I first heard of this phrase back in 2007 [?] when I watched Steve Jobs' 2005 Stanford Commencement Address. He used this to remind us to trust our guts and feelings and do what we think we should do, and that one day these 'dots' will somehow connect.
Back in the early 2000s, Microsoft took the world by surprise [ok maybe just me] when it announced that it was going after the video game console market by announcing the Xbox. Around that time, Sony had just released the Playstation 2, and Sega's Dreamcast was barely able to stay alive. I was still a little kid then, and I remembered wondering why Microsoft wanted to making a game console when its main business was Windows, Office, and well, productivity software. While Microsoft was already a game publisher then, nobody was really associating Microsoft with fun.
Fast forward to today. Not only has Microsoft managed to establish a stronghold in this highly competitive market, Xbox's successor, the Xbox 360, has also managed to hold its own against the Sony Playstation 3. But the most impressive feature, I feel, that came out of Microsoft's gamble in the market will probably be Xbox Live, its multiplayer gaming and content delivery platform, and this is the answer to my query on how the Xbox fits into Microsoft's main business.
Xbox Live started off simply as a online service to connect Xbox players around the world to play together, and since then it has branched out to include Windows and Windows Phone platforms as well. Its role has also been expanded to allow users to do more than just play games; users can now buy and download games, download additional content, update their systems, and interact with each other through other Microsoft services like Live Messenger.
Thanks to Facebook and Apple, games are now no longer an exclusivity of introverts or geeks. Anyone with a Facebook account or a smartphone can play games now, and more people are now playing games as they try get themselves rid of negative connotations like violence. Its a very important market not to be treated lightly.
Microsoft is in a very interesting position. Unlike Apple and Google, where they developed cloud ecosystems after they have released their operating systems and devices to distribute their apps and games, Microsoft has strong services to begin with, like Xbox Live. At this stage, the dots have connected for Microsoft. I'm pretty sure when the engineers first started writing Xbox Live code back in the 2000s, they would not have thought that it will be an important component of Windows Phone devices today, and soon, Windows 8. If they have never developed any game console, they will be in a worse position today. They have plenty of catching up to do, but one must be in the wrong mind to dismiss them.
Tablets are hot these days, but besides Apple's iPad and, to a lesser extent, Samsung's Galaxy Tab, no other tablet manufacturer has been able to come close, sales-wise, popularity-wise. That is, until Amazon's Kindle Fire came along. The question is, why?
The answer is simple: Content.
The iPad has a big advantage over Android tablet manufacturers, which is the availability of apps. Android tablet manufacturers, on the other hand, have no control over the number of apps available on the Android Market. This makes manufacturers difficult to differentiate themselves from each other based on hardware alone. Add on to the fact that there are so little apps available for Android tablets currently, consumers see no point in getting one.
Amazon, just like Microsoft, is well positioned. Instead of making a tablet and waiting for the Android market to populate itself with tablet apps, Amazon, being an online retailer, has huge amounts of books, songs and apps available for purchase, and consumers now find it worthwhile to get a Kindle Fire so they can have access to the Amazon stores.
Like Microsoft, I am sure when Amazon started its business as an online bookstore, they would never have thought that one day they will find themselves in a hardware tablet market. Similarly, the Amazon Web Services do not seem to have any relation with selling stuff online at first glance, but now their Kindle Fire comes with the Silk Browser where powerful backend AWS servers process and render webpages first before sending them to users.
Things are definitely looking very good for Amazon, and my humble prediction sees them join the ranks of Apple, Facebook and Google in changing our lives forever.