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By | Gavin Clarke 11th July 2014 11:19

Satya Nadella: Microsoft's new man presses all the old buttons in LONG memo

That marketing missive decoded

Comment Six months into his new job as Microsoft CEO, Satya Nadella has penned what we're supposed to believe is a memo to his troops.

Corporate missives to employees are generally hush-hush affairs, something enterprising journalists land by luck or skill.

The appearance of the document on the company's website means this is not an email meant only for employees, but rather a piece of PR that targets an outside audience. It's about as genuine as all those exec blogs "written" by a named exec.

Critics, partners, investors, the press, investors – anybody with a stake in the game who's been holding their breath waiting for Microsoft to break out or go under – have all read this piece of prose.

It has been six months since Nadella took over CEO role from Steve Ballmer, and the timing of this memo is clear.

Just in case you thought there was nothing going on since Nadella took over beyond nixing Cortana on non-Windows Phones and picking up where his predecessor left off in putting Office on the iPad: time to sit up, World. He's still there.

Nadella's memo reads less like a vital or strategic missive to staff and more like the end result of a period of intense marketing huddling.

The most important thing for marketing types at any company is to decide "who we are" and try to convey this to customers and rivals.

And you could argue that this is exactly what this document does.

According to Nadella, it's no longer enough to simply describe Microsoft as a mere devices and services company - the drumbeat under Ballmer. That's pitching it far too low.

No, here's how Nadella describes the new company, in a 35-word distillation of the past six months' huddle.

Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will re-invent productivity to empower every person and every organization on the planet to do more and achieve more.

Prepare yourself, this is the new Microsoft message. The new "core". From these simple words, Microsoft's new messaging and self justification will flow.

Microsoft likes this kind of messaging reboot. It did it on .NET, on three screens and a cloud, on being a devices and services company.

But what do these words actually mean?

Productivity and platform? That's what Microsoft was already doing. It was called Windows and Office and Office 365.

I didn't say there was anything new here. This is what such marketing huddles do: try to identify your core products or skills and dress them up.

Windows - client and server - and Office apps, along with the workhorse server and tools apps, remain Microsoft's biggest money-spinners.

The other thing you do with huddles is find ways to justify the non-core stuff. Marketing is about positioning yourself in the best light and turning weaknesses into strengths.

Which brings us to Xbox and Surface.

Xbox is staying. We've had speculation, rumours and pressure from Wall St on flogging Xbox. It was Steve Ballmer and the board's position that Xbox should stay. Now that's final.

I... want to share some additional thoughts on Xbox and its importance to Microsoft," Nadella wrote. "As a large company, I think it's critical to define the core, but it's important to make smart choices on other businesses in which we can have fundamental impact and success.

Microsoft will continue to vigorously innovate and delight gamers with Xbox. Xbox is one of the most revered consumer brands, with a growing online community and service, and a raving fan base.... bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft.

Second, the loss-making vanity exercise that is Surface will also stay put. Surface, at least for the purpose of this newly positioned Microsoft, has been branded "first-party hardware".

Slap on the back to the Microsoftee or messaging consultant who came up with that one.

"We will build first party hardware to stimulate more demand for the entire Windows ecosystem – that means at times we'll develop new categories like we did with Surface," Nadella said.

Is there nothing new in this? Funny you should mention that

Yet another Microsoft re-organisation is in the works: no company re-organises as frequently or with such passion as Microsoft, and Microsoft under Nadella will be no different.

Just one year since Ballmer's supposed root-and-branch changes that produced the "One Microsoft" structure and abolished the product-silo business units, more changes are coming.

Nadella promised more this month on "the engineering and organizational changes we believe are needed" to focus on the company's core. He'll announce more on 22 July, the date of Microsoft's quarter and full-year earnings and the opening of fiscal 2015.

Microsoft has nearly 130,000 staff thanks to the Nokia Mobile acquisition. Expect cuts.

As was the case one year ago, the new structure is supposed to make engineering more efficient - get things done more quickly - and to cultivate more innovation.

According to Nadella, Microsoft's engineering will be modernised and streamlined to "reduce the amount of time and energy it takes to get things done. You can expect to have fewer processes but more focused and measurable outcomes."

Where have we heard this before?

Again, no details but this does sound rather familiar. It sounds like an extension of the triad system or organisation introduced by former Windows chief Steven Sinofsky.

The triad system brought together developer, tester and program manager and stripped out Microsoft product development, product managers and marketing managers.

The structure sped things up and kept new versions of Windows and Office coming quickly - ending the company's infamous late shipment dates.

Nadella is very pro-triad and we reported here on how Sinofsky's triad system was rolled into Nadella's old server and tools group from Windows.

More ominous for Microsoft's engineering is this: there will be spending on data science and analysis. This comes with new spending on data and applied science and software engineering for use by devs.

It was the rise of the belief in the power of data to drive development that landed Microsoft in trouble on Windows 8.

It was Sinofsky who used telemetry on the use of Windows to justify each and every development choice in Windows 8, to justify removing familiar desktop features and generally march the Windows development over a cliff. Microsoft is still backpedalling its way to the desktop.

Sinofsky's love of data cut out the human factor from the development equation.

Don't believe the headlines: Nadella's supposed email to employees is not some memo that spells out a vision. It's intended to convince you, the outside observer, that the wheels of change are in motion at Microsoft. And this should not come as a surprise, given change is the ticket upon which Nadella was "elected" after Ballmer.

The changes you'll see, however, are classic Microsoft. Despite his pragmatism in the area of server and tools, Nadella was, after all, the safest of choices and the most company of company men available as Microsoft's new CEO. ®

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