The empire strikes back

17 Feb 2015

Satya Nadella became CEO of Microsoft a year ago. Microsoft’s mobile strategy was unclear and the situation looked bad. In a year Microsoft has integrated Nokia phone business to its organization, started to make interesting acquisitions, improved Windows Phone usability and looks like they have revised their whole strategy. Is Microsoft back in mobile business?

A year ago I wrote Where’s Microsoft mobile heading and estimated that Microsoft must make a significant streamlining for the mobile unit (Nokia integration), get its Office and enterprise solutions to be relevant in all mobile systems, and revise its own phone and WP strategy. Now we start to see signs of all of these activities. Part will take a longer time, but surprisingly much has happened in a year.

Late last year Microsoft acquired a mobile email startup Acompli. This app is now already known as Microsoft Outlook and it is already available for iOS. Many users, who are not Microsoft fans, see that it is one of the best or even the best mail client for iPhone. And especially for Microsoft Exchange users it is a huge development, but works very well also e.g. with Google apps.

In February Microsoft acquired a mobile calendar company Sunrise. Again many users see it as one of the best mobile calendar apps. The app works also well with Google solutions and Facebook. Most probably this calendar app will be integrated to Microsoft Office solutions.

Internally Microsoft has also moved its OneDrive team to the Office organization. It is still hard to know or comment all of Microsoft’s strategic plans, but it looks like it has now much clearer intention to develop Office and business applications as a full offering that’s available in all main mobile systems. The latest Windows Phone version, Denim, had also several improvements for usability starting from smart folders e.g. to camera software. It looks like they also want to learn from well working solutions, not do only unique in-house solutions.

These are still more signs, but we can say they represents a new strategy compared to Ballmer’s time: 1) Microsoft has taken an active role in app and software acquisitions, 2) it puts more effort to get its Office and business offering to address today’s users’ needs, 3) it can also learn and copy best practices in business models and usability from the market, and 4) it wants to get its solutions into iOS and Android too. All these activities are very important to keep the Microsoft business application offering relevant.

There’s a long path to a reborn giant after many years with a stubborn strategy. Windows Phone and phone business are starting far behind iOS and Android. We don’t yet see improvements in the phone business, but in tablets Microsoft has already started to do better and increased market share. This year we should see Windows 10 and how it can influence user experience and sales.

The next 12 months will give much more evidence about the new strategy and how it works. This means also changes inside the organization and also for Microsoft’s old partners that are used to the old way to do software business and build heavy solutions. But it looks like the new CEO has set a new course for Microsoft and is committed to making needed changes. It is not an easy exercise, but it is necessary to keep Microsoft relevant and even survive.

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