14 DAY TRIAL // Microsoft’s CEO Satya Nadella has sent a new letter to company employees ahead of fiscal year 2016, explaining that they would go forward with the “One Microsoft” approach embraced ever since he replaced Steve Ballmer at the helm of the software giant.
But while 99 percent of the letter is made of inspirational words that are supposed to make Microsoft’s employees believe in Nadella’s new strategy, there are also several statements that might come with a hidden message and which could provide us with an early look at the company’s future.
“We will need to innovate in new areas, execute against our plans, make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value,” Nadella said in the letter (emphasis is ours).
Nadella hasn’t mentioned what those tough choices would be, but after reading the whole letter, it’s easy to notice that some products that Microsoft has been investing in for many years already are not called out by name. Two of them, Windows Phone and Surface.
Layoffs also planned
Basically, Windows Phone continues to hold a market share of around 3 percent despite Microsoft’s efforts, and with Windows 10 Mobile and plenty of new Lumia models, including flagships, coming this year, Redmond is very optimistic that it could finally manage to compete against Android and iOS.
Some say this could be Microsoft’s last attempt at the mobile market, but not in terms of software, but as far as hardware is concerned. Microsoft could continue working on the mobile operating system, but let partners develop devices, just like in the good old times. This way, Microsoft could shoot two birds with one stone: stop investing money in devices that have only slight chances to sell in high numbers and stop competing against its partners in the hardware industry.
A similar strategy could be adopted for the Surface tablet lineup as well, where Microsoft could finally stop competing its very own partners and fighting for the same customers.
But both such decisions are unlikely for now. Microsoft’s Surface Pro 3 is finally selling very well and market performance of the Surface lineup overall is growing (after a slow start with the Surface RT, that is), and the company has only recently completed the takeover of Nokia and launched its own Lumia brand.
What’s more, Microsoft still thinks that its own premium devices are the best pioneers for the capabilities of its software and services, so bringing out more phones and tablets could help showcase the other products.
Microsoft watcher Mary Jo Foley also says that some new layoffs are coming, but not as significant as those that the company announced after buying Nokia’s Devices and Services division. Redmond is yet to announce anything in this regard, but we should hear more on this in the coming months.
Whatever these tough choices will be, there’s no doubt that Satya Nadella is rebuilding Microsoft from the ground up and is now trying to correct the mistakes that his predecessor has made while at the helm of the company. How much time this could take is too early to tell, but it seems that it’s all going to be a painful process for Microsoft, employees, and part of its customers.