In 2014, Microsoft has a lot to be happy about
- It still has around 90% - a billion users – of the PC market, which is slowly declining in favour of mobile devices, especially tablets.
- Its Windows 8.x tablets, hybrids and Ultrabooks may be cannibalising its desktop sales but users are generally staying with Windows – especially business users.
- Its smartphone market is growing at rapid rate and it seems to be content to play for the long haul.
- It is one of only two horses in the games console race - its Xbox against Sony’s PlayStation.
- It is now the only company to offer developers the opportunity to write their apps to run across the whole ecosystem. Yes, it now has an ecosystem!
Not to speak ill of its past CEO Steve Ballmer – because many of these changes were initiated under his rule, but the new Microsoft - the new caring, sharing, gentler, Microsoft – could not have happened without a significant shake up at the top.
While these names may not mean a lot to ITWire readers, they are amongst some of the best thinkers and doers in the IT world and at Microsoft. Result - the new Microsoft is a leaner, more holistic company better able to regain the crown.
In a few short weeks new Chief Executive Office Satya Nadella has completely changed the company. The company has released Office for iPad, Windows is now free to smartphone tablet makers for devices with 9” screens or less, and there is a new version of Windows Phone that can compete with Android on price and features. And now he has announced new department heads.
Nadella is considerably different to Ballmer. He is considered, realistic, incredibly business savvy, and seems to have little of the Ballmer/Gates/Microsoft baggage despite his past with the company. Nadella says Microsoft is no longer the dominant force - it needs to act like a hungry start up again – and it is.
The appointment of Scott Guthrie as head of the cloud and enterprise group is a smart move. It’s a US$20 billion division that Nadella directed before he got the top job. Guthrie has been with Microsoft since 1997 and is somewhat of a nerd – in a good way. He knows that the tech needs to support the promises.
Stephen Elop joins Microsoft as head of its Devices Group. Elop is returning to Microsoft as part of the company's acquisition of Nokia's mobile business. Not all admire Elop for his ‘burning platform’ decision to adopt Windows Phone (over Android) for its premium Lumia handsets. In hindsight the gamble paid off – both in increasing its market share against strong odds, and in returning Nokia shareholders a profit on the Microsoft merger. Elop knows the smartphone game better than most and with Microsoft’s resources may just produce the innovation needed to regain second spot.
Phil Spencer was put in charge of combining the Xbox and Xbox Live development teams with the Microsoft Studios team. Officially he heads Microsoft Studios and oversees creative teams around the world developing games, entertainment and premium content experiences for Microsoft’s family of devices including Xbox One, Xbox 360, Kinect, Surface, Windows PC and mobile phones.
He is a 25-year Microsoft veteran, who has served as the chief of Microsoft Studios. Spencer is not afraid to admit Microsoft’s past mistakes, “The Company made some poor choices over the past 12 months.”
Xbox will renew its ‘gaming first ‘approach and he admitted that furore surrounding its ‘always on’ connectivity requirements, which were removed before release, the focus on live TV and controlling the living room, and Kinect-enabled commands, simply didn’t resonate as the company had hoped. Spencer’s background and his passion for gaming will ensure a new Xbox direction.
Nadella's memo follows.
From: Satya Nadella
To: Microsoft – All Employees
Date: March 31, 2014
Subject: Tuning our organization
Today marks the start of another big week for Microsoft as we gear up for the Build conference in San Francisco. We continue to push on the momentum from last week’s news about how we will thrive and grow in a mobile-first, cloud-first world, as shown by the great Office apps for iOS, rich new APIs for developers and our new Enterprise Mobility Suite.
In advance of Build, I want to highlight three announcements about how we’re continuing to evolve and tune our organization for maximum focus and impact.
First, I am pleased to announce that after his two months as acting leader for the Cloud and Enterprise organization, I have promoted Scott Guthrie to Executive Vice President, where he will continue to lead and drive the organization. As you know, Scott has been a very public and passionate evangelist for many of our most important developer and infrastructure businesses. Since joining Microsoft in 1997, he has made critical contributions to .NET and other pivotal technologies that help power the Microsoft ecosystem today, and most recently has been the driver behind the unprecedented growth of Microsoft Azure. As a leader, Scott has shown incredible energy and insight into how we create technology that others can build on, and which can be built on what others have created. Please join me in congratulating Scott on his promotion!
Next, I have asked Phil Spencer to take on a new role leading Xbox, combining the Xbox and Xbox Live development teams with the Microsoft Studios team. Phil will report to Terry Myerson, allowing us to keep gaming close to the group developing operating systems across devices. In this new job, Phil will lead the Xbox, Xbox Live, Xbox Music and Xbox Video teams, and Microsoft Studios. Combining all our software, gaming and content assets across the Xbox team under a single leader and aligning with the OSG team will help ensure we continue to do great work across the Xbox business, and bring more of the magic of Xbox to all form factors, including tablets, PCs and phones. Phil will continue his close partnership with Yusuf Mehdi, who leads business strategy and marketing for Xbox, George Peckham, who heads up third-party partnerships and Mike Angiulo, who will continue leading Xbox hardware. Over the years, Phil’s team at Microsoft Studios has helped build a community of more than 80 million Xbox owners and 48 million Xbox Live members through blockbuster game franchises such as “Halo,” “Gears of War,” “Kinect Sports,” “Fable,” “Forza Motorsport” and many others. He’s helped drive the development of brand-new entertainment offerings like the partnership with the NFL and the formation of Xbox Entertainment Studios. I love the way the Xbox team is focused on great games and gaming experiences (go, “Titanfall”!), connects with its fans, pushes the boundary of entertainment and has embraced the power of the cloud in such interesting and impactful ways. Phil is the right person to lead Xbox forward.
Finally, effective with the close of our deal with Nokia, Stephen Elop will join Microsoft as Executive Vice President, Microsoft Devices Group, reporting to me. We expect to close the acquisition by the end of April 2014. I’ve had a chance to work closely with Stephen, when he was previously a senior leader with Microsoft, as a key partner during his tenure as Nokia CEO, and again in the last several months as we’ve worked through the initial stages of integration planning. I look forward to working with Stephen as a key member of the senior leadership team and welcoming the Nokia Devices and Services employees to the Microsoft family. The mobile capabilities, hardware design expertise, and world-class manufacturing and supply chain operations they bring will help us drive innovations in devices to delight our customers. Stephen will partner closely with Phil and Terry on Xbox and will bring together many of the top leaders from his existing Nokia Devices and Services organization as well as the current leaders of the Devices and Studios team.
Recently, I’ve discussed with the Microsoft leadership team the need to zero in on what truly makes Microsoft unique. As I said on my first day, we need to do everything possible to thrive in a mobile-first, cloud-first world. The announcements last week, our news this week, the Nokia acquisition closing soon, and the leaders and teams we are putting in place are all great first steps in making this happen.
There’s a lot of work ahead of us and I am counting on every single one of you to bring your “A” game every single day. I look forward to our second employee Q&A session on Thursday and hearing what’s on your mind and sharing more about what’s on mine.