10 Ways Satya Nadella Is Changing Microsoft's Product Strategy

By Don Reisinger  |  Posted 2014-04-01 Print this article Print

Microsoft CEO Satya Nadella has been giving a few glimpses of his strategic vision over the past few months. First, he wrote a letter to employees outlining his hopes and vision when Microsoft appointed him CEO earlier this year. Then last week, Nadella demonstrated his interest in making the company more platform-agnostic with his Office for iPad announcement. Now, he's announced a new slate of leaders within Microsoft and in doing so again hinted at what he'd like to see the company become in the next few years. In a March 31 letter to employees, Nadella disclosed  not only who will lead several core Microsoft divisions—including Scott Guthrie in Cloud Computing, Phil Spencer on Xbox and Stephen Elop for Devices—but also what he sees as the company's opportunities to achieve success. Indeed, Nadella's letter to employees announcing the leadership change showed that he knows exactly where he wants to take the software giant and who he needs to help him achieve his goals. So what do his most recent letter and other actions indicate about his product strategy in Redmond? Take a look at this eWEEK slide show to find out.

  • 10 Ways Satya Nadella Is Changing Microsoft's Product Strategy

    By Don Reisinger
    10 Ways Satya Nadella Is Changing Microsoft's Product Strategy
  • Mobile Comes First in Microsoft's Plans

    Satya Nadella said multiple times in his most recent letter to employees that mobile must come first in his company's plans. Nadella has watched companies like Google, Apple and Samsung capitalize on the mobile space, and he now wants Microsoft to do the same. He plans to achieve that by leveraging both hardware and software, but it won't be easy.
    Mobile Comes First in Microsoft's Plans
  • Cloud Computing is Just as Important

    In addition to worrying about mobile, Nadella is convinced that the cloud is the future for Microsoft. He says that cloud solutions, led by Scott Guthrie, could be a key component in Microsoft's enterprise growth and should also help the company appeal to consumers. His predecessor Steve Ballmer believed the cloud was important, too, but it appears Nadella is taking it to the next level.
    Cloud Computing is Just as Important
  • Xbox Still Matters

    Although Nadella has remained quiet on his plans for the Xbox division, he actually indicated on March. 31 that he has high hopes for that business in the coming years. Under Phil Spencer's leadership, Nadella wants Microsoft to improve its game-franchise offerings, enhance the title's software and make it work nicely across other platforms.
    Xbox Still Matters
  • Microsoft Needs a Cohesive Software Strategy

    Following that, it's important to point out that Nadella sees a lot of potential in bringing the Xbox software experience to other devices. In fact, Microsoft's CEO says that the realignment of the Xbox division will allow his company to "bring more of the magic of Xbox to all form factors, including tablets, PCs, and phones." What does that mean? Nadella didn't say. But expect Xbox to play a bigger role in his company's mobile plans in the coming years.
    Microsoft Needs a Cohesive Software Strategy
  • Nokia Will Lead Microsoft Mobile Product Strategy

    There's no debating that Nokia will play a crucial role in Microsoft's mobile hardware strategy. Nokia's former CEO Stephen Elop will head up Microsoft's Devices division, and Nadella says that the Nokia Devices and Services team will bring some expertise to the table that the company desperately needs. Nadella is counting on Elop and the Nokia team to "drive innovations" to his company's mobile products.
    Nokia Will Lead Microsoft Mobile Product Strategy
  • The Enterprise Matters Greatly

    Although Nadella has spent a considerable amount of time talking about the Xbox and Nokia lately, make no mistake: The enterprise is extremely important to him. Nadella comes from an enterprise-focused cloud-services division in Microsoft, and he specifically mentioned his desire to enhance his company's Enterprise Mobility Suite. Although Microsoft might look a little more consumer-friendly, it's still an enterprise-focused company.
    The Enterprise Matters Greatly
  • Consumer and Enterprise Markets Are Equally Important

    So, how might Nadella find a way to toe the line between consumers and enterprise customers? If nothing else, he's a benefactor of the period in which he's become CEO. Consumers are now making more decisions in the workplace, and IT has taken a backseat when it comes to mobile and, in some cases, software solutions. That helps Microsoft. If Nadella can put the right product strategies together, he can appeal to consumers with OneDrive and Xbox software implementations across devices and build hardware that still works well in a corporate environment. Microsoft is one of the few companies in the industry that can deliver products that can equally appeal to consumers and enterprise customers. And Nadella seems to know that.
    Consumer and Enterprise Markets Are Equally Important
  • Office Remains One of Microsoft's Corporate Crown Jewels

    Office is central to Microsoft's strategy over the next several years. Part of that is due to the fact that Office drives a significant portion of the company's revenue and profit. But as Nadella proved last week announcing Office for iPad, he's willing to accept that customer preferences have changed, and he'll go where the customers are, instead of trying to force them to come to him. Ultimately, it's the right move. Office is the platform millions around the globe rely on, and it's the easiest way for Nadella to attract customers to his other services, like the cloud-based OneDrive.
    Office Remains One of Microsoft's Corporate Crown Jewels
  • Search for Unique Products, Market Positions

    Although the technology industry has fallen victim to a general lack of uniqueness, Nadella indicated in his letter that he wants to try to find what sets Microsoft apart from its competitors. Is it Xbox? Is it Office? Is it Nadella's own vision? It appears based on Nadella's letter that his product strategy centers on the idea of finding something unique in Redmond that he can leverage. Now we just need to see if he can pull it off.
    Search for Unique Products, Market Positions
  • Break Down the Garden Walls

    One of the big complaints about Steve Ballmer was that he built a corporate structure at Microsoft that didn't allow for enough collaboration. Divisions were just that—divisions—and he couldn't see the value of allowing them to work together more efficiently. Nadella has changed that by integrating the Xbox division, putting it under the broader operating system umbrella and ensuring that the software experience Microsoft offers is consistent across devices. Nadella has also made mobile and both software and Xbox collaboration more achievable with his recent moves, putting leadership into the hands of just a few people. It's a smart move that should improve overall collaboration on products.
    Break Down the Garden Walls
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.

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