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"The 'One Microsoft' reorg is just rearranging deck chairs on the Titanic"
Poor Steve Ballmer. Despite leading a fundamental transformation of Microsoft from a software licensing powerhouse to one that has a strong future in cloud-based services, he gets no respect.
So the “One Microsoft” reorganization that he instituted last July is as misunderstood as Rodney Dangerfield. Here’s the key paragraph from Ballmer’s memo:
We are rallying behind a single strategy as one company — not a collection of divisional strategies. Although we will deliver multiple devices and services to execute and monetize the strategy, the single core strategy will drive us to set shared goals for everything we do. We will see our product line holistically, not as a set of islands. We will allocate resources and build devices and services that provide compelling, integrated experiences across the many screens in our lives, with maximum return to shareholders. All parts of the company will share and contribute to the success of core offerings, like Windows, Windows Phone, Xbox, Surface, Office 365 and our EA offer, Bing, Skype, Dynamics, Azure and our servers. All parts of the company will contribute to activating high-value experiences for our customers.
You can already see hints of how radical this new approach is. At Mobile World Congress, the big news about Windows 8.1 Update 1 came from Joe Belfiore, who until recently was exclusively a Windows Phone guy. Inside the company, I am hearing that the reorg has already helped break down some of the silos that led Windows developers to resist cooperation with divisions that didn’t share their lofty operating margins.
This is the kind of reorganization that takes years to fully execute in a company the size of Microsoft. Fortunately, Satya Nadella appears to have embraced and even extended the concepts.
"Windows Phone is a failed experiment"
Pundits have been bombarding new CEO Satya Nadella with advice on how he should "save Microsoft." If you could pick the single piece of misguided advice that has become most popular in recent weeks, it's the recommendation to ditch Windows Phone and go all Android.
Those same voices, plus a veritable backup choir of new players, were vocal this week with the announcement of the new Nokia X line, a low-cost phone for emerging markets powered by (gasp!) a Nokia-forked version of the Android Open Source Project code.
Settle down, people. Windows Phone isn't disappearing.
The current installed base of Windows Phone users numbers approximately 50 million. In the year after Microsoft closes its acquisition of Nokia, that number should blow past 100 million. By any rational standard, that's a market big enough for developers to take seriously. For the sake of comparison, that's more than the entire worldwide population of Apple Macs.
If you think Microsoft is going to turn its back on a growing installed base of 100 million customers, you really need to find a different beat to cover.
"Windows RT is dead"
It's true that Windows RT had an inauspicious and confusing debut, culminating in an embarrassing $900 million writedown of the Surface RT. The ironic thing is that that writedown came about as a direct result of Microsoft's confidence in the product it had produced. Had executives been more cautious with their launch plan, they could have built and sold a smaller number and never had to deal with that writedown.
But is Windows RT going away? Hardly. And anyone who tells you so is betraying a fundamental understanding of the Microsoft roadmap.
Windows RT is, at its core, the Windows 8.x/9 platform, minus the ability to run desktop apps. Now that 40 percent of new PCs are shipping with touchscreens, do you think Redmond is going to drop its new touch-centric user experience and app platform? Uh, no.
The confusion comes about because Microsoft has announced plans to consolidate its APIs for Windows across the board, so that developers who write Windows apps can target phones, tablets, and PCs with relatively minor changes in code.
It's possible that Windows RT as a brand will fade into the background. You can already see hints of that in Microsoft's decision to build a successor to Surface RT and call it simply Surface 2.
But the basic concept of a touch-first platform that runs modern apps from a curated store in a highly secure environment? That's not a dead end; it's the future.