Microsoft has been one of the most successful and profitable companies in the world for the past two decades. Over the past few years though, Microsoft's supremacy has been brought to severe question by Google, Apple, Amazon and a bunch of nimbler competitors. From being one of the earliest leaders in the smartphone business, they lost it all to Apple's iPhone and Android's OEMs. From being a browser king, they lost the throne to Google Chrome. They are being severely challenged on infrastructure and enterprise areas by Google, Amazon and a slew of startups. It was under this challenging times that longtime CEO Steve Ballmer ceded his throne to cloud business veteran, Satya Nadella.On the 4th of February, it is the one year anniversary of Satya taking over the CEO role. In this past year, Nadella has slowly but definitively remade Microsoft. And he has just begun scratching the surface. Gauging by the first year of the Nadella, we are in for some very interesting times. Presenting, a reimagined, refreshed and redesigned Microsoft.The Years Before NadellaThe years prior to Nadella were unique to Microsoft. From being an unquestioned leader in many segments, they went to being challenged everywhere. For decades, they had grown used to healthy profit margins and reasonable but not dramatic innovation. But that was not to last. A completely reinvigorated Apple and Google latched onto the exploding mobile business and made themselves into Goliaths in the space.Enterprise computing started moving to the cloud rapidly and Microsoft watched as Amazon jumped and soon dominated the space. A bunch of missteps with Vista and Windows 8 damaged Microsoft's credibility in the personal computing space. Expensive word processing and spreadsheet type of tasks dominated by Office was being challenged by Google Docs. The Surface tablet hardware business had all but tanked. And the Windows Phone ecosystem was stagnant even after a Nokia partnership and eventual acquisition.All that time, Satya Nadella quietly worked in the cloud computing segment beefing up Microsoft's offerings to compete against Google, IBM and Amazon. The Microsoft Nadella inherited was rich, prosperous, still dominant yet drifting into irrelevance.
The Nadella Year That WasSince Satya Nadella took over as Microsoft CEO in Feb 2014, a lot has changed. And much of it for the better.
- First and foremost, a software company
Microsoft has embraced itself as a solution and service provider across platforms- something it should have done long time ago. Long gestating
Microsoft Office offerings for iOS and Android surfaced. A subsequent move to make them free on tablets made them even more popular.A cloud photo backup solution for mobile platforms in the form of
One Drive with a healthy free storage limit was a shot on the bow to competitors like Dropbox, Box and others. Most recently, a well designed and well reviewed
Outlook app for the iPhone (via
Accompli acquisition) signaled Microsoft's intentions to be a software player on mobile platforms without being tied to its own Windows Phone ecosystem. This allows the core components of Microsoft software to be used and deployed across the gamut of device experiences- personal computing, enterprise, and mobile user.After a few years of trying to monetize and understand the value of its
Skype property, Microsoft wisely integrated it into all its offerings including the upcoming Windows 10 OS. Skype also continues to improve for other mobile platforms which is a welcome strategy.By
acquiring the burgeoning Minecraft franchise and eco-system, Microsoft has made a smart investment on not just a game but a phenomenon in the world of immersive world building experiences.
- Hardware ambitions reassessed
When Nadella took over Microsoft, hardware offerings were all over the place. There was the Xbox entertainment system that was a leader of the past generation with Xbox360 but a laggard with Xbox One, due to a series of missteps. Surface RT and Surface 1/2 had been solid failures. The Nokia acquisition was not really playing out much because of an inconsistent strategy.Over the past year, much has changed in the hardware world for Microsoft. The Surface 2 and RT are pretty much off the shelves and might never make it back again. Instead. Microsoft has wisely chosen to focus on the profitable and well received Surface Pro 3 line of enterprise tablet devices.A price cut to Xbox One over the holidays took it back to the top of console sales and it has stayed there in the months since. Understanding that entertainment is part of the console experience,
Microsoft finally removed them from being paid options as part of Live Gold and made it free for all Live users.
After the debacle of Windows 8, all eyes were on Microsoft this past month when it formally unveiled Windows 10. With the Mac growing much faster than the PC segment, Microsoft had to stay relevant in the conversation and
Windows 10 promises to be a much better offering from the Redmond giant.An integrated Cortana (personal voice assistant) experience, a brand new reimagined browser (code named Spartan), a platform centric approach with one app store, one integrated platform and a single experience across devices are some of the highlights of Windows 10. Also welcome was the promise of a free upgrade for Windows 7 and Windows 8 users within the first year of launch. This would ensure a wider adoption for the OS than Windows 8 which never really took off.
As someone who came from the cloud side of the business where he oversaw rapid growth, Nadella knew that cloud computing was the future. He has wisely focused on the growing popularity and adoption of Azure and built services on top of that. Features include support for Internet of Things (IoT) with
Azure IoT, and constantly improving
business intelligence and
analytics offerings to capitalize on the growing shift to cloud infrastructure. By betting big on IoT, Nadella is betting big on a massive growth area for the future. Microsoft has gone so far as to offer a f
ree version of Windows 10 for Raspberry Pi, a popular platform for IoT device development.
- All Other Things Considered
Microsoft Research has been one of the most innovative components of the Microsoft organization. But a big challenge over the years has been the lack of tangible and successful products to flow from the research space to deployment. Some of that seems to be changing with the recently announced
Surface Hub and
HoloLens. The Surface Hub is a unique integration of Microsoft software and hardware innovations from its research teams. It has the potential to be a good enterprise offering.
HoloLens is a big bet on virtual/augmented computing. With
Magic Leap and
Oculus Rift getting a lot of attention over the past year, Microsoft stealthily built a unique and compelling experience that might prove to be a breakout hit if it pans out. Critical to the experience is the standalone nature of the product without requiring a tether to a mobile or personal computing device. HoloLens holds a lot of promise and most importantly demonstrates that Microsoft is looking ahead to the next big thing.
Looking AheadSo what does this all mean to Microsoft? Thanks to all these changes, innovations and customer driven decisions, Microsoft is starting to be very relevant again. It is back in public consciousness. Its most recent "
Empowering All" ad campaign speaks volumes about the new Microsoft. Some of these innovations might pan out while others will fail. Much of Microsoft has to embrace the new vision put forth by Nadella. Most importantly, Microsoft needs to execute on all these ideas and promises. Time will tell how it all plays out. Suffice to say, the company is on the right track and it has the right person to lead it into the next era of computing.
Welcome back, Microsoft. We missed you.
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