Microsoft CEO Satya Nadella Just Rejected Steve Ballmer's Big Plan
Former CEO Steve Ballmer had a vision for Microsoft that involved chasing Apple's business model.
Ballmer had declared Microsoft to be a "devices and services" company (devices came first).
On Wednesday, Nadella firmly rejected that direction.
Nadella sent out a novella-size email to his employees (nearly 3,200 words!) that described a new direction: to become a "productivity and platforms" company.
Instead of becoming another Apple - a company bent on controlling every part of the tech it sells - he's now looking to become another Google - a company that builds devices as state-of-the-art examples with the real goal of selling more cloud services.
To recap: In 2012, Ballmer abandoned one of Microsoft's core philosophies and announced that Microsoft would be building its own PC, the Surface. That for the first time put Microsoft in direct competition with its PC partners. In the months that followed, he reorganized the company's employees and spent $7.2 billion to acquire the device manufacturing business of Nokia (its second-largest acquisition ever, after his $8.5 billion purchase of Skype).
On Wednesday, to mark the start of Microsoft's fiscal 2015 year, Nadella told employees that he was ditching the "devices and services" mantra:
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.
Instead "productivity" and cloud will become king:
We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more. ...
Our cloud OS represents the largest opportunity given we are working from a position of strength.
Microsoft has been struggling to find a new mission for itself since it achieved its initial one, which was "putting a PC on every desk and in every home."
He explains that he wants Microsoft to focus on the person using the device, not on the company's goal of locking people into using Microsoft products.
He sees the company building the technology like the movie "Her" where computers intelligently do tasks for us, saving us time.
We will reinvent productivity for people who are swimming in a growing sea of devices, apps, data and social networks. They will ask questions naturally and have them answered with insight from Power Q&A. They will conquer language barriers and change the world with Skype translator.
... They will be built for other ecosystems so as people move from device to device ... - it's one way we keep people, not devices, at the center.
He's not talking about abandoning Microsoft hardware manufacturing plans altogether, far from it. With the deal recently closed, he's stuck with Nokia for now.
Instead he wants to use Microsoft's device manufacturing units to "develop new categories" of devices. This is similar to how Google views its home-grown hardware, like its Pixel touchscreen Chromebook.Meanwhile, Nokia's mission will be to focus on Windows phones - not, for instance, pushing into areas of interest to its PC partners, such as Windows tablets.
We will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition.
This can't be comforting to the 25,000 new employees added to the payroll from the Nokia acquisition, who are still waiting for word about if there will be any layoffs.
They won't be the stars of a new device-centric Microsoft anymore.
While a lot of this vision sounds really wonderful, it's one thing to talk about it, another to execute. Anyone who has spent much time using apps like Apple's Siri or Microsoft's Cortana know that they aren't always as helpful as their makers envision them to be.