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Nadella Charts Microsoft's Future: 5 Key Points

Microsoft CEO Satya Nadella distances himself from predecessor Ballmer's vision, pins company's future on a "mobile-first, cloud-first" agenda.

After Ballmer: 8 Execs You Love To Hate
After Ballmer: 8 Execs You Love To Hate
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In a 3,000-word letter to his employees, Microsoft CEO Satya Nadella on Thursday distanced himself from predecessor Steve Ballmer's "devices and services" game plan. Nadella also called for sweeping cultural changes at Microsoft, including possible organizational shakeups, as it pursues his "mobile-first, cloud-first" agenda. What does Nadella's missive mean for the company and its customers? Here are five key takeaways.

1. "Devices and services" are out, "productivity and platform" are in.
Ballmer's critics said his "devices and services" strategy was too influenced by Apple's vertically integrated, hardware-reliant approach. In his letter, Nadella said the "devices and services" focus was "helpful" in accelerating Microsoft's strategic transition toward mobility and the cloud, but that the company must now turn its focus to its unique strengths. "At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world," Nadella wrote.

At a high level, then, if Ballmer's tactics hedged closer to Apple's strategies, then Nadella's plans hedge closer to Google's. That is, Microsoft is more interested in attracting users to its cloud services than to any particular device, such as the Surface.

2. Microsoft's unique strengths involve the cloud and productivity, but consumers are still important.
In expounding on Microsoft's unique strengths, Nadella referenced not only the company's heritage in productivity and management products, but also how this skill and expertise has translated to the cloud. He called Microsoft's cloud OS, which supports its hybrid cloud offerings, the company's "largest opportunity," for example. He also made repeated references to, not only existing products such as Office 365, but also upcoming offerings such as Power BI Q&A, which combines business intelligence tools with user-friendly natural language queries.

[Windows 8 has been divisive, but will Microsoft turn things around with Windows 9? Read Windows 9: Desktop Resurgence?]

"Cloud" and "productivity" suggest Microsoft's core enterprise customers more than the iOS- and Android-loving consumers. Some Microsoft shareholders criticized Ballmer's willingness to dedicate so many resources to consumer projects, so some of the company's past critics will appreciate Nadella's business focus. Nevertheless, Nadella made clear that consumers are still important to the company's strategy.

Microsoft will consider every user to be a potential "dual user" likely to rely on a device for both work and play, Nadella said. He promised not only that Microsoft will deliver more personalized experiences to both business and consumer roles, but also that the company's tech would keep the two roles separate and secure.

"We're really in the infant stages of the mobile-first world. In the next few years we will see many more new categories evolve and experiences emerge that span a variety of devices of all screen sizes," Nadella wrote. "Microsoft will be on the forefront of this innovation with a particular focus on dual users and their needs across work and life."

3. Microsoft won't stop making devices, including the Xbox.
Nadella evidently doesn't consider devices to be as strategically vital as Ballmer did, but the new CEO still thinks projects like

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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VB6 programming
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VB6 programming,
User Rank: Apprentice
7/19/2014 | 11:54:39 AM
Open source the VB6 programming language
18,000 layoffs. Who would now choose to use Microsoft development tools ?  They may not exist next week or next month.

Satya Nadella must reply to the open letter requesting the open sourcing of the VB6 programming language.  He should open source Visual Basic 6 immediately, while there is still time.

 

 
moarsauce123
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moarsauce123,
User Rank: Ninja
7/13/2014 | 7:52:48 AM
Only developers should test code
Nadella also suggests that dedicated QA will go away. There will only be developers that write and test code and applications. That alone shows that Nadella is totally clueless! QA requires a very specific skill set that I have yet to find in most developers I worked with. The total attention to detail and always thinking about what could happen rather than what should happen is a quality that only experienced testers bring to the table. Yes, QA needs to know how coding works and at times needs to code as well for automation, but that is a different ball of yarn and one that can be very much abstracted.

