Friday, April 11, 2014

Nadella's new Strategy for Microsoft

As the new CEO, Satya Nadella has hit the ground running and has taken several big bets as he defined new strategy for Microsoft.

In this year's Build 2014 conference, Nadella made major announcements which indicate the shift in Microsoft strategy. The new strategy can be summed up in three main points:

1. Fix the current mistakes
2. Embrace the mobile world
3. Build for IoT

Fix the current mistakes

According to a recent study:

  • Windows 8.x is installed only on 11.3% of PCs. 
  • 78% of the enterprise users have no plans to adopt Windows 8.x! 
  • Android PCs are likely to get a market share of 8% by 2015.

This spells trouble for Microsoft and must be fixed ASAP. So Nadella announced few changes on Windows 8.1 - including bringing the Start Menu Back to Windows 8 and boot-to-desktop to make Windows 8.1 valuable to enterprise.

Embrace the mobile world

By making Windows RT 8.1 free for mobile devices with screen size below 9 inches, Microsoft is embracing the mobile world in a new way. With Microsoft's share in Mobile platform at abysmal levels, Nadella had to give away Windows RT for free to attract new cell phone vendors. Microsoft-Nokia has an abysmal market share of 3.1% in smart phones and at this levels Windows OS for mobile will be unsustainable.

So  Nadella is working out a broad strategy to make Microsoft Windows RT more popular by giving it free to cell phone vendors hoping that Cell phone vendors in Asia may embrace Windows more openly. Compared to Android, a free Windows OS would be more attractive - as cell phone vendors need not worry about Patent lawsuits with Apple or get entangled in licensing issues.

Build for IoT (Internet of Things)

Universal Windows Apps. Allow other developers to write apps that works seamlessly on phones, tablets, PC and even Xbox/TV. This is a very significant move from a strategy perspective. This allows Microsoft to leverage its large developer community to develop universal apps and make Microsoft a powerful player in the mobile world.

Microsoft just announced the concept of Universal Windows Apps, the implications are clear. Developers can create Windows apps for IoT - such as Car navigation/control/entertainment system and have the same app be remotely controlled/monitored or augmented in a mobile or a PC and Microsoft Azure Cloud.

If Microsoft enables app developers to leverage all four platforms: IoT, Mobile, PC and Cloud with Universal Windows Apps, then Microsoft will have a major foot hold in the IoT segment.

Closing Thoughts

Nadella has announced a big shift in Microsoft Strategy. Microsoft is fighting with its back against the wall in Mobile space and is non-player in IoT segment. So Microsoft has a stiff uphill battle to make itself relevant in the new mobile & IoT world.

Microsoft is still a very strong player in enterprise software and cloud services. Nadella must leverage these strengths to win the mobile & IoT battle.

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