Nadella’s key challenges

By Graeme Burton
07 Feb 2014 View Comments
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When Satya Nadella was confirmed as the new CEO of Microsoft, it brought the company’s six-month saga to find a new leader to a boringly predictable end. While the board of Microsoft had toyed with the idea of bringing in a star CEO from outside, such as Ford chief Alan Mulally, in truth, a company of the size and technical complexity of Microsoft needs an insider who can combine in-depth technical knowledge with sound business understanding – someone just like Bill Gates, perhaps.

Further reading

While Gates will be making a come-back to focus on “special projects”, his unspoken role will also be to support Nadella as he settles in. There will certainly be many who think he isn’t up to the job and that it should be them sitting in the most expensive chair in the building.

And Nadella will require support from Gates and the Microsoft board if he is to take on the company’s well-entrenched groups and rise to the challenges that the company faces.

Windows first

Windows and Office remain the most important divisions at Microsoft simply on the grounds of their vast profitability.

On the principle that it is easier to lose customers than win them, Nadella’s number-one priority must therefore be to iron out the shambolic disaster of Windows 8. In the past, new Microsoft operating systems propelled PC sales growth. But after Microsoft launched Windows 8 in October 2012, the decline in PC sales actually accelerated.

Furthermore, the illogical split between desktop PCs, laptops and Intel-based tablet computers; ARM-based tablet computers; and then smartphones – with Windows Phone – has only confused potential customers.

This baffling combination has proved especially damaging in mobile, with the split between the unpopular Windows RT operating system for ARM-based tablet computers and Windows Phone for smart phones defying convention.

While Apple’s iOS and Google’s Android were primarily intended for mobile devices – both smartphones and tablets – the division between the two genres of mobile device has undermined the market for app developers on Microsoft's splintered platforms.

Nadella will therefore have to address these inconsistencies and prioritise the development of a user interface for Windows 9 that works well on both touch and non-touch devices.
That also touches upon Nadella’s second priority: mobile – including Windows Phone.

This will be more challenging as it is a market that his predecessor Ballmer didn’t just fluff, but let escape from Microsoft’s grasp without him even realising it as he guffawed at the iPhone and iPad.
Microsoft, for example, published a “tablet PC” specification in 2000, while Windows Mobile, the predecessor to Windows Phone, enjoyed a US market share of 42 per cent in 2007 before first Apple’s iOS, then Google’s Android, blasted it to near oblivion.

Surveys on mobile by Computing, however, suggest that Windows Phone nevertheless remains one of the operating systems on CIOs’ radar, and one they would strongly consider standardising on as part of a corporate mobile strategy.

Furthermore, with the Nokia acquisition, Microsoft will be able to offer a range of smartphone devices at much more competitive prices than Apple, while offering better security than Android.

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