Nadella: Microsoft reorganisation on the way as cloud and mobile come first

By Graeme Burton
11 Jul 2014 View Comments
Microsoft CEO Satya Nadella standing

Microsoft's new CEO Satya Nadella has hinted at a re-organisation and job cuts at the software giant in an open memo published overnight.

The details will be unveiled when the company announces its full-year financial results on 22 July. "I'll say more then on what we are doing in full-year 2015 to focus on our core. Over the course of July, the senior leadership team and I will share more on the engineering and organisation changes we believe are needed," he wrote.

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The rationale for the organisation, wrote Nadella, was the recognition that computing had shifted from a PC-centric to "a mobile-first and cloud-first world". Microsoft, however, still makes the lion's share of its revenues and profitability from desktop and server operating systems, and the Office suite of software.

"Billions of sensors, screens and devices – in conference rooms, living rooms, cities, cars, phones, PCs – are forming a vast network and streams of data that simply disappear into the background of our lives. This computing power will digitise nearly everything around us and will derive insights from all the data being generated by interactions among people and between people and machines," wrote Nadella.

However, with Microsoft one of just many companies competing in cloud computing, and its mobile operating systems relatively unpopular, the company is ill placed to dominate this next wave of computing in the same way that it did in the 1990s and 2000s.

"We will create more natural human-computing interfaces that empower all individuals. We will develop and deploy secure platforms and infrastructure that enable all industries. And we will strike the right balance between using data to create intelligent, personal experiences, while maintaining security and privacy," he added.

But Nadella was less clear about what, exactly, the re-organisation would entail, and how this would change the software and services that the company offers.

"We will build the solutions that address the productivity needs of groups and entire organisations, as well as individuals, by putting them at the centre of their computing experiences... We will build tools to be more predictive, personal and helpful. We will enable organisations to move from automated business processes to intelligent business processes," wrote Nadella.

He promised that future Microsoft software would "understand the rich context of an individual at work and in life to help them organise and accomplish things with ease". The mindset of the company had to change from "software" to "platforms", which would enable third parties to build "experiences for every individual and business on the planet".

Tellingly, perhaps, he did not refer to the Windows operating system per se, but to the "Windows device OS", suggesting a de-emphasis of the company's number-one revenue and profit driver. Instead, Windows will be embedded everywhere: "Windows will deliver the most rich and consistent user experience for digital work and life scenarios on screens of all sizes, from phones, tablets and laptops to TVs and giant 82in PPI boards."

Applications, he added, would be able to "run across all device targets", while also being able to take inputs via speech, pen and gesture, as well as keyboard and mouse.

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