Maybe Nadella thinks that applying patches for patches that patched something is 'productivity'. As if Microsoft can get away with delivering even worse quality than they already have. If anything, they need more testing and above all more user advocates that are taken seriously.
anon2140566722
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anon2140566722,
User Rank: Apprentice
7/12/2014 | 1:30:20 PM
Re: Play to your strengths
I would recommend that MS enter the "cloud" arena gingerly. The cloud will have some usage but it will never be all encompassing nor ubiquitous. The overwhelming concerns over privacy, security, reliability and accessibility will continue to haunt the cloud and more so down the road. The cloud is a hackers wet dream. With laptops coming with TB hard drives, TB memory sticks (are available), why would I want to use the cloud? Internet speeds vary considerably across the land and upload speeds remain very poor for most. Data plans are becoming more and more expensive and net neutrality is gone. I for one, will continue to run locally as I always have.
anon2140566722
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anon2140566722,
User Rank: Apprentice
7/12/2014 | 1:18:56 PM
Nadella and MS future
I recommend highly that the new CEO wake up and soon. Many businesses and users will NOT flock to the "cloud" nor Office 365. MS blew it with Millenium, Vista and now Win 8. You would think they would learn from history. Even though XP is still being used, the most predominant Windows operating system is Win 7 Pro and Enterprise. I have yet to encounter anyone upgrading to Win 8. Hello. I would hope that MS is putting some careful thought into Win 9. Most larger businesses, corporations, professionals, power users and high end gamers are out there waiting to see what direction MS will take. I would recommend strongly that MS Office Pro remain available for individual/company purchase. There are too many instances where having to be connected (Azure & Office 365) is out of the question or simply not an option. MS needs to get back to its roots and rebuild from there. No one can be all things to everyone. And stiffle that fool from Nokia as there is NO post PC era. Reminds me of Tami Reller, Ballmer's Ex VP who said the "future was the touch screen". Right away faux tech writers predicted the demise of the keyboard and mouse. Hasn't happened.
Darkpr0fit
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Darkpr0fit,
User Rank: Apprentice
7/12/2014 | 12:32:15 PM
Re: Play to your strengths
Right now that is exactly what Microsoft should do. Its future lies in the areas it performs well in, namely support and software. Too many companies try to wade in all fields, and compete with every technology and company in the market. A good example of this is hp. Ballmer tried too hard to spread out Microsoft into all areas only to thin it out. This business practice hurt Microsoft.
JohnM587
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JohnM587,
User Rank: Strategist
7/12/2014 | 9:25:12 AM
Re: Trying Too Hard?
Indeed Nadella is fumbling around aimlessly in highly competitive race to the bottom non consumer pricing commodity product categories. We all know Microsoft has long lost the consumer market. This is definitely the end of Microsoft profitability. I guarantee you that heads will roll after Q4 results. Nadella was strictly hired to be the fall guy. If you own this stock you'd better sell really quick.
JohnM587
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JohnM587,
User Rank: Strategist
7/12/2014 | 9:25:04 AM
Re: Trying Too Hard?
Indeed Nadella is fumbling around aimlessly in highly competitive race to the bottom non consumer pricing commodity product categories. We all know Microsoft has long lost the consumer market. This is definitely the end of Microsoft profitability. I guarantee you that heads will roll after Q4 results. Nadella was strictly hired to be the fall guy. If you own this stock you'd better sell really quick.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
7/11/2014 | 6:24:02 PM
Escaping the Apple envy
Satya Nadella is trying to build on Microsoft's existing strength in the enterprise data center and its own cloud data centers, as well as in devices and on the desktop. This is much smarter than just succumbing to Apple-envy. Ballmer with his preoccupation with touch in Windows 8 and Surface seemed to have a very severe case. 
Thomas Claburn
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Thomas Claburn,
User Rank: Author
7/11/2014 | 4:10:32 PM
Re: Play to your strengths
If Microsoft retreats from hardware, that's good news for Apple. Apple will remain the only vertically integrated consumers hardware, software, and services platform company. And it will have an easier time defending its turf as a result.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
7/11/2014 | 2:54:01 PM
Play to your strengths
Though the message is still pretty vague, it sounds like the beginning of the end for Microsoft's efforts at attracting consumers through hardware. Good thing. Ballmer was chasing a ghost there. Nadella realizes Microsoft needs to really zero in on its strengths: software, the cloud, and the enterprise.
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