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   Technology StocksMicrosoft: The Devices and Consumer Segment


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From: Eric L1/28/2015 12:10:10 PM
1 Recommendation   of 154
 
You Tube: Microsoft Windows 10 Event January 2015 (Full 2:15 hours)



- Eric L. -

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From: Eric L6/17/2015 11:09:10 AM
1 Recommendation   of 154
 
Stephen Elop to depart Microsoft ...



>> Former Nokia CEO Elop Leaving Microsoft

Elop had run Microsoft’s hardware devices business; Windows exec Myerson to step in

Shira Ovide
The Wall Street Journal
June 17, 2015

wsj.com

Microsoft Corp. CEO Satya Nadella continues to put his stamp on the company, announcing Wednesday an executive shuffle that involves the departure of former Nokia Corp. chief Stephen Elop.

Mr. Elop was the biggest surprise departure in the executive shuffle. Two other Microsoft executives, Kirill Tatarinov and Eric Rudder, will, like Mr. Elop “leave Microsoft after a designated transition period,” the company said in a news release. Separately, Mark Penn, who had served in a senior strategist role, is leaving Microsoft as well.

Mr. Elop’s departure is the latest sign Microsoft is hitting the reset button on its struggling smartphone hardware business. The more than $9 billion purchase of Nokia’s handset business—a deal struck by Mr. Nadella’s predecessor Steve Ballmer in late 2013—was supposed to make Microsoft a relevant player in smartphones.

Instead under Mr. Elop’s leadership at Microsoft, the company’s Windows smartphones lost market share and bled red ink. The company recently said it planned to further cut costs at the smartphone business and other hardware units. Nokia already was targeted for thousands of job cuts in the biggest layoffs in Microsoft’s history, announced last year.

Microsoft’s hardware devices businesses, which Mr. Elop ran, will now be folded into a new division with Microsoft’s operating systems group. Terry Myerson, also an executive vice president, will lead the division. # # #

- Eric L -

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From: Eric L6/17/2015 11:28:54 AM
   of 154
 
Nadella's Latest 'Streamlining' (Leyyer to employees) ...

Satya Nadella email to employees on aligning engineering to strategy

From: Satya Nadella
To: All Employees
Date: June 17, 2015
Subject: Aligning Our Strategy & Structure

Team,

As we approach a new fiscal year, I’d like to share with you how we are aligning our structure to our strategy and the changes to our Senior Leadership Team.

Over the past year, I have said that Microsoft aspires to empower every person and every organization on the planet to achieve more. To do this, building the best-in-class productivity services and platforms for the mobile-first, cloud-first world is at the heart of our strategy, with three interconnected and bold ambitions:

• Reinvent productivity and business processes
• Build the intelligent cloud platform
• Create more personal computing

To better align our capabilities and, ultimately, deliver better products and services our customers love at a more rapid pace, I have decided to organize our engineering effort into three groups that work together to deliver on our strategy and ambitions. The changes take effect today.

Terry Myerson will lead a new team, Windows and Devices Group (WDG), enabling our vision of a more personal computing experience powered by the Windows ecosystem. We will combine the engineering efforts of our current Operating Systems Group and Microsoft Devices Group (MDG) led by Stephen Elop. This new team brings together all the engineering capability required to drive breakthrough innovations that will propel the Windows ecosystem forward. WDG will drive Windows as a service across devices of all types and build all of our Microsoft devices including Surface, HoloLens, Lumia, Surface Hub, Band and Xbox. This enables us to create new categories while generating enthusiasm and demand for Windows broadly.

Scott Guthrie will continue to lead the Cloud and Enterprise (C+E) team focused on building the intelligent cloud platform that powers any application on any device. The C+E team will also focus on building high-value infrastructure and business services that are unique to enterprise customers, such as data and analytics products, security and management offerings, and business processes. Today, we are also moving the development teams who build our Dynamics products to C+E, which will enable us to accelerate our ERP and CRM work even further and mainstream them as part of our core engineering and innovation efforts. C+E will work closely with ASG to ensure the end-to-end experience is cohesive across communications, collaboration and business processes.

