Job cuts show Microsoft CEO is serious about new direction

by Steve Blum • , ,

Microsoft’s new CEO, Satya Nadella, has gotten it right. His 10 July 2014 email to Microsoft employees set out a clear path forward for the struggling giant and this week’s announced layoffs of 18,000 employees turned that vision from clear into ruthless. Which is the only way the company will survive as a major tech player in the 21st century.

Star legacy businesses – Windows OS, Office productivity software, Xbox – will survive, but primarily as stepping stones to cloud and mobile services, which are intended to reach customers regardless of whether they’re using Microsoft products…

All of these apps will be explicitly engineered so anybody can find, try and then buy them in friction-free ways. They will be built for other ecosystems so as people move from device to device, so will their content and the richness of their services – it’s one way we keep people, not devices, at the center. This transformation is well underway as we moved Office from the desktop to a service with Office 365 and our solutions from individual productivity to group productivity tools – both to the delight of our customers.

He seems to have adopted a two-pronged strategy: keep making Windows phones and tablets, and Xbox consoles, but ensure that any significant software, service or content that works on them will perform seamlessly and equally well on Apple, Android and other devices. He put his finger right on the key problem he’s faced with, which is that the scarcest resource is a customer’s attention span.

Apple’s strength is an ethos that says make it elegant, but first make it work. Nadella might or might not get around to making Microsoft elegant – a tall job, to put it most mildly – but he grasps that the “stuff” he sells has to work. Which means delivering maximum satisfaction with minimum differences and learning curves across a universe of platforms, devices and operating systems.

The Microsoft of 20 and 30 years ago had the youthful fire to take on a job like that. If Nadella can rekindle it, he will succeed. The job cuts he’s making shows that he intends to.