Microsoft CEO Sees Big Changes Ahead, 'Nothing Is Off the Table'

By Pedro Hernandez  |  Posted 2014-07-11 Print this article Print

Big changes are coming to Microsoft, again. A year after former CEO Steve Ballmer kicked off the Great Reorg of 2013, Satya Nadella is taking a stab at shaking up the Redmond, Wash.-based software giant. Nadella, who took over as CEO for Ballmer on Feb. 4, sent a lengthy internal email on July 10 ahead of the release of the company's fiscal 2014 fourth-quarter earnings on July 22. In its fiscal 2015, Microsoft will operate very differently, he said. Nadella indicated that his company's leadership would embark on "fundamental cultural changes" to capitalize on the potentially massive market opportunities for Microsoft when the number of people with Internet-connected devices soon crosses the 3 billion milestone. "Nothing is off the table," he added, suggesting that company executives are preparing to make bold, perhaps unconventional moves that break with tradition. What can Microsoft's customers and employees expect? How will the company's product mix change? Read on for some key takeaways from Nadella's missive.

  • Microsoft CEO Sees Big Changes Ahead, 'Nothing Is Off the Table'

    by Pedro Hernandez
    1 - Microsoft CEO Sees Big Changes Ahead, 'Nothing Is Off the Table'
  • Step Back From the Windows

    Windows is an undeniably critical pillar of Microsoft's software empire, but in the post-PC era, the OS doesn't casts as large a shadow as it once did. Nadella's memo contains more than 3,000 words. The total number of Windows mentions: 13. Eleven, excluding Windows Phone. Enough said.
    2 - Step Back From the Windows
  • Innovate or Die

    Nadella wants Microsoft to shed its image as a slow-moving, monolithic software maker. "The day I took on my new role I said that our industry does not respect tradition—it only respects innovation," he said. "I consider the job before us to be bolder and more ambitious than anything we have ever done."
    3 - Innovate or Die
  • Work-Life Balance

    Microsoft is not going the way of IBM. Instead of turning its focus exclusively to enterprises, the company sees an opportunity for solutions that work just as well in one's professional and home life. "We will think of every user as a potential 'dual user'—people who will use technology for their work or school and also deeply use it in their personal digital life," said Nadella.
    4 - Work-Life Balance
  • A Cloudy Enterprise Computing Forecast

    Microsoft Azure's business-friendly offerings are key to the company's aim to become the go-to cloud IT services vendor. "We will transform the return on IT investment by enabling enterprises to combine their existing data centers and our public cloud into one cohesive infrastructure backplane," stated Nadella. "We will enable our customers to use our Cloud OS to accelerate their businesses and power all of their data and application needs."
    5 - A Cloudy Enterprise Computing Forecast
  • Faster, More Market-Aware Internal Software Development

    Nadella plans to streamline Microsoft's development practices, improve communication and deliver software that anticipates where the market is going. "Each engineering group will have Data and Applied Science resources that will focus on measurable outcomes for our products and predictive analysis of market trends, which will allow us to innovate more effectively," said Nadella.
    6 - Faster, More Market-Aware Internal Software Development
  • Scratching the Surface

    In terms of hardware, mobile devices in particular, Microsoft is just getting started, hinted Nadella. "Our first-party devices will light up digital work and life. Surface Pro 3 is a great example—it is the world's best productivity tablet."
    7 - Scratching the Surface
  • Windows Phone's Future Hinges on Nokia

    Despite encouraging gains in some markets, Windows Phone still lags far behind Android and iOS smartphones. Microsoft, said Nadella, "will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition."
    8 - Windows Phone's Future Hinges on Nokia
  • Xbox Stays Put

    Microsoft's CEO quieted persistent rumblings that the company was considering setting the Xbox division loose. "Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft," said Nadella.
    9 - Xbox Stays Put
  • A Leaner, Meaner Microsoft

    Microsoft will emerge a less bureaucratic organization in its fiscal 2015. The company "will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes." Does that also entail job cuts?
    10 - A Leaner, Meaner Microsoft
  • A Kinder, Gentler Microsoft

    The indignities of stack ranking and other rigid employee policies that drove away talented coders and innovators are in the past. "I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work," said Nadella.
    11 - A Kinder, Gentler Microsoft

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