Qi Lu will continue to lead the Applications and Services Group (ASG) that is focused on reinventing productivity. This group is leading the charge in building productivity services for digital work that span all devices and appeal to the people who use technology at work and in their personal lives. ASG has already made advancements in these areas, and the only change as part of today’s announcement is that the engineering efforts to build solutions for Education will move to ASG.

Changes of this nature require us to look at our leadership structure overall, and as a result a few Senior Leadership Team members will leave Microsoft at the conclusion of a transition period.

When Stephen Elop returned to Microsoft, he oriented MDG to create the best Microsoft experience through its devices, inclusive of hardware, software and services. He has been a strong advocate of the need to drive focus and accountability around the delivery of these experiences and has helped drive tighter alignment toward the ambition of more personal computing. With the structural change described above, Stephen and I have agreed that now is the right time for him to retire from Microsoft. I regret the loss of leadership that this represents, and look forward to seeing where his next destination will be.

Kirill Tatarinov is going to explore what’s next for him. Under Kirill’s leadership, the Dynamics business has grown to a nearly $2 billion business with an ambitious wave of products on the horizon. Perhaps most important though, Kirill and team have shown us that participating in a meaningful way in the CRM and ERP market opens up new opportunities we can uniquely take advantage of by bringing Dynamics into Microsoft’s mainstream engineering, sales and marketing efforts. I am very thankful for Kirill’s unswerving leadership in bringing Dynamics to this point and building a strong leadership team to carry it forward.

After more than 25 years at Microsoft, Eric Rudder has decided to try something new. Eric has played a number of key roles at Microsoft including founding and growing the Server and Tools business in its early days, leading Microsoft Research, and most recently driving our advanced technology and education efforts. I will deeply miss Eric’s passion, technical and business acumen, and keen intellect, and I appreciate all he’s done for Microsoft.

Lastly, a number of months ago, Mark Penn shared with me that he is planning to leave Microsoft in September to form a private equity fund, among other things. Over the years, Mark has leveraged his talents and insights on Microsoft’s behalf. From helping craft a Super Bowl ad and helping design new business and marketing models to his work in data analytics, Mark has helped me set the company on a new course. I’m thankful for the wise strategic counsel Mark has provided, and I look forward to seeing what he does next.

I’ve worked closely with Stephen, Eric, Kirill and Mark and have incredible respect for each of them and wish them well.

I’m counting on our Senior Leadership Team to inspire innovative products and services and lead excellent execution. Our competition and our customers don’t care about our organization structure — they care about innovation. While we are distinctly aligning our engineering structure and core capabilities, our ambitions are interconnected. Success requires all of us — and particularly the Senior Leadership Team — to work across boundaries as one Microsoft and in harmony with our partners. Here’s the new team effective today:

• Chris Capossela, Executive Vice President and Chief Marketing Officer (will now also take on responsibility for Dynamics and Education marketing)
• Kurt DelBene, Executive Vice President, Corporate Strategy and Planning
• Scott Guthrie, Executive Vice President, Cloud and Enterprise
• Amy Hood, Executive Vice President and Chief Financial Officer
• Peggy Johnson, Executive Vice President, Business Development (will now lead our partnerships with mobile operators around the world)
• Qi Lu, Executive Vice President, Applications and Services Group
• Terry Myerson, Executive Vice President, Windows and Devices Group
• Harry Shum, Executive Vice President, Technology and Research
• Brad Smith, Executive Vice President and General Counsel, Legal and Corporate Affairs
• Kevin Turner, Chief Operating Officer (will also now take responsibility for the Dynamics sales and partner organization)
• Jill Tracie, Chief of Staff

I’m certain that matching our structure to our strategy will best position us to build products and services our customers love and ultimately drive new growth. Please feel free to send any questions you have to one of the Senior Leadership Team members or me.

