Job cuts show Microsoft CEO is serious about new direction

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.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems.

His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California.

Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.