Microsoft already has software and services like Skype, Bing, and OneDrive that work right now on 100% of that pie; it’s only a matter of time until the same can be said for Office. That is the opportunity; to even think about the share of devices, particularly at the executive level, is to handicap Microsoft’s greatest chance for growth before it even truly gets started. It’s not just that Windows is no longer Office’s only market that matters; it’s that Windows and Microsoft’s devices focus is actively damaging Office’s prospects.
I would create two companies: the devices side, which includes Windows, Windows Phone, and Xbox, and let them do the best they can to grow that 14%. Heck, make Kevin Turner the CEO. Windows profits will keep the company going for quite a while, and who knows, maybe they’ll nail what is next.
Interesting way of thinking about it. And I absolutely agree with the thrust of what Ben is saying here. However, I don’t think it requires splitting Microsoft into two companies. I would still push to keep Windows as a cash cow, make it clear to my employees (and constituents) that we’re no longer pushing Windows on all devices, that it will remain a PC-centric OS and just extricate myself from the device business entirely; except for Xbox, simply because it’s an area in which I still think they can win the lion’s share of the market.
Microsoft announced today that they’ll be eliminating a total of 18,000 jobs today, the largest cut in company history. Basically, the brunt of these jobs are holdovers from the Nokia acquisition. From Ina Fried at Re:code:
Some 12,500 of the cuts are coming from the Nokia Devices and Services unit–roughly half that unit’s workforce. The company said it expects pre-tax charges over the next four quarters of $1.1 billion to $1.6 billion for severance and other costs.
In the same vein, the folks working on Nokia X, the handset Nokia was producing with Android (!) even while being acquired by Microsoft, will now start building those phones for use with Windows OS.
Kevin Tofel from GigaOM expects Microsoft’s strategy for Windows Phone to focus on emerging markets:
Now that Microsoft has effectively killed off Android as the software on the inexpensive Nokia X handsets, it’s clear the company thinks it can provide solid Windows Phone experiences for a low cost. And according to Elop’s note, that’s where the focus will be going forward: In the budget-friendly segment, particularly where the company already has a market-share foothold.
I think there are fundamental problems to this approach (see the comment I left on the article) but ultimately, Kevin’s right in the sense that given where they are, it’s probably their best strategy. And my feeling is, if it doesn’t work, Windows Phone is finito. I can’t see how they can continue to absorb those kinds of losses and it’s a monumental distraction from their focus on cloud, productivity and mobile enterprise: areas where I think Microsoft can still win as a business.
Finally, Om Malik takes a look at ex-Nokia CEO Stephen Elop and the overarching issue of the Valley’s culture of rewarding failing executives with huge compensation packages:
And Nokia, the once haloed and peerless brand when it came to phones was sold to Microsoft for relative pittance. Elop heads up Microsoft’s Devices Group. Think of it this way — since Elop took over as Nokia CEO, the company has cut over 50,000 jobs (if you include today’s announcement.) That is just mind boggling.
Hard to argue.
From Satya Nadella’s employee memo released earlier today:
Apps will be designed as dual use with the intelligence to partition data between work and life and with the respect for each person’s privacy choices. All of these apps will be explicitly engineered so anybody can find, try and then buy them in friction-free ways. They will be built for other ecosystems so as people move from device to device, so will their content and the richness of their services – it’s one way we keep people, not devices, at the center. This transformation is well underway as we moved Office from the desktop to a service with Office 365 and our solutions from individual productivity to group productivity tools – both to the delight of our customers. We’ll push forward and evolve the world-class productivity, collaboration and business process tools people know and love today, including Skype, OneDrive, OneNote, Outlook, Word, Excel, PowerPoint, Bing and Dynamics.
I think it’s great that they’ve embraced a cross-platform strategy for Office and the rest of their productivity suite. Windows is still, obviously, a successful business and will continue to be for a long time. I’m still unclear though as to where their hardware strategy (of the non-Xbox variety) fits into the current ecosystem. The Surface doesn’t do anything for me; it’s a laptop that’s really trying to be a tablet and it isn’t really effective at either. Windows Phone is lagging so far behind iOS and Android it’s hardly even worth mentioning. Those are two major product lines that seem to be doing nothing but siphoning money from the more successful things that MSFT is doing already.
I don’t think they want to punt completely on mobile/tablet hardware yet. But it’s awful hard to see why they wouldn’t just focus on software: fleshing out Office for iOS and Android, making Cortana cross-platform and a viable alternative to Siri/Google Now, etc. They seem to want to move from the past into a post-PC vision but they’re not quite ready to let go of that rock completely just yet.
In just over a month, Office for iPad has picked up another 15 million downloads of its applications. Microsoft reported 12 million downloads in early April, and 27 million today.
What I’d like to see are more than just downloads but actual engagement metrics: are people using it solely for existing documents? Are they actually creating spreadsheets/decks etc. from scratch?
So I agree with Ben to the extent that the stores clearly help Apple as a company, particularly when it comes to less sophisticated consumers who may need help with some of the basics. Ben also argues that they’re probably under-appreciated in that regard. I agree. However, I’m less inclined to agree with this:
The lack of something similar to the Genius Bar makes low-end products a much less attractive alternative
Perhaps, but stated another way, has the proliferation of Microsoft stores made people more likely to buy a Surface, knowing their concerns about the product can be addressed by someone in-store? It doesn’t seem that way. Microsoft apparently doesn’t publish their retail data and I haven’t see anything elsewhere that would support the theory that the Microsoft stores have, since their introduction in 2009, done anything to push more product.
To me, low-end products are much less attractive precisely because they’re inferior products, in the way most consumers come to that conclusion:
-My friends don’t use them
-They don’t have the software (apps) that I use on a regular basis
-They have a learning curve that I don’t have the time to invest in, after having used device X for Y years
So while the Apple Stores continue to be of importance to Apple in helping them push more product, I don’t think that same theory holds as a general rule for the industry. Having a rep or MSFT’s own equivalent to a “genius bar” hasn’t seemed to mitigate the product gap in any substantial way for Microsoft, as an example. Although it will be interesting to see how Google fares with this, as they gear up for their own retail experience in the US after having opened a few Android-specific stores in Europe and Australia.
I imagine it’s probably quite good considering it’s come out after Siri and Google Now and that the team working on it has had some time to learn from Apple & Google’s mistakes in building a voice recognition platform for mobile that’s functional. But with all of the uncertainty surrounding Windows Phone at the moment, it seems like it may not be the time or place to be investing huge amounts of time & money into this.
Microsoft is still working on Office for iPad, and it could debut before July, reports ZDNet’s Mary Jo Foley.
The new timeline on Office for iPad reportedly may have it released even before Microsoft ships its first version of a touch-centric Office for Windows 8, reportsZDNet. It sounds as though Microsoft was hesitant to approve Office for iPad ahead of a touch-based Office for Windows 8 — a glaring absence and a highly desired option — but executives apparently changed their mind late last year.