Real Meaning of Nadella's Wordy Memo Was Lurking Between the Lines

 
 
By Eric Lundquist  |  Posted 2014-07-15 Email Print this article Print
 
 
 
 
 
 
 

NEWS ANALYSIS: Microsoft CEO Satya Nadella's 3,000-word memo to employees could have used a sharp-eyed editor. But the meaning came through. Big changes are coming.

While long-form journalism faces an uncertain future, long-form corporate memo writing is alive and growing. Consider the 3,000-word memo from Microsoft CEO Satya Nadella.

In an era of multimedia, 128-character tweets and 12-second video micro messages, cranking out a long, four-part mega memo of words interspersed with a couple of happy employee photos and simple diagrams harkens back to an era when words ruled and memos from on high were scrutinized to discover which execs were on the way up and which were on the way out.

The scrutinizing of Nadella's opus is well under way. The Wall Street Journal focused on hints at organizational change, which is often a code phrase for layoffs. Over at Computerworld, the "demotion" of desktop Windows to the second half of the memo raised the question of whether Windows—fundamental to Microsoft's growth—was headed for the digital museum.

The New York Times took a state the obvious approach and said the memo indicated changes are coming to Microsoft. Over at Quartz, Jean-Louis Gassée stated that what Nadella really needs is an editor with a sharp eye and sharper pencil. (As an aside, pencils were analog devices once used to edit paper copy.)

While Nadella's memo could have used an editor out of The Front Page in the Walter Burns mode, scruffy editorial types rarely make it to the rarified ranks of corporate CEOs. The simple fact is executives and their teams tend to go long because of the mistaken belief that big statements from the boss require long memos.

While this idea has been refuted by history (Abe Lincoln at Gettysburg, etc., etc.), the idea that the new boss has spent months ruminating on the future only to cough up 600 words or so isn't going to pass the big idea test.

In any case and according to the latest reports from Bloomberg and the Wall Street Journal, all of that memo's talk about innovation, productivity and the harmonization of all the world's devices, content and activities was really air cover for a big upcoming layoff.

As Bloomberg reported, "The reductions—which may be unveiled as soon as this week—will probably be in areas such as the Nokia mobile unit, Microsoft divisions that overlap with that business, as well as marketing and engineering, said the people, who asked not to be identified because the plans aren't public. The restructuring may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009, two of the people said."

The era of cloud and mobile computing has been a tough road for the traditional technology vendors. Hewlett-Packard has been whittling its workforce almost but not as fast as revenues have declined.

Dell took its ball and went home to the safer confines of a private company rather than restart in the public market's unblinking eye. IBM abandoned its low-end server business and is scrambling to turn its $2 billion acquisition of SoftLayer into its cloud engine.

Selling and servicing boxes is a much statelier and profitable business than signing up customers for cloud computing subscriptions. At last week's Amazon customer conference in New York, CTO Werner Vogels reminded the audience of Amazon Web Services' 44 price cuts in recent years and of the company's desire to be the high-volume, low-cost cloud computing leader. This is a different world indeed for the traditional tech suppliers.

Nadella and Microsoft seem to have recognized this new era, but the company will still have to readjust its licensing structure and its reputation for corporate in-fighting and a stodgy new-product development cycle to the mobile and cloud era highlighted in the memo. Let's see if the next Nadella missive can tell a success story in 500 words. That would be a start.

Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008, authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm, which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.

 

 
 
 
 
 
 
 
 
 
 
 
 
 

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