Microsoft's Mobile First, Cloud First Strategy, Explained
Microsoft CEO Satya Nadella's plan to juggle Windows, cross-platform services, and the Internet of Things is coming into focus.
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After laying low during the first seven weeks of his tenure, Microsoft CEO Satya Nadella made four high-profile appearances in April: the Office for iPad introduction, the company's Build conference; the launch of Microsoft's new data platform; and Thursday's earnings call.
Nadella quickly established pet phrases that include "ubiquitous computing," "ambient intelligence," and other broad references to a future in which almost all interactions are digitized and turned into useful insights. The comments were initially abstract but iteratively gained definition with each event. Bit by bit, Nadella's "mobile-first, cloud-first" strategy has come into focus.
Nadella's predecessor, Steve Ballmer, established a "devices and services" agenda. In a way, Nadella's goals aren't so different. "Mobile" replaces "devices" and refers not to smartphones or tablets, per se, but to a recognition that computers increasingly come in varied shapes and sizes.
Mobility is about "experiences spanning a variety of devices, not about any one form factor that has a certain share position today," Nadella said Thursday. "As we look to the future, what are the set of experiences across devices, some ours and some not ours, that we can power through experiences that we can create uniquely?"
Microsoft CEO Satya Nadella's strategies are coming into focus.
"Cloud," meanwhile, replaces "services" and provides the infrastructure to keep the devices connected, and to support the services those devices consume.
Nadella isn't just reheating what Ballmer already cooked. The new CEO immediately struck his own tone as a public figure, replacing Ballmer's trademark salesmanship with allusions to TS Elliot and Nietzsche. Nadella's strategy is more nuanced than his predecessor's. But it's also more complex, built on tactics that could conflict as easily as cohere.
Take Windows. Microsoft announced this month that Windows licenses for smartphones and most tablets are now free. Some called the move Microsoft's concession that Windows cannot compete with Android for OEM loyalty. But to hear Nadella, this thinking is short-sighted.
Windows once targeted only PCs but now addresses a market that also includes tablets, smartphones, the Xbox, and the Internet of Things (IoT), the CEO pointed out Thursday. "In a world of ubiquitous computing, we want Windows to be ubiquitous," he said. "It's not one price or business model. It's actually a market expansion opportunity."
Free Windows licenses factor into Nadella's plan to make Windows "ubiquitous."
For user-facing devices, in other words, Windows boasts a familiar interface that translates across screen sizes, and on the back end, the OS is intimately tied to Microsoft's wealth of services and datacenter products. For developers, Nadella argued, this means Windows offers the largest addressable market, especially because so much code can now be re-used across apps for multiple device types.
But it's not that easy. Windows 8.1 adoption is still mediocre, and the research firm IDC expects Windows Phone 8.1 OEMs to ship only one device this year for every four iPhones and every 20 Android handsets. Microsoft is playing from far behind and has been for some time. That's why corrective measures such as free licenses became necessary.
As far as Nadella's concerned, the lost licensing revenue amounts to an investment in future ecosystem growth. If computers are everywhere, Windows needs to be everywhere. The company's mobile market share is what it is. If that means Microsoft needs to give away Windows, so be it. Because the Windows family will increasingly rely on its breadth across devices, Nadella believes holistic ecosystem health is more important than individual licensing policies.
Still, as much as Nadella's touted Windows, he's dedicated even more attention to cross-platform strategies, highlighted by Office apps for iPads and the concurrently announced Enterprise Mobility Suite. Ballmer resisted such strategies, ostensibly to protect Windows. Nadella's new direction has garnered praise, but it's also where would-be contradictions creep in.
Nadella wants Microsoft services such as Office 365 to run on as many devices as possible -- Windows machines, Macs, and iPads today; Android slates later; and then whatever else becomes popular. He also wants IT to use
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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