In context: The "thin client" concept is almost as old as computing itself, dating back to the first terminals used to access mainframe computers in early multi-user systems. Today, thin clients are primarily used in the enterprise market to simplify the management of employees and off-site operations – and Microsoft clearly wants a piece of that.
What just happened? Despite still being one of the most popular login methods, developers are gradually replacing passwords with newer, more robust authentication technologies. The "next generation" of online security is coming slowly but steadily, and Microsoft has now decided there is room for a significant redesign of the entire login experience.