Now Microsoft knows what it has to do - but can it make it happen?

Now Microsoft knows what it has to do - but can it make it happen?

Summary: Satya Nadella has built a confident and believable strategy for Microsoft. The next step is to deliver on it.

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Satya Nadella has only been CEO of Microsoft for six months, but his impact has already been widely felt.

His comments during Microsoft's Q4 earnings call last week gave some of the clearest explanations yet of how he has sharpened the company's focus, giving it a more confident strategy for a more complicated world.

Alongside the by now well-practiced 'mobile-first, cloud-first' slogan, Windows remains the core for Microsoft under Nadella (hence its recent decision to say goodbye to Nokia's Android handsets), but it's a core that's being approached in a pragmatic fashion (hence the launch of Office on the iPad).

On the earnings call, Nadella talked about the drive to reduce some of the complexity and overlap in its Windows engineering efforts, sparking misplaced excitement over what was thought to be a new OS move, but was really an initiative that's been going on for quite some time.

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Microsoft goes internal for its next CEO with Satya Nadella

Microsoft goes internal for its next CEO with Satya Nadella

What does this mean for the future of the devices and services company?

But that wasn't the only important internal rethink that's going on — his comments about Microsoft's approach to "dual-use" technology were interesting too.

"Everything we do starts with digital work and life experiences to delight dual-users – these are users who use technology both at work and in their personal lives. This is how we re-invent productivity," he said, noting that this means product teams for OneDrive and OneDrive for business, Outlook and Exchange and Skype and Lync are one team all focused on these dual-user scenarios.

He went on to clarify this a little later by saying: "When I think about productivity it doesn't separate out what I use as a tool for communication with my family and what I use to collaborate at work."

Now that might be the case for him, but it's not the case for most people. While the world of work remains for the most part solidly Microsoft, the consumer world is far more fragmented. When workers switch off their Windows PC they may well pick up an Android tablet or an iPhone instead.

Microsoft's challenge is persuading people to stick with Windows outside of the nine to five, because providing a better consumer offering is an important component of Microsoft's enterprise strategy in the long term.

Historically, that's something it's had mixed results with. Windows Phone is finding it hard to make progress in the mobile market, and is still a long way behind iOS and Android. Windows tablets have been underwhelming and it's still very early days for Microsoft's own Surface line.

Price is a big factor for consumers and Microsoft seems to understand that now — Nadella highlighted that Windows and Windows Phone licences are free for OEMs building a device under nine inches, and there's a cheap Windows licence for manufacturers who use Bing.

This, plus the lower hardware spec Microsoft requires of its manufacturers, means there could be a bumper crop of cheap Windows hardware by Christmas, he said: "This holiday season I think you'll see a lot of value notebooks. You'll see clamshells."

Whether these new devices can ignite consumer interest will be important. Nadella understands how the consumer and the business markets fit together for Microsoft. Much now depends on turning that strategy into reality.

ZDNet's Monday Morning Opener is our opening salvo for the week in tech. As a global site, this editorial publishes on Monday at 8am AEST in Sydney, Australia, which is 6pm Eastern Time on Sunday in the US. It is written by a member of ZDNet's global editorial board, which is comprised of our lead editors across Asia, Australia, Europe, and the US.

Previously on Monday Morning Opener

Topics: Enterprise Software, Microsoft

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  • free under 9 inches :)

    Q: What is the difference between a display that is 7 inches at 1920x1080, and a display that 24 inches at 1920x1080?

    A: None.

    So why the price difference?

    I guess what vendors will have to do is make desktops with a 3 inch display... and let users plug in a 28 inch monitor with a free Windows license....

    Joke there - I know that won't happen.
    jessepollard
    • actually alot...

      Looking at the market that is.
      Something targeted by OEMs for a 24" screen is going to be a desktop running an i-series processor with 8GB+ memory, at least 512GB storage. Something targeted at 7" screen by OEMs is more likely running Atom or ARM with 2GB memory and starting with 32GB storage.

      That's like saying what's the difference between an SUV and a city car because they both use petrol... It's a completely different target audience and what the person buying it expects it to be capable of is 2 completely different things (typically - there's always going to be a small crowd who buys a tablet and expects to use it like a desktop).
      aesonaus
      • From the software point of view...

        there is no difference in the display.

        How the user chooses to USE that display is totally external to the software.

        Remember the simple $20 VR headset? Uses an Iphone... with a small display. Yet to the user it appears to be a 40 inch 3D display.

        No difference in hardware, yet a huge difference to the user.
        jessepollard
        • Point?

          I read nowhere that MS claimed there was any SW difference as reason behind this move. It's a strategic move intended to get more Windows into the consumer market on the fastest growing HW platforms, with an understanding that these platforms are first and foremost consumer/personal devices (i.e., phone & tablet).

          On the desktop, the OS is a more conspicuous and conscious part of the HW decision-making process. On mobiles, not so much. Also, OS licensing on desktop tends to be a smaller percentage of the OEM cost structure than on mobile.

          Say hello to the Tinman the next time you see him, Strawman.

