The Strategy

Following the naming of Microsoft insider Satya Nadella as Microsoft’s CEO, there’s been an absolute deluge of suggestions as to what he should do. Here’s an article that’s typical of the genre—it recommends that Microsoft adopt Android as its operating system platform for smartphones and, presumably, phablets:

I’ve just had an interesting idea (which is pretty rare at the end of a long, hard week). What if Microsoft’s new CEO, Satya Nadella, drops Windows Phone in favor of Android? This might seem crazy, given the amount of time and money that Microsoft has put into Windows Phone — but desperate times call for desperate measures, right? Adding credence to this idea is the Nokia X (codenamed Normandy) — a Lumia-style phone that runs Android. This mid-range phone, despite Microsoft’s acquisition of Nokia, still looks like it’s going to come to market this spring. Is it possible that Microsoft is waiting to see how the Nokia X does, before making a decision on the continuation of Windows Phone?

What most of these pieces ignore and the one cited above is a prime offender is Microsoft’s fundamental business strategy.

During the California Gold Rush of 1849 those made the most money weren’t the miners but the merchants who sold equipment, food, and so on to miners. Similarly, there’s a lot more money to be made selling tools to software developers. Microsoft’s strategy for more than 30 years has been to control all computer software development and IMO Windows 8 must be viewed in that light. If Microsoft loses control of the software development environment on smartphones, tablets, and so on and most future software development is done for smartphones, tablets, and so on, Microsoft loses control of software development.

So, don’t expect a Microsoft insider to propose abandoning Microsoft’s core strategy of the last several decades. You can’t maintain a $78 billion software company on office productivity software.

2 comments… add one
  • TastyBits

    Do not forget Office.

    Microsoft went astray under when it decided to abandon backward compatibility.

    Few people remember that Windows XP had a lot of problems when it came out, but old software was usually not a problem. Drivers were a problem, but when manufactures released new drivers, old hardware usually worked.

    For Windows Vista, Microsoft expected users/businesses to purchase software. Drivers were a problem, but when manufactures released new drivers, only the newest hardware usually worked. Hardware had to be replaced also.

    For Windows 7, Microsoft “bought a clue” and created XP Mode for the Professional version. This allows most older software and some older hardware to run. Sales of Windows Windows 7 were substantially higher than Vista, and I expect businesses to be purchasing them for some time. I plan on getting a few more OEM disks before they are gone.

    This was dropped for Windows 8, and in addition to breaking backward compatibility, Microsoft is going to force users to interact with the machine the way they decide. Apple could get away with this. Microsoft will never be able to get away wit it.

    For Development languages, Visual Basic 6.0 was substantially changed when going to VB.NET. For many VB6 software applications, it would take almost a total rewrite of the code to convert, and this is cost prohibitive. Microsoft’s position was “too bad”. They have since changed, but I suspect there has been substantial damage done.

    Windows Phone was out long before the iPhone, but it was not a priority to Microsoft. It was really nice for business users. It had Mobile Office, and with a stylus, you could do work related activity.

    Windows Tablet PC was also out long before the iPad. It now uses a stylus and touch. For taking notes, a stylus beats your finger. There is a reason the quill was developed instead of the finger as a writing instrument.

    IBM, COBOL, and the mainframe are still around long after they were pronounced dead. Microsoft will be also. Business like big stable companies to kick when something goes wrong. As soon as Microsoft remembers that, it can get back to business.

  • steve

    Has a good rep as a computer guy and not just a business guy. doubt he will abandon their core, but I know they are worried about innovation. They also worry about losing some of their best and brightest to firms that doing more cutting edge stuff.


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