its ecosystem.

Windows gets tactile

Microsoft is also working to develop more refined interactions between stylus and screen. Microsoft’s acquisition of technology from Surface Pen maker N-trig looms large in Microsoft’s Ink Workspace initiative. A small number of stylus-friendly applications unveiled at various Microsoft events in 2015 has evolved into a library of pen-powered writing and sketching applications.

Greater stylus support and handwriting recognition boosts the appeal of PCs for routine tasks by acting as a digital collator for hand-written notes and reminders, and a powerful intuitive tool for editing and annotation. Microsoft stated that its research shows 72 percent of people use pen and paper for at least one hour each day, highlighting a potential new customer segment for Microsoft and PC OEMs alike.

Microsoft emphasized the importance of touch in both tablets and traditional form factor PCs. Touch is an important enhancement to PCs, but most users and buyers are not yet aware of the benefits. As touch becomes more common, more users will come to expect touch as a part of the PC experience.

More powerful tools make for more useful PCs

Microsoft’s expansion into new ways to work with PCs, mobile devices, and the cloud enhances all devices and systems, making them not only easier to use, but more useful. The new tools, conversations, touch, and ink, are all available to developers, greatly accelerating the growth of utility. All of this contributes to a greater willingness on the part of purchasers to spend for devices, systems, and services. At the same time, the evolution of Windows challenges both Apple and Google to compete in the traditional PC workhorse market.

Specifically, what Microsoft is doing justifies updating PCs, and choosing more capable and more expensive PCs, which benefits Microsoft as well as the company’s OEM partners. Microsoft and the OEMs continue to be challenged in communicating the benefits of the new Windows, new applications and services, and new PCs. This is especially true in light of the greatly increased capabilities of inexpensive entry-level PCs. TBR expects both Microsoft and the OEMs to reorient their marketing to communicate more effectively the improved experience available with the new devices.