          P.S. Jokes are supposed to be funny. I think you meant to use "satire".
          Nierteroth9
          • Satya Nadella

            Is nothing more than a foreign-born carpetbagger. He's evil.
            harry_dyke
          • Such comments are uncalled for in any civil society. Shame on you.

            NT
            M Wagner
          • So

            If he can do the job, why should we care where he's from? It's not like there is any constitutional requirement that officers of US corporations be US citizens. I assume his visa is current, so I don't think there is any rational objection to him based on his nationality.
            John L. Ries
          • Hiis user name is SATAYN

            Remove the Y and it becomes SATAN.

            Satan made a deal with Bill Gates to become the richest man in the world in exchange for his soul and control of Microsoft in 2014.

            LOL!
            orion_blastar@...
          • Microsofts' real issue is not technological!

            If Microsoft had been making deals with the devil, Win8 wouldn't have been so terrible. Even the devil has more taste than that. No, Microsoft is making deals with Jesus so we will be reminded of him when using Windows. And it's working great! I scream at him all the time!
            shiitaki
          • License is supposidly free for devices below 9"

            So putting 3 inch display on a desktop machine would be perfectly valid... Just because the USER chose to plug in a 24 inch monitor...
            jessepollard
          • Jokes can be satiric

            But I admit, it would be/is more satiric.

            And jokes don't have to be funny. A number of them are just painful.
            jessepollard
        • smaller screen =lower cost of build

          A smaller screen means less cost to build so you keep the cost lower by offering the os for free . Lower build cost =lower cost to consumer = more people buying the product = higher market share. If you don't understand that then there is no use saying anything more.
          dave0420
          • Not necessarily. Miniaturization often costs more.

            Carriers often want $600 or more (every two years) for a smartphone without a contract. A descent (Intel Core i3/i5) Windows notebook can be had for under $400) and it will last me five years or more.
            M Wagner
          • Cellphone Ripoff

            Cellphones (including the horrible iPhone) are made by slave labor in China then the price is marked up 1,000%!

            They could sell the iPhone and Android phones for $100 and make a profit.
            jimbritttn
          • The ICs are not and they can be pricey

            It is more complicated and expensive to build hardware than you think. There's more to the cost than the Bill of Materials. Huge development and tests costs. But even if you look at it strictly from materials and assembly many hardware devices are manufactured at a loss! The ICs have to be fabbed using extremely expensive equipment. Many of them are bought off-the-shelf, for example, broadcom, snapdragon processor and these aren't cheap. Lithium Ion batteries aren't cheap either and no you can't build this stuff with an army of underpaid workers. Extremely expensive (billions) fab houses have to make these ICs. The boards uses gold plating and high quality highly dense connectors. The high resolution displays are also expensive.
            MeMyselfAndI_z
          • Putting them together only perhaps...

            I work in an Industrial Electronics company, as a PCB design, and thus electronics are not only my hobby, but also my livelihood... I design microcontroller driven motor-starters and relays, home automation, etc etc....

            The iphone / nokia mainboards, built in China, are second to none in quality. Opening one up can see the level of quality required to get all those components in startingly precise positions and soldering. It is definitely NOT a HUMAN JOB, but one done by Pick and Place Machines...

            The slave labour could be brought about when putting the phones together, indeed... but the R&D required to bring iphones, samsungs and nokias to life is definitely not cheap at all...

            Huawei 3G receivers, A7 processors, camera lenses, RAM, lithium ion batteries... definitely not cheap at all....
            grillomalta@...
          • You can't know that. For instance, the cost of living in Boston or ...

            ... San Francisco is much higher than in Nashville, Indiana and so is the average salary. You cannot call Chinese workers in China slave labor unless you know for a fact that they are paid well below the going rate for middle class workers in China.
            M Wagner
          • That part it true

            and they put nets on the roofs to catch the jumpers. They build dorms so they don't have to go far from work. American manufacturing is using machinery and a skilled operated is required. The factories in China build their products by hand with the workers doing repetitive tasks all day long.
            Orlbuckeye76
          • We are not talking about miniaturization

            While your comparison of a phone to a laptop is a good example it does not apply here. A phone or tablet have already have a cost of building. Any reduction on this will allow A) Sell at a lower price. B) Allow a large profit in a narrow profit market.

            The mean for any OEM to sell at a lower price and gain more market share or create incentive for OEM to build a Microsoft phone or tablet because they can get a little more profit.

            Look at Intel chips wafer. Not only they made the wafer bigger but was able to make more chip out of every single wafer, lowering the price of chips. The same principle applies to screen. At certain size, OEM can produce more screen from the LCD glass which lower the cost. All the electronics have already reach a maturity states with the cost being constant. So having a cheaper screen, a smaller battery and a free OS will reduce the price of the tablet or phone.

            The next step of miniaturization will cost more, but at the end after certain time the cost is reduce. It's the initial R&D what keep cost high. This is why when a new Intel chip comes out the old one (only 6 months) gets a cut in price. Making them has comes to lower cost, but the R&D for the new one is what dictate the new high price. It still cost the same to make them, but someone must pay for all that R&D.
            jazzy2945
          • The Neurochip

            one day a computer will be a Neurochip they install in your brain.

            Then you have to be careful what OS you use, don't want one that locks up and crashes and gets viruses.
            orion_blastar@...