With new CEO Satya Nadella (News - Alert) at the helm, Microsoft is changing into something it needs to be: a company embracing a changing tech landscape.

It is apparent that Redmond has woken up to the threats that it faces in today’s world. Over the past decade Microsoft has been bleeding from a thousand cuts. Apple really killed off Microsoft’s mobile business; Google never slipped up in search so Bing is stalled; and Android (News - Alert), Chromebooks, and competition in the office apps market have all put pressure on the company. But Microsoft is finally fighting back and doing it well.

The Surface Pro 3 shows Microsoft understands hardware enough to be dangerous to Apple, Samsung, and Google (News - Alert). The device is a perfect blend of tablet and laptop – it does a lot well but nothing perfectly. It is still a technological marvel in terms of its light weight and thinness. Perhaps most importantly it makes Microsoft cool. It is a reason for people to linger in its stores.

Another of its recent moves has been to embrace the freemium model by giving away Office 365. It had to be done but it is a very bold strategy as it risks watching paid users not renew. Like any company relying on this model, however, the trick for Microsoft will be giving away enough features to be useful but not enough to keep the people with money from shelling out for a subscription.

The Work & Play bundle is an ingenious ecosystem lock-in which offers a 12-month subscription to Office 365 Home, Xbox Live Gold, Xbox Music Pass, and Skype Unlimited World + Wi-Fi for $199 – this is a significant savings from the separate price of $450 for the individual components. What we see here is Microsoft is learning to leverage its combined strengths more than ever.

Meanwhile, Skype for Business is Microsoft’s way of embracing the popularity of Skype with its in-house communications platform Lync. This is a smart move from a BYOD perspective and immediately makes Skype seem safe for any enterprise.

Low-priced Windows machines are flourishing thanks to new Intel (News - Alert) processors, licensing changes made by Microsoft, and the company’s vision in giving away Office 365 for free to secure customers of these devices. The latest high profile low-cost windows machine is the $199 HP Stream.

And Sway is a new idea from Microsoft that allows users to create documents with Internet support which can be seen on a variety of devices easily. It’s like a creative canvas for the web without the bloat associated with past software from Redmond.

Microsoft also finally embraced WebRTC – a hot new technology that is expected to bring real-time communications to the masses via browsers and/or their favorite applications – via ORTC support in Internet Explorer. That means it has beaten Apple to the punch and likely just forced Cupertino to make a WebRTC support decision soon

The company is also moving into the exciting new wearable technology arena with a 10 sensor bracelet called Microsoft Band.

One move that Microsoft is making that I’m not sure of, however, it is the renaming of Nokia (News - Alert) products to Microsoft. Nokia is a strong mobile brand in the developing world, and this move could hurt the company in some areas, decreasing adoption rates. Still, Nokia is not the brand it used to be, and it may make sense to replace a decaying name with one that is gaining momentum.

So Microsoft is winning in the ecosystem wars, the PR wars, and is making itself more relevant and even somehow cool in the process. Sure, it isn’t Instagram-cool, but if the company continues down this path it will certainly help thwart the efforts of Google and Apple, which have been doing damage to the company for a number of years.