Looking forward to what we can do together.

Satya

# # #

- Eric L. -

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From: Eric L7/9/2015 8:32:36 AM
   of 154
 
Microsoft writes-off Nokia purchase and Lays-off more employees ...

>> Microsoft writes-off Nokia purchase with massive layoffs ahead of Windows 10

Most of ex-Nokia staff set to go bye-byes

Chris Merriman
The Inquirer
Wednesday July 08 2015

theinquirer.net

Microsoft has confirmed a major round of job cuts in its hardware (ie ex-Nokia) division.

The news, which arrived as speculation from The New York Times, has now been confirmed with the culling of a 7,800 roles, in addition to the 18,000 Microsoft cuts already made last year.

This night-of-the-long-knives is centred in the hardware division, which reflects the already acknowledged shortfall in the success of Microsoft's Lumia (Nokia) and Surface brands.

Neither has turned out to be the disruptive force that that the company had hoped and it now looks as if the company is preparing to take a step back from design, instead buying in products from companies like, believe it or not, Nokia, which recently confirmed a return to the mobile game.

In an e-mail to employees today, CEO Satya Nadella said, "We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family.

"In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."

Steven Elop, the Nokia CEO who came as part of the $7.2bn deal, left the company last month as the Windows Phone platform continued to lose ground to Android and iOS.

In addition, the company has confirmed that it will write off $7.6bn in the next quarter, reflecting the failure of the purchase - nearly half a billion dollars more than it paid.

Microsoft recently divested its display advertising business to AOL, with the transfer of 1,200 roles, but it is expected that many of these too will be made redundant once the merger is completed.

These employees have been given until 16 July to accept their tenure with AOL come what may.

Nadella gave a rallying cry to his troops in the form of an email in June, but warned that the company would have to "make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value". That prediction has most definitely come to pass.

The news comes three weeks out from the start of a new era for Microsoft's flagship Windows product as the company moves to an as-a-service model, removing large swathes of the existing licensing that has become hugely unpopular as free alternatives such as Chrome OS and Linux become more palatable.

Microsoft failed to crack the 20 percent barrier with its current Windows 8, and there was much criticism of the hybrid Metro/modern/tiled/shambles UI.

Today's announcement will act as a profits warning to shareholders ahead of fourth quarter earnings which will be declared on July 21st. µ # # #

- Eric L. -

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From: Eric L7/9/2015 9:01:02 AM
   of 154
 
Microsoft Winding Down Windows Phone ...

>> Microsoft and Windows Phone: What went wrong, and where can they go from here?

Microsoft says it still wants to make phones - but what does the future look like for Windows Phone and Lumia devices?

Steve Ranger
ZDNet
July 9, 2015

zdnet.com

"It's a bold step into the future - a win-win for employees, shareholders, and consumers of both companies. Bringing these great teams together will accelerate Microsoft's share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services," said Steve Ballmer, Microsoft's then-CEO, as he announced his plan to buy Nokia's phones business in September 2013.

"Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution," Ballmer went on. Microsoft paid €5.44bn for Nokia's devices and services business, and as part of the deal 32,000 Nokia staff joined Microsoft. The idea: the combination of Nokia's design brilliance with Microsoft's software engineering could create a smartphone business to take on the might of Apple and Google.

But yesterday, less than two years after the acquisition was announced and only 15 months after it was completed, Microsoft announced it is cutting 7,800 jobs, mostly in the phone business. The cuts come on top of a round of 12,500 redundancies that affected former Nokia employees. Microsoft is also taking a $7.6bn writedown on the acquisition of the Nokia devices and services business, plus a $750m to $850m restructuring charge. It's hard to think of a clearer sign that the acquisition of Nokia's smartphone business has failed.

