CEO Satya Nadella Willing to Shed the Past and Reinvent Microsoft

Newly-installed Microsoft CEO Satya Nadella has offered the first hint that he is ready and willing to ditch the Windows legacy and move Microsoft into a sustainable and relevant future. In a letter to employees, Mr. Nadella dropped the "devices and services" mantra of his predecessor, Steve Ballmer, and called Microsoft a "productivity" company for a "mobile-first and cloud-first world."

Microsoft CEO Satya Nadella

Microsoft CEO Satya Nadells
Source: Microsoft

From the letter:

More recently, we have described ourselves as a 'devices and services' company. While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy.

At our core, Microsoft 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.

This is momentous, and frankly it's made me think for the first time that Microsoft can reinvent itself. I have argued many times that Microsoft had allowed itself to become bogged down by its Windows legacy, and that the fear of losing that legacy was preventing the company from offering relevant tools for the future.

I am by no means sure that Satya Nadella can successfully change course for his tech behemoth, but the letter shows us he is at least willing to try.

"The day I took on my new role I said that our industry does not respect tradition," he wrote, "it only respects innovation. I also said that in order to accelerate our innovation, we must rediscover our soul – our unique core. We must all understand and embrace what only Microsoft can contribute to the world and how we can once again change the world. I consider the job before us to be bolder and more ambitious than anything we have ever done."

Compare that to the hogwash Mr. Ballmer continually tried to foist off on the world. All that nonsense about Windows everywhere and one experience across all devices [whether or not the devices in question are suited for one another]. As Time noted, Windows isn't even mentioned until the 23rd paragraph. Instead of obsessing about Windows, Satya Nadella wrote at length about how productivity is his company's key asset. From the piece:

Productive people and organizations are the primary drivers of individual fulfilment and economic growth and we need to do everything to make the experiences and platforms that enable this ubiquitous. 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.

I don't know that I'd personally care to hang my hat on productivity as the end-all, be-all, but it's so much better than pretending anyone actually cares about Windows. That willful denying of reality long ago cost Microsoft its claim to any kind of leadership in the tech industry.

Next: Righting the Ship

Righting the Ship


While all this is quite promising, there is one thing Mr. Nadella didn't address, and that's the negative influence sales and marketing have had on Microsoft since Bill Clinton was president. Microsoft is up to 100,000 employees, and the most recent number I've seen is that 30,000 of them are sales and marketing folks.

Steve Jobs believed that when a product company let the sales and marketing folks grow too large, innovation goes out the window. Protecting the cash cows that deliver the sales becomes more important than innovating, and no company has proven this to be true more than Microsoft.

The Surface Windows 8 TrainwreckMicrosoft, especially under CEO Steve Ballmer, was terrified of Windows becoming irrelevant, because Windows paid the bills and the bonuses. The result was nonsense like Windows 8 and Surface, both of which have been resounding flop.

Apple, on the other hand, is always ready to throw any product and any service under the bus to pursue something that is better. Microsoft must become willing to do the same thing if it wants to be an innovative powerhouse.

Mr. Nadella frequently mentioned focus, and he talked about re-organizing product development into smaller, tighter groups with fewer people making decisions. For instance:

Finally, every team across Microsoft must find ways to simplify and move faster, more efficiently. We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes. Culture change means we will do things differently.

Those are great things, and if he can do it, Microsoft could become formidable once again. At the same time, Mr. Nadella referenced Microsoft's Surface tablet as something more than an abject failure. In an interview with The Verge after his letter was published, Mr. Nadella said:

Take Surface Pro 3. I want you to say, "Look, I like this thing, because it's a tablet that can be a laptop, because I want to be able to listen to my music, I want to snap it to one side and I want to be able to do a Word document on the other side, I want to be able to use it for note-taking, use it for sketching."

This is worrisome because that's clearly not what many people say, think or want to say and think. For all his talk of change, there are plenty of signs that Mr. Nadella isn't willing to think too differently.

I hope that I am wrong about that, but without changing the culture and mind-set away from from protecting the cash cows—without the shift necessary to pursue something cool like Courier even though it threatens Windows—all this talk of change will be just that, talk.