Microsoft CEO Nadella: 'We will reinvent productivity'

Microsoft CEO Nadella: 'We will reinvent productivity'

Summary: CEO Satya Nadella has given Microsoft's employees their fiscal 2015 marching orders. The company's primary focus will be on productivity and platforms, not devices and services.


Ten days into Microsoft's fiscal 2015, CEO Satya Nadella has sent a missive to the Microsoft troops.

(Image: Microsoft)

It's not all about developers, developers, developers. Or even devices and services. Instead, Nadella's July 10 e-mail message to all full-time employees (which also is available on Microsoft's Web site for all to read) is focus on Microsoft's core, and that core is all about productivity.

Nadella made it official that Microsoft is no longer using the "devices and services company" mantra  that former CEO Ballmer used to reposition the company in his last year-plus as CEO. Going forward, Microsoft is about productivity and platforms, Nadella said.

Microsoft's original mission was to put a PC on every desk and in every home. Then it was to be a devices and services company.

"While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy," Nadella said. "At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more."

Nadella had been telegraphing this new focus by talking up software in his recent speeches and remarks. But productivity doesn't just mean Office -- documents, spreadsheets and slides, he said. It also encompasses analytics software and services, development tools, translation software and more. The coming Skype Translator, Cortana personal assistant, and AzureML machine-learning service are all examples of new Microsoft productivity software and services.


And platforms doesn't mean just Windows -- or even Windows first. It means building software and services that run on the most important mobile operating systems. 

A diagram in Nadella's e-mail made it clear: Productivity software and services (a k a "digital work & life experiences") are at the center of the new One Microsoft. Device OS and hardware and the Cloud OS (anchored by Azure and Windows Server) are the extensions of that core.

Nadella made it clear in the email he sees Xbox as one of Microsoft's core businesses. He made it clear he sees it in a similar way that he has talked about Bing: Something that is tied to and influencing many other Microsoft products.

"Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base. We also benefit from many technologies flowing from our gaming efforts into our productivity efforts – core graphics and NUI in Windows, speech recognition in Skype, camera technology in Kinect for Windows, Azure cloud enhancements for GPU simulation and many more. Bottom line, we will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft."

Nadella's mail today didn't directly address when and whether Microsoft plans to reduce its headcount following its purchase of Nokia's handset business. Microsoft officials have said that Microsoft is expecting it can save $600 million by combining the two companies. A reduction in headcount is expected by some on Wall Street as one of the key ways that Microsoft is likely to achieve that savings. Nadella's mention of new employee training and development resources makes me think there definitely are cuts coming.

His mail also makes it clear that Microsoft is making changes to the way it develops products by streamlining its engineering process and focusing around data and applied science and software engineering across its teams. Each engineering group inside the company will be focusing on making better use of telemetry data in terms of predictive analysis and measurable outcomes. The Cloud & Enterprise team at Microsoft is in the midst of undoing the triad/functional management structure that was put in place at the end of Ballmer's tenure. I'd expect the other teams will all follow suit, if they haven't already.

Nadella's message is it's a whole new company these days. He wrote:

"Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving."

Nadella said the month of July will be one of "dialogue" about Microsoft's future. He will be keynoting Microsoft's Worldwide Partner Conference in Washington, D.C. next week. He will be on the Microsoft earnings call on Tuesday July 22 (Tuesday instead of the usual Thursday due to his travel schedule). And he will be speaking to the company's salesforce at Microsoft's annual sales conference MGX and its //oneweek event for employees (believed to be the replacement for the annual company meeting) toward the end of this month. 

Topics: Leadership, Collaboration, Emerging Tech, Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • I'm confused,

    doesn't this statement imply mobile devices?

    "At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world?
    • Focus on the platform

      I think the point is to focus on the platform and not the devices that use it. That's compared to Apple who designs their platform specifically to sell hardware.
      Buster Friendly
      • Confused

        I read the e-mail this article is base on. In general I am confused about where Microsoft is heading. It seems to me like more of a pep talk than anything containing the usual rallying cries. It also contains the current emphasis of the market in general of mobile and cloud (yawn). I guess I am looking for a single slogan where I can find focus and get excited about. Maybe Microsoft has become to big for single slogan.
        • there focused on mobile extremities

          The actual meaning is that they want to link device's with the cloud and let device's be managed while mobile. The slogan is vauge because they don't want to crush any innovative solutions to do that. They could say use Cortana and one drive to link all platforms but if someone has a better idea of how to achieve that goal they are open to it. The idea is flexibility and that is the theme of the whole restructuring.
          • There?

            It's difficult to take someone serious who uses "there" in place of "their", places apostrophes where they are not required, misspells "vague", and obscures his/her entire message.
          • Difference in perspective:

            Where you see someone who flunked out of 5th grade, I see someone from a different country, communicating in a language that's not their mother tongue.

            How well would you be able to communicate in another language? If you were to try, and someone criticized your efforts, would you be likely to try and contribute to conversations any more?

            By the way, punctuation goes inside the quotation marks. It's difficult to take someone serious who doesn't have a grasp of the basic rules of punctuation.
          • Half a brane....

            If Nadella had any sense, he would have had the e-mail edited for grammar and punctuation. That he did not suggests either that he is overconfident, that he underestimates the intelligence of his audience, or that he is unaware of the fundamental principal of sales, that you never get a second chance to make a good first impression. Perhaps he is guilty of all three. He has certainly squandered the chance to impress his audience. A man in his position should be aware of his own weaknesses and have figured out how to accommodate them. In this case it's that he is not a native English speaker (if that's actually the case - if it's not, then he is indeed semi-literate).