And while Microsoft CEO Satya Nadella said this week he is "committed to our first-party devices including phones," it does not sound like a ringing endorsement. According to Nadella, Microsoft's strategy will focus on three areas: "management, security, and productivity" for business customers, "communications services" for value phone buyers, and "flagship devices" for Windows fans.

It's worth pointing out that two of those three elements don't necessarily involve Microsoft actually building Windows Phone devices anymore. Nadella's remarks suggest that Microsoft may reduce its involvement in phones even further in future.

"In the near term, we will run a more effective phone portfolio... In the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly. Our reinvention will be centered on creating mobility of experiences across the entire device family including phones," he said.

In an email to staff on Wednesday, Microsoft COO Kevin Turner dropped some hints about the future of Microsoft's phone business. He said the company would have to make phones faster, but also said it would focus on the channels and markets that offer the best returns. "This is a similar approach to the one we have taken with Surface, which has been very successful," he said - but while the Surface hybrid PC has been succesful, at least if you're feeling particularly generous, it is a much more modest business than the smartphone empire Microsoft once planned to build.

So what went wrong? Part of the problem is that the tie-up between Microsoft and Nokia was based on weakness, not strength. Microsoft had been trying to persuade manufacturers to use its Windows Phone operating system on their phones, but with little success. Similarly, Nokia had found the competition from Android and iOS too strong - Nokia CEO Elop memorably described Nokia as standing on a "burning platform" by adhering to its Symbian OS.

Putting together Nokia's smartphone hardware and Microsoft's software and marketing power seemed to be a reasonable bet, but it was by no means a certain one.

But the phones' hardware and software was not the problem: Nokia's long history of creating elegant hardware meant that the Lumias won plaudits for smart design. And, after a few false starts, Windows Phone with its tiled user interface seemed far cooler than iOS. Nonetheless, together, they just didn't sell enough phones.

In its best-ever quarter Microsoft managed to sell 10.5 million Lumias (likely weighted towards the cheaper models). To put those numbers into context, Apple sold 61 million iPhones in its most recent quarter. Today, IDC puts Windows Phone market share at 2.7 percent worldwide. For Microsoft, that's just nowhere near good enough.

Partly that was because Android and iOS were well entrenched by the time Windows Phone had matured, but also because Windows Phone has never built up the same app ecosystem the other two operating systems did. This meant that some top apps would not arrive on Windows Phone for a long time, if they ever arrived at all.

Microsoft's mobile strategy has at times been hard to fathom too. It has favoured a scattergun approach, launching an array of different smartphones and then waiting to see which ones find favour - in contrast to the measured approach of Apple.

Lumias found most of their success at the entry level. Indeed, there hasn't really been a 'flagship' Lumia (a clear top of the range device) released for a while. In the meantime, Microsoft has been experimenting with putting its services onto iOS and Android devices instead (Nokia even testing out an Android device) which may have given some customers one less reason to buy its hardware.

So what of the future of Microsoft's mobile strategy? # # #

- Eric L. -

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From: Eric L7/9/2015 10:08:34 AM
   of 154
 
Microsoft Phone Hardware Restructuring Press Release & AAWP comments ...

We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family.” - Satya Nadella -

>> Microsoft announces restructuring of phone hardware business

Microsoft News Center Press Release
Redmond, Wash.
July 8, 2015

news.microsoft.com

Microsoft Corp. today announced plans to restructure the company’s phone hardware business to better focus and align resources. Microsoft also announced the reduction of up to 7,800 positions, primarily in the phone business. As a result, the company will record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of approximately $750 million to $850 million.

Today’s announcement follows recent moves by Microsoft to better align with company priorities, including recent changes to Microsoft’s engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and shifts in Microsoft’s display advertising business that enable the company to further invest in search as its core advertising technology and service.

Today’s plans were outlined in an email from Microsoft CEO Satya Nadella to Microsoft employees.

