Nadella Charts Microsoft's Future, Signals Big Changes
Big changes are in store, Microsoft CEO Satya Nadella hinted in a lengthy email to Microsoft employees on July 10.
Ahead of the release of the company's fiscal 2014 fourth-quarter earnings on July 22, Satya Nadella, issued a memo that signals a push to accelerate the tech giant's post-PC, "mobile-first, cloud-first" vision. Nadella has been at the helm of Microsoft since early February, following long-time CEO Steve Ballmer after a high-profile selection process that took more than five months.
Nadella has since been stoking the embers of a culture change within Microsoft, arguing that its past successes, no matter how game-changing, guarantee future prosperity. "The day I took on my new role I said that our industry does not respect tradition—it only respects innovation," he wrote.
Now, he is signaling that Microsoft is embarking on a "bolder and more ambitious" computing technology strategy.
Nadella stated "that in order to accelerate our innovation, we must rediscover our soul—our unique core." Microsoft, at its core, he said, "is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more."
The chief executive envisions a role for Microsoft in both a person's professional and personal lives. It's a "dual user" paradigm that Nadella feels his company is uniquely qualified to serve. "Microsoft will push into all corners of the globe to empower every individual as a dual user—starting with the soon-to-be 3 billion people with Internet-connected devices," he wrote. "And we will do so with a platform mindset."
Microsoft hopes to accomplish this with a new breed of intelligent, easy-to-use apps and software offerings, like Delve (formerly Oslo), Power Q&A, Skype Translator and the company's digital assistant, Cortana. "Apps will be designed as dual use with the intelligence to partition data between work and life and with the respect for each person's privacy choices," said Nadella.
Cloud computing, via the company's own massive Azure platform, also factors into Microsoft's plans.
"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," said Nadella. "We will enable our customers to use our Cloud OS to accelerate their businesses and power all of their data and application needs."
Hardware is another priority for the company. Nadella pledged to "build first-party hardware to stimulate more demand for the entire Windows ecosystem," which includes developing new product categories like the Surface Pro 3 "productivity tablet." In terms of smartphones, he added that the company "will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition." Microsoft completed the $7 billion acquisition of Nokia's handset division in April.
Nadella also addressed persistent rumors that Microsoft was considering shedding the Xbox division. Describing Xbox as "one of the most-revered consumer brands," the business unit's technical innovations flow back into the company's productivity efforts, he said. "Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft."
The company's workforce, however, will be bracing for some major changes.
"I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work," said Nadella. Engineering processes will be revamped "to be customer-obsessed, data-driven, speed-oriented and quality-focused." Further, employees will "see fewer people get involved in decisions and more emphasis on accountability."
Microsoft plans to invest more in training over the next six months and other programs designed to keep and attract talent. Workers should also face fewer roadblocks to switching roles within the organization and finding avenues toward personal growth, said Nadella. Finally, he hopes to fashion the 39-year-old company into a more agile business by increasing "the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes."