Kenny Rogers famously sang about knowing when to hold your cards and knowing when to fold 'em (and run). Microsoft appears to be taking that lesson to heart in the digital assistant space, and rather than try to usurp Amazon's popular Alexa with its current set of cards, it has decided to play a different hand—going forward, Microsoft will focus on making Cortana available as a skill.
Work on this has already begun. Cortana has been available as a skill since last year, and at Microsoft's Build 2018 conference, Microsoft demonstrated how Alexa and Cortana could work together in Windows 10 as part of a previously announced collaboration between Amazon and Microsoft. So, it's not really a surprise that Microsoft is finding it easy to concede defeat, with a caveat.
"Would it be better off, for example, to make Cortana a valuable skill that someone who is using Alexa can call? Or should we try to compete with Alexa? We, quite frankly, decided that we would do the former. Because Cortana needs to be that skill for anyone who is a Microsoft Office 365 subscriber," Microsoft CEO Satya Nadella said
Nadella is basically saying that Cortana will never be able to compete with Alexa, and so Microsoft is not going to waste time and resources trying to do that. In doing so, Nadella shed light on why Microsoft chose to integrate Cortana with Alexa last year. He does not want to stop there, however—he also wants Cortana to work with Google Assistant.
"You should also be able to use [Cortana] on Google Assistant. You should be able to use it on Alexa, just like you use our apps on Android or iOS. So that’s at least how we want to go,," Nadella added.
In a broader sense, Nadella is admitting that Microsoft can't compete with Amazon in the smart speaker space, where Alexa has a stranglehold on the market. Speakers like Harman Kardon's Invoke with Cortana integration are destined to be secondary options compared to Amazon's Echo product line—there is just too much ground to try and make up at this point.
It is an interesting moment of transparency for Microsoft, and not necessarily the wrong decision.