Nadella must renew the world's faith in Microsoft

Feb 05, 2014 by Glenn Chapman
The Nokia Lumia 920 (L) and 820 Windows smartphones are displayed during a joint event with Microsoft on September 5, 2012 in New York City

Satya Nadella has to renew the world's faith in Microsoft and then deliver on the promise if the aging technology giant is to flourish anew.

Good news for Microsoft was that analysts contacted by AFP were of a mind that the newly-minted chief executive has the skill and resources to pull it off.

"The first step of getting a company out of the doldrums is to make people believe," Silicon Valley analyst Rob Enderle of Enderle Group said while discussing the challenge ahead for Nadella, who was named Microsoft chief on Tuesday.

"He has got to repair Microsoft's image," the analyst continued. "People have to see the company as an up-and-comer and not as a legacy firm that is past its prime."

Microsoft built its empire on software such as Windows or Office licensed to computer makers or sold in packages for installation on machines in homes or workplaces.

The era of the personal computer is being sunk by broadside hits from smartphones and tablets and could be outright scuttled by "wearables" such as Google Internet-linked eyewear and the coming of a rumored Apple "iWatch."

Microsoft's forays into smartphones and tablets were more akin to stumbles, despite fielding compelling hardware powered by sophisticated software.

Microsoft overhauled its latest Windows operating software to make it friendly to touch-screen devices and lifestyles in which people switch from one Internet-linked device to another through the day.

Apple and Google-backed Android smartphones and tablets have established strong beachheads in the mobile market with the help of "ecosystems" that involve services along with troves of digital content including fun, hip, or helpful applications.

A giant video screen shows the logo for Microsoft's Xbox One game console on November 21, 2013 in New York's Times Square

In a webcast, Nadella told partners that he intended to focus on innovating in areas where Microsoft has unique strengths that couldn't be replicated by rivals.

Business and enterprise focus?

The choice of Nadella appears to indicate that the Microsoft board sees its future in business and enterprise offerings, where the new chief has plenty of experience.

Along with getting businesses to rent popular Microsoft productivity software in the Internet cloud, the technology titan could offer additional services such as security.

During the webcast, Nadella spoke of working with businesses to help keep systems safe in the face of the trend of people using their smartphones or tablets at work as well as at home.

Creative Strategies analyst Tim Bajarin has covered Microsoft for more than three decades and outlined his blueprint for the company's future in a post online at techpinions.com.

Bajarin thought it best to break the company into three parts, one devoted to business and cloud offerings; another to mobile, and the third to entertainment and games along with Xbox consoles.

"By creating three distinct divisions or setting them up as separate companies each would have a clear set of goals, charters and roles with a tighter focus, thus giving them more of a fighting chance to compete especially against Apple, Google and Samsung," Bajarin said in his blueprint.

"If they don't do something drastic along these lines, Microsoft's overall business will continue to decline and their relevance in the future will be seriously in doubt."

Challenges faced by Nadella include keeping Microsoft's revenue from ebbing during a transition from selling lucrative packaged software to cloud service subscriptions that promise steady streams of money spread over time.

Nadella would be wise to liberate popular programs such as Office from the Windows operating system, according to analysts.

The fact that Office software is locked on Windows is a "fatal flaw," one analyst argued, calling for Microsoft to release versions of the program for Apple and Android devices.

Nadella will also need to change a competitive internal culture at Microsoft that promotes torpedoing colleague's projects instead of helping them succeed, according to Enderle.

"There is only one thing they can do, and that is lead," analyst Merv Adrian said of Microsoft.

"There is an impression they have fallen behind," Gartner's research vice president added. "Satya's challenge is to reverse that in perception—and in action."

Explore further: Top 5 items on Microsoft CEO's To-Do list

add to favorites email to friend print save as pdf

Related Stories

Top 5 items on Microsoft CEO's To-Do list

Feb 04, 2014

As with any new CEO, Microsoft's Satya Nadella will have a packed agenda that includes filling top management roles and re-examining strategy. The tech giant on Tuesday named Nadella to replace Steve Ballmer. ...

Nadella to head Microsoft; Gates leaves chair role

Feb 04, 2014

Microsoft has named Satya Nadella, an executive in charge of the company's small, but growing business of delivering software and services over the Internet, as its new CEO. Company founder Bill Gates is ...

Was Microsoft smart to play it safe with CEO pick?

Feb 05, 2014

Microsoft, after compiling a list of more than 100 CEO candidates, settled on Satya Nadella, a home-grown leader who joined the software maker in the early 1990s. That's back when Google's founders were teenagers ...

Recommended for you

As dust clears, what's next for Sony?

2 hours ago

The Sony hacking attack continues to deliver more dramatic plotlines than any fictional movie, but meanwhile the movie studio must move forward and tackle the next steps in minimizing the mess. Will Sony ...

It's down to the wire for online shopping

5 hours ago

As the holiday shopping season winds down, FedEx, UPS and online retailers are using the last few days to try to avoid the problems that occurred last year when severe winter weather and a surge in late orders ...

China's Xiaomi raises more than $1 bn in funding

Dec 21, 2014

China's top smartphone seller Xiaomi Corp. is raising more than $1 billion in a fresh round of funding, a move which would raise its valuation above $45 billion, a report said Sunday.

Why the Sony hack isn't big news in Japan

Dec 20, 2014

Japan's biggest newspaper, Yomiuri Shimbun, featured a story about Sony Corp. on its website Friday. It wasn't about hacking. It was about the company's struggling tablet business.

Sony faces 4th ex-employee lawsuit over hack

Dec 20, 2014

A former director of technology for Sony Pictures Entertainment has sued the company over the data breach that resulted in the online posting of his private financial and personal information.

Sony tells AFP it still plans movie release

Dec 20, 2014

Sony Pictures boss Michael Lynton denied Friday the Hollywood studio has "caved" by canceling the release of "The Interview," and said it still hoped to release the controversial film.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.