Microsoft CEO Nadella Ditches Ballmer's Devices And Services Vision, Hints At Major Organizational Shakeup


Microsoft CEO Satya Nadella, in a 3,100-word email sent to employees Thursday, said he's about to make some big changes to help the software giant sharpen its competitive edge.

Much of Nadella's email is a rehash of what he's been saying since taking over as Microsoft CEO in February. There are lots of mentions of "mobile-first, cloud-first," and of the importance of technologies that harness social and operational data to make Microsoft products more powerful.

Yet there is also language that shows Nadella is eager to infuse new thinking at Microsoft, where he has worked for the past 22 years, presumably developing a keen sense of what needs changing.

Related: Microsoft Pitching New Volume Licensing Program As Customers' On-Ramp To The Cloud

Perhaps the biggest changes Nadella outlined in the memo have to do with Microsoft's culture. As he's said in the past, Microsoft needs to tackle market opportunities differently than it has done in the past. In the memo, he brought this up again:

Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving.

Nadella also said he's not going to follow the "devices and services" vision of former CEO Steve Ballmer, who felt Microsoft needed to make its own hardware in order to stay competitive.

"While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy," Nadella said in the email.

That doesn't mean Microsoft won't keep making its own hardware, though. Nadella described Surface 3 as "the world's best productivity tablet" and said Microsoft "will responsibly make the market" for Windows Phone through its $7.2 billion acquisition of Nokia, though it's unclear what that means.

Nadella reportedly was opposed to the Nokia acquisition early on. At Re/Code's inaugural Code Conference in May, he dodged a question about the Nokia deal, saying only that "We are a software company at the end of the day."

Nadella also made it clear that Microsoft has no intention of selling or decreasing focus on its Xbox business, as some investors and Wall Street analysts have been advocating.

Chris Hertz, CEO of New Signature, a Washington, D.C.-based Microsoft partner, liked what he saw in Nadella's email.

"That was the best encapsulation of Microsoft's strategy I've heard in a long time," Hertz told CRN. "Mobile-first, cloud-first is an easy pitch for our enterprise customers, and I love that the focus is back on Microsoft being a platform company."

NEXT: What The Changes Mean For Microsoft Software Engineers, Partners


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