“We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family,” Nadella said. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”

Microsoft will record a charge in the fourth quarter of fiscal 2015 for the impairment of assets and goodwill in its Phone Hardware segment, related to the NDS business. This charge has no impact on cash flow from operations and is nondeductible for income tax purposes. Based on the new plans, the future prospects for the Phone Hardware segment are below original expectations. Accordingly, the company concluded that an impairment adjustment of its Phone Hardware segment assets and goodwill of approximately $7.6 billion is required.

The actions associated with today’s announcement are expected to be substantially complete by the end of the calendar year and fully completed by the end of the company’s fiscal year.

More information about these charges will be provided in Microsoft’s fourth-quarter earnings announcement on July 21, 2015, and in the company’s 2015 Annual Report on Form 10-K.

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world and its mission is to empower every person and every organization on the planet to achieve more. # # #

>> Microsoft axes more jobs, phone portfolio to be more 'focussed'

Steve Litchfield
All About Windows Phone
July 8th 2015

allaboutwindowsphone.com

In an announcement, Microsoft CEO Satya Nadella has made yet another 'tough' round of job trimming at the software giant, resulting in almost 8,000 job losses (from around 100,000 total), many of them in the phone division (i.e. producing feature phones and Lumias). See below for the release text and comment.

From the press release:

Microsoft Corp. today announced plans to restructure the company’s phone hardware business to better focus and align resources. Microsoft also announced the reduction of up to 7,800 positions, primarily in the phone business. As a result, the company will record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of approximately $750 million to $850 million.

Today’s announcement follows recent moves by Microsoft to better align with company priorities, including recent changes to Microsoft’s engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and shifts in Microsoft’s display advertising business that enable the company to further invest in search as its core advertising technology and service


Today’s plans were outlined in an email from Microsoft CEO Satya Nadella to Microsoft employees:

We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family,” Nadella said. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.

Given the savage cutting Nadella has been doing all round since he took over from Steve Ballmer's bloated-and-getting-bigger enterprise, all this isn't that surprising, with the usual caveats that it's hard not to feel very sorry for the employees concerned. Manufacturers across the world are learning the lesson that a device portfolio that's too weighty is unsustainable in 2015 - just look at HTC, at Samsung, and others. And there's far too much phone hardware (mainly at the bottom end) for Satya's liking.

Add to that the considerable overlaps and inefficiencies that were still hanging around from one enormous company (Microsoft, 120,000 employees before today?) integrating another big one (Nokia Devices and Services, about 25,000 employees originally mentioned for transfer), and in the competitive world of 2015, more jobs had to - sadly - go.

The mention of 'first party family' and 'focussed phone portfolio' both imply, of course, that there will still be Lumia smartphones running Windows 10 Mobile, but from a confusing range of over 20 models at the moment, I'd expect things to be simplified to just a handful.

In the revised release text, Satya and the team added:

"We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love."

Which is interesting, only necessarily guaranteeing Windows 10 Mobile hardware at the top end. Certainly the current mass of budget offerings isn't bringing in huge success. My best guess at a simplication of the range would be, at the budget end (think 640), lower-mid range (think 640 XL) and top end (think 940 and 940 XL, these are dead certs in my opinion), all complementing other first party hardware such as the Surface 3 hybrids and tech oddities like Hololens and Surface Hub. And hopefully less phone variants and less pandering to networks around the world. Just produce some no compromise great hardware to run Windows 10 Mobile on and let the market decide.

Further clarifications came from Microsoft's COO Kevin Turner:

"Going forward, we will focus on building the very best Windows phones on a quicker timeline. We will also focus on the channels and markets that offer the best returns. This is a similar approach to the one we have taken with Surface, which has been very successful. Phones remain a critical component of the Microsoft device portfolio and an important piece of our mobility strategy, but a restructuring is in order."

