Microsoft's Vision or lack of same ...
"Microsoft's vision is to be on every screen you use. But sometimes, that vision cracks a little."
... or a lot.
>> Microsoft is having an identity crisis
Seth Fiegerman
Mashable
July 9 2015
mashable.com
Microsoft's vision is to be on every screen you use. But sometimes, that vision cracks a little.
On Wednesday, Microsoft announced taking a staggering $7.6 billion writedown for Nokia's handset business, which it officially acquired just more than a year earlier for $9.5 billion with the goal of supercharging its position in the competitive smartphone market.
Microsoft won't kill off its flagship Windows phones, but it is slashing a big part of its commitment — cutting much of the staff that produced these devices and changing its strategy to focus on apps and the Windows platform rather than hardware.
The move is a familiar one for Microsoft. Build or buy your way into a promising market. Then retreat or re-tool as it becomes painfully apparent that it's just not working out. Microsoft killed the Zune that failed to rival the iPod. It took a $900 million charge related to the Surface RT tablet that was designed to compete with the iPad. And it bet big on smartphones only to walk back its investment as it remained far behind Apple and Google.
Under the leadership of Microsoft's ebullient former CEO Steve Ballmer, the company often acted like the friend arriving at a party late only to find the other guests had already moved to a new location.
The history of sudden pivots has created the impression that Microsoft is having an identity crisis.
Insiders rush to defend the company's strategy of quick changes. The staff cuts and massive writedowns are framed as marking an end to that era of excess rather than the continuation of old missteps. It comes amid a broader strategy shift under Satya Nadella, who took over as CEO early last year after the Nokia deal had been agreed upon, to trim the fat from a technology company infamous for trying to do everything and too few of those things well.
"They are still rebuilding their identity," says Frank Gillett, an analyst with Forrester Research. At one time, he says, Microsoft was closely identified with office productivity tools for desktop; now it wants to increasingly be known for its cloud services as well — while spending billions to buy the game Minecraft and acquiring a suite of smartphone applications. "They are working to articulate what that value proposition is to the individual and the business."
The newly defined mission, repeated in interviews and written statements by Nadella, is to "reinvent productivity." But Microsoft has yet to fully translate that vague mission of the average consumer. Indeed, even analysts and some former employees we spoke with admitted to some murkiness about the company's grand vision and identity.
Says Gillett: "They don't have nearly the strength with the individual today that Google and Apple do."
In search of relevance — and profitability — in the post-PC era
Microsoft may have a method to its madness: It was always trying to catch up. Now it's trying to cleanup and present a more coherent business.
"Under Nadella, they are fine-tuning a strategy to only focus on things that they know will be profitable," says Tim Bajarin, an analyst with Creative Strategies. That boils down to three key areas: Office 365, its cloud platform Azure and Windows 10. Other sections like Bing, said to finally be nearing profitability after six years, are shedding load to ensure they stay profitable.
Chasing profitability, while a sound pitch to investors, is hardly a motivating or defining vision for customers.
To win over new users and stay relevant, Microsoft is resorting to its old trick of acquiring its way to stronger footing, albeit this time with smaller deals. In recent months, it has effectively bought its way onto the homescreens of iPhone and Android users by acquiring popular applications like Acompli, Wunderlist and Sunrise.
Microsoft wants to be where the people are and it seems to have recognized the people are not usually on Microsoft phones. Hence making its iconic suite of Office applications available on competitors' operating systems.
Some might call it savvy; others might call it an act of desperation. Microsoft is intent on placing trapdoors in other mobile operating system so that users fall into its ecosystem almost without knowing it: through Sunrise, through Acompli, through older acquisitions like Skype, and the rest. # # #
- Eric L. - |
