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Microsoft: 9 Best Moves Of 2014

After a rocky 2013, Microsoft bounced back this year. Here's what worked.

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For Microsoft, 2014 has been a terrific year. The company's stock reached its highest levels in a decade. Its overall financials are strong despite ongoing weak spots, such as consumer demand for PCs. Microsoft is releasing new and intriguing products at a faster pace than ever, especially in the cloud. Even Surface sales are up.

Compare this picture to the one Microsoft faced in 2013. The company spent the second half of the year licking its wounds, which included a near-$1 billion write-down on unsold Surface inventory as well as poor Windows 8 reviews and crashing PC sales. Rumors that shareholders were tired of CEO Steve Ballmer swirled, and, coincidentally or not, Ballmer announced in late summer that he was stepping down. As 2014 began, many commentators argued that Microsoft needed to bring in an experienced outsider to rehabilitate the dysfunctional culture Ballmer was perceived to have built.

Microsoft has left behind some of that tumult but challenges remain. The company absorbed thousands of talented Nokia employees, but no one's excited to see them dedicate all their time to low-budget smartphones. It's unclear if revenue from Microsoft's cloud and services businesses will scale fast enough to counter dropping revenue from consumer Windows licenses. And so on.

Even so, Microsoft has come a long way in a short time. How did so much change so quickly? Here are nine of Microsoft's best moves from 2014.

1. Satya Nadella became CEO.
Nadella, a longtime Microsoft veteran, has generally defied critics who said an insider would only perpetuate what Ballmer established. The new CEO has shown a willingness to blaze his own trail, such as establishing a more open dynamic with customers and partners, and repositioning Windows as a supporting asset in a cross-platform, mobile, and cloud-focused game plan.

Microsoft CEO Satya Nadella
Microsoft CEO Satya Nadella

Nadella's made a few missteps, such as a high-profile and terribly articulated comment about gender pay. He'll also face tough challenges in 2015, such as convincing all the customers who've ignored Windows 8 that they should upgrade to Windows 10. But on the whole, Nadella led the Microsoft charge in 2014, which makes his ascension to CEO one of the company's best moves of the year.

2. "Devices and services" became "productivity and platforms."
Critics blasted Ballmer's "devices and services" mantra as tinged with Apple envy and impractical for Microsoft's enterprise strengths. Under Nadella, Microsoft continues to make devices, including pure consumer plays such as the Xbox. But the new CEO has made clear that these are supporting assets that draw users toward new technologies and services, not core assets in the sense that Ballmer seemed to envision.

Instead, Nadella has called Microsoft a "platforms and productivity" company whose software products and cloud infrastructure move with users across devices and OS ecosystems. Examples of this new focus include new cross-platform Office 365 apps that use machine learning to make productivity more social and personalized, such as Clutter and Delve. How it all shakes out remains to be seen, but Microsoft looks as if it's building its own innovative identity again, instead of just reacting to more agile and visionary peers.

3. Windows 10 drops the hubris and brings back the Start menu.
With Windows 8, Microsoft took some calculated risks -- namely, that it held enough leverage over its customers to force them to accept Win 8's tile-based UI. This strategy backfired, but with Windows 10, Microsoft appears to have learned its lesson.

Windows 10 has a Start menu. But does it also represent a more open dialogue between Microsoft and customers?
Windows 10 has a Start menu. But does it also represent a more open dialogue between Microsoft and customers?

Some of the reasons for optimism are obvious: The Start menu is coming back; and Microsoft is finally implementing useful features that competing OSs offer, such as virtual desktops, etc. But beyond new features and UI tweaks, Microsoft is listening to customers. With

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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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Thomas Claburn
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Thomas Claburn,
User Rank: Author
12/15/2014 | 4:55:39 PM
Re: Start menu
It's a bit sad that the Start menu inspires such passions. There's much more to Windows than that.
Laurianne
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Laurianne,
User Rank: Author
12/15/2014 | 12:50:31 PM
Start menu
Ironic that we are talking about the Start menu's reappearance in the catgeory of best moves. Maybe we should do a "best MS blasts from the past" list. Shame Clippy won't be back.
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