Phrases like 'the very best' and 'a restructuring' do lend more credence to a smaller range of smartphones that's biased, if anything, towards the top end, rather than the current mélange, which is budget-heavy. And, as a bonus, with less outright budget Lumias around, there may even be a chance for other Windows 10 partners to come up with decent sales, since they sit more naturally at the bottom end of the specification scale. # # #

- Eric L. -

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To: Eric L who wrote (134)7/9/2015 10:57:02 AM
From: zax
1 Recommendation   of 154
 
Bloomberg says Microsoft expects to "make its own phones for at least the next two years"
Written by Hammad Saleem on Thursday, Jul 9th, 2015 at 02:47AM @hammadsalim

winbeta.org



Yesterday was a little shocking for Microsoft as the company let go of 7,800 employees globally, and wrote down billions of dollars related to the acquisition of Nokia's devices and services division. The company acquired Nokia last year for over $7 billion and things didn't get better with Windows Phone in the competitive mobile space dominated by Android and iOS. Speculations also arose hinting at the demise of Windows Phone after the announcements, but it seems that may not be the case.

According to a new report from Bloomberg, Microsoft expects to manufacture phones for at least next two years, citing people familiar with the plan who wish to remain anonymous. Bloomberg reported,

"The company expects to make its own phones for at least the next two years, said a person familiar with Nadella’s plans who asked not to be named because the plans aren’t public. Microsoft will try to play up its strengths in the markets it has chosen, such as corporate security and collaboration software for business customers."

Microsoft is also expected to change its strategy as well. Instead of selling as many phone as it can, the company will focus on three categories: business phones, high-end models and value phones. The budget-friendly Windows Phones, such as the Lumia 520, has received its fair share of success and is the best-selling Windows Phone handset.

The report says that the Redmond-based company will scale down its business by launching one or two handsets in each of the three categories, as well as say exit carrier relationships and countries where the company's handsets didn't show much growth. As you know, the company has a handful of versions of a same handset in different locations, an approach which is expected to discontinue in the future. The company is expected to adopt the Surface approach, which is to "reduce the target area and try to stand out from the crowd in a smaller field."

It's been a while since Microsoft released a new flagship device. Reports suggest that Microsoft is working on high-end Windows Phone handset which is expected to see the light of the later this year, possibly at the IFA 2015 in Berlin. Rumors hint at the Lumia 940 being in works, but there's no official word from Microsoft about its launch. Windows 10 Mobile is expected to see the light of the day later this year, possibly in September/October.

Lets see what the future holds for Windows Phone.

winbeta.org

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From: Eric L7/9/2015 11:43:25 AM
   of 154
 
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. -

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To: Eric L who wrote (134)7/10/2015 4:16:49 PM
From: Jurgis Bekepuris
1 Recommendation   of 154
 
What went wrong? Nadella was not a mobile device CEO, he pretty much gave up on that part of the company from the outset. Nokia-Microsoft mobile devices needed a different Microsoft leadership in order to succeed.

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To: Eric L who wrote (134)7/10/2015 5:49:38 PM
From: zax
   of 154
 
Hey Eric,
Microsoft Winding Down Windows Phone ...
"Winding Down Windows Phone" doesn't seem like appropriate language.

Nadella stated, "I am committed to our first-party devices including phones,"

They certainly are paring back manufacturing and are indicating they no longer wish to be in a position of competing handset for handset against Chinese handset manufacturers in the low end in hundreds of markets. But I believe your language implies something other than what anyone has stated.

Patrick Moorhead, principal analyst at Moor Insights & Strategy, thinks Microsoft will continue with phones for now in a bid to build out its hardware/software ecosystem. "Microsoft will have something very similar to where the Surface line is now," he said. "The idea will be to create inspiring hardware that motivates their ecosystem. They'll go after the 'halo' effect."

Jack Gold, principal analyst at J. Gold Associates, sees it the same way. "The issue for me was always, if Microsoft owns Nokia, why would others want to make Windows phones? You're basically telling your OEMs, 'Compete directly with us,'" Gold said.

Regards,

-- Zax

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