These are fascinating times for Microsoft, as its new CEO continues to stamp his mark on the company and realign its strategies. At this week’s Build event in San Francisco, Microsoft made a slew of announcements designed to encourage greater development support and OEM uptake.

Whilst the main news coverage centred around updates to the Windows Phone operating system (and they were certainly substantial updates), the more intriguing news centred around Microsoft’s design to revisit the licensing terms of its struggling OS as well as hint at a serious interest in the Internet of Things (IoT).

TelecomTV is not alone in arguing that Windows Phone OS has missed the opportunity to become a serious contender in the mass market smartphone sector, currently dominated by Android and iOS, and that Microsoft may well be better off by forking Android (that’s apparently Nokia’s view too). But certainly for the time being, Microsoft is committed to pushing its own OS, and on the evidence of this week it shows no signs of giving up.

For a start, it announced that it would stop taking a software licence for OEM use of its OS on devices with screens smaller than 9-inches. That means all mobiles, smartphones, small tablets and hybrids. Currently, Microsoft has been charging between $5 and $30 per device sold.

“To accelerate the creation of great mobile devices running Windows and grow our number of users, we announced today that Windows will be available for $0 to hardware partners for Windows Phones and tablets smaller than 9” in size,” said Microsoft Operating Systems group EVP Terry Myerson, adding that it will also include a one-year subscription to Office 365. “For partners, this makes it easier to bring more compelling devices to market. And for consumers, it will mean a broader range of great smartphones and tablets at prices that will be competitive with anything on the market.”

Whether or not this will make any difference to the major OEMs (surely Samsung will stick to Android?) is doubtful. But the main target may be Chinese and Indian OEMs – there is still a lot to play for in these vast domestic markets.

It will also make Windows available for free for IoT applications and products. Details remain sketchy, but a holding page website is now live. We do know that it is calling it…. Drum roll please… ‘Windows for Internet of Things’. Catchy.

Myerson showed Windows running on an Intel Quark chip, which he described as: “a processor the size of a pencil eraser that is running a full version of Windows,” adding, “You have to ask yourself, what’s possible, what kind of devices are possible when a PC runs on something the size of an eraser?”

He said that: “When we are ready to ship Windows for the Internet of Things, we will make that available for $0 to encourage creation of these new devices and experiences in this new and exciting category.”

The first SDK release is due any time now, and will include “an incomplete pre-release” of its software and API. A more complete API surface and integrated cloud services are promised for later this year.

“We really do believe in the Internet of Things,” said Meyerson. “We think as the screens get smaller and the devices get smaller, the cloud gets bigger, and we’re going to make some incredibly new things possible.”

Related to this, Microsoft is looking at a free or low-cost version of Windows 8.1 that is bundled with Bing and a year’s free use of Office 365, aimed at Windows 7 users who have yet to make the switch. It would appear to be aimed at cheap notebook OEMs, who are now competing with an improving Google Chromebook offering.

And Microsoft also announced that downloads for its long awaited Office for iPad suite of apps have now exceeded 12 million mark after just one week of availability.