            As for the vagueness of Nadella's presentation, that's par for the course for Microsoft executives, a pattern laid down in the beginning by Bill Gates and since followed slavishly by all his disciples.

            The grandiloquence of Nadella's ambitions is also inherited from Gates. He's not even rearranging the deck chairs on the Titanic, he's just renaming them. Devices are now platforms and services are now productivity. Those are distinctions without a difference.

            He may be restructuring Microsoft. Certainly Balmer's schemes left the company in an organizational shambles. But Nadella's ambitions for Microsoft have yet to be scaled to fit the new competitive reality in which the company finds itself. That reality includes business every bit as large and influential as Microsoft, including Apple, Google, Facebook and Amazon, among others. Despite it's continued dominance in computer operating systems, the tech landscape in general is far more fragmented than it was when MS stood alone at the top of the heap. They have not yet come to terms with that new landscape and persist in speaking in terms that have long since become irrelevant.
          • Who cares

            I like correct grammar as much as the next person, but what is the point in belittling them about it? I thought the message was perfectly clear. Proper reading should be looking at the message as a whole, not letter by letter, so you should be able to understand it even with a few misspellings and punctuation errors. Anyone who can't lacks reading comprehension and should go back to elementary school.
          • cdgoldin, then read your own posts before complaining

            "It's difficult to take someone serious" -- grammar error, should be 'seriously'. So if you will take another to task for poor spelling and grammar, be sure your own post is correctly written.

            Else, your otherwise-valid post, cannot be taken seriously.
          • And You Should Be Taken Seriously...

            ...when your correction suggests he use "their" when "they're" would actually be the correct word?
          • Their?

            It's hard to take someone seriously who mistakes "their" for "they're" as in "They are focused on mobile extremities". If you are going to nitpick a post for spelling or grammar, you should first ensure that you are not making a mistake yourself, or "Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother's eye."
        • Helping People Be Productive

          or (slightly longer): Merging devices and software services backed by the cloud to expand into new levels of helping people be productive.

          Cortana, Skype translation, Bing are examples of this move.
          • Developer productivity

            VISUAL STUDIO, SQL MANAGEMENT STUDIO etc. could be other productivity products
        • "Our passion is to enable people to thrive"

          As the line in his email states:

          Our passion is to enable people to thrive in this mobile-first and cloud-first world.
          • Microsoft's Purpose Is Confusion

            First they have meetings to confuse themselves, then they hire overpriced marketing companies to attempt to both confuse the technologically ingnorant, as well as rally their MS fanboy base, in order to try and sell expensive, outdated hardware and horrible software to the masses.

            For example:

            Surface 3 is a tablet (then why no touch apps, not even touch Office, and why does it have a cooling fan).

            Surface 3 can replace your laptop (but it has no native keyboard, and can't do laptop functions without one, but it's still sold separately).

            Windows 8.x is a mobile OS (but it takes up so much initial disk space that you can't even have a 32-gig version, leaving the 64-gig pointless unless you buy external storage or give MS access to all your personal and business data on Skydrive or whatever they're calling it this week).

            MS is a device and services company (when their foray into hardware has provided us with RRODs, touch keyboards that fall apart after a few weeks, firmware updates from hell, phones that spontaneously boot on their own, etc.).

            Now MS wants to make us productive (by spending countless hours installing neverending updates, by being on the phone with tech support for hours on end trying to activate versions of Windows that suddenly lost their identities after a re-install, that was most likely prompted by a firmware bug or a completely untested MS update).

            The only thing MS is going to reinvent is customer dissatisfaction!

            :0 |
          • It just occurred to me reading orandy's post...

            Microsoft actually has a fairly easy and clear path to increase it's market share in all areas.

            1) Add massive storage to the Lumia phones. 128 GB, 256GB, 512GB, 1TB. Sell them at the same prices the others sell their phone with much less capacity.

            2) Include the touch cover with ALL surfaces in the box. NO extra charge.

            3) On the next surface, make sure to include 3 Full Size USB 3.0 ports and PLENTY of Storage. START at 1TB for the $799 model. Make it so that it is an OBVIOUS choice... just like the original iPad dominated because it was the cheapest touch screen PC ever built at the time...and it WORKED. They are still selling plenty of those and haven't moved the price at ALL.

            4) REMOVE ALL STUPID DRM... PERIOD. Activation is just stupid. Sell Windows for a decent price to consumers and let them use it on as many PCs as they want. They used to do this and that is how they became a monopoly. People just installed Windows on every thing using that one copy. You can still charge $49 for the consumers... and let them install it everywhere. The Businesses must still pay what they pay as they need MUCH more support.
          • oranty

            Maybe he should change his name. He is entertaining.

            You are right. If you read some of his posts in opposite he has some fairly good ideas. It is to bad he cannot state them in a positive sense instead of always being so negative.
          • He is a funny little twit

            to read.
          • Why not just put cash in the box

            Just put 1 grand in new bills in every Windows and Surface box. It is that simple!
            Call them Windows for People Who Professionally Hate Windows Edition. Installation media does not have to be included and price should be set to $49 before discount.
          • So what you're saying, paul2011

            Is that they should do it the same way Google does?

            How else would Google get anyone use their products, right?