16 Oct 2014

Microsoft; new CEO, new vision

A new CEO always means changes to an organisation. Satya Nadella replaced Steve Ballmer as the CEO of Microsoft on February 4, 2014. Half a year later we’re starting to see Nadella’s vision for the company emerge, and it’s worth taking a look at where Nadella is taking the company.

The most dramatic move that Microsoft has made under Nadella to date were sweeping job cuts in July. Under some extensive restructuring by the company 14% of Microsoft’s entire workforce – 18,000 jobs worldwide, were made redundant. It’s clear that Nadella wants to run a leaner company, but the job cuts were not even across the company; the bulk of them (all but 5,500) were to ex-Nokia staff. Microsoft paid $7.2 billion to acquire the phone maker in April, but clearly the integration of Nokia into the Microsoft fold would create redundancies.

Despite these redundancies, Nadella’s vision for Microsoft is as a mobile devices and cloud services business. He told Tech Crunch in July that the company is committed to providing the best possible experience with its applications regardless of the platform that they’re accessed on, and pointed to the success of Office on iPad as an early example of this strategy in practice.

With support for Windows XP formally finished, Microsoft also faces some challenges with its operating system that it needs to resolve. Windows 7 is popular with corporations, but Windows 8 has not been to date. Information Week outlined six big bets that Microsoft is making with Windows 8. Chief among these are a focus on touch experiences, improving the operating system’s appeal with enterprises through Windows 8.1, and pushing the affordability of devices such as Surface tablets.

Given that Nadella has come from Microsoft’s cloud business, it’s not surprising that the company has taken some big steps in its Azure strategy already. As the company’s Corporate Vice-President for Windows Server and System Center said at a TechEd conference in May “the rate in which we are putting things out is just like nothing we’ve ever done before from our company.”

Recent Azure innovations include Azure RemoteApp, which enables users to run applications on Windows, Mac, iOS or Android using thin-client technology. Another one, Azure Files, exposes storage as a share folder and provides easy file sharing between Azure Virtual Machines.

Quietly Microsoft also added file encryption to Office 365 for documents stored in SharePoint online and OneDrive for business, upping the security credentials of its cloud.

Looking forward, we can expect to see the company continue to accelerate its cloud and Azure innovations. There are rumours that the company will pull back from hardware, especially consumer divisions such as Xbox, but we consider these to be unlikely as well. Microsoft wants to be an “access us anywhere, anytime” company, and having a presence in the lounge room will be an important component of that. With that being said, some of the company’s more far-fetched ideas, such as forming a Netflix House of Cards-style content generation have been retired.