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Microsoft CEO readies big shakeup, drops devices and services focus

Microsoft CEO readies big shakeup, drops devices and services focus

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Microsoft CEO Satya Nadella sent a broad email to all employees today outlining the company’s ambitions for the new financial year. Top of the agenda is reshaping what the "core" of Microsoft is, and Nadella admits the devices and services description, introduced by former CEO Steve Ballmer, was helpful, but that "we now need to hone in on our unique strategy." That unique strategy is a Microsoft that’s focused on mobile and cloud, a similar message that Nadella has hinted at previously. "We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more," Nadella boldly states.

Xbox is safe at the new Microsoft

While Nadella might be dropping the devices and services moniker, that won’t directly impact products like Xbox, Surface, and Windows Phone just yet. "We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation," says Nadella. "Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft." On the Surface side, Nadella name checks the Surface Pro 3 as an example of how Microsoft will build first-party hardware to boost the Windows ecosystem. "That means at times we'll develop new categories like we did with Surface. It also means we will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition."

Nadella is also planning to reshape Microsoft’s various product teams and engineering processes to "be customer-obsessed, data-driven, speed-oriented and quality-focused." Part of that is an effort to remove some processes and have fewer employees focused on decisions. Another part is improving training and investments in having Data and Applied Science resources in each engineering group. That, Nadella hopes, should help Microsoft speed up its software engineering processes, while maintaining the quality of Microsoft’s software products. The software maker has been caught off guard a number of times over the years as more nimble competitors like Google have rapidly built products and shipped updates at a more rapid pace than Microsoft.

"Nothing is off the table ..."

Nadella’s note to Microsoft employees also recognizes that the future the company faces is challenging. "I consider the job before us to be bolder and more ambitious than anything we have ever done," admits Nadella. Encouraging Microsoft employees to help build a new culture to foster the company’s future, Nadella says "nothing is off the table in how we think about shifting our culture to deliver on this core strategy," and that "tired traditions will be questioned" along with priority adjustments. Nadella is clearly ready to challenge and change Microsoft, to awaken its employees and reboot the company with a fresh strategy and vision. The timing comes shortly before Microsoft reports its latest financial results, and amid rumors the company is planning layoffs shortly. Nadella doesn't touch on those aspects, instead focusing on the future. "We will collectively transform this company and seize the great opportunity ahead."