Five months have passed since the appointment of Satya Nadella as the new Microsoft CEO. The company, however, has not yet shown any strong signs of growth under his leadership. We have here presented a few issues that Nadella has to focus on, to make Microsoft a force to reckon with once again.
The fortunes of Microsoft Corporation had been sagging for some time now – with things coming to a head exactly a year ago. The company shares fell by a whopping 12.2%, the biggest drop for Microsoft since 2000 (on NASDAQ). Although the share prices have shored up to a relatively impressive $45 now – Satya Nadella, the man who succeeded Steve Ballmer as the CEO of Microsoft, clearly has a serious challenge ahead, to revive the once-influential tech giant again. Here are certain things that Nadella needs to pay attention to right away:
- Finding an alternative to Windows 8 tiles – The Metro interface was created on the Windows platform to enhance user-convenience, but it has done nothing of the sort. Among the many criticisms that Windows 8 has faced, this tile-based display has been one of the worst-received. People, evidently, love the earlier Windows interface that they were familiar with – and Nadella and his team would do well to think up a solution for the Windows 9 platform. The challenge is made all the stiffer by the fact that, there is still a significant percentage of Windows XP-users worldwide.
- Forging partnerships with startups – Microsoft’s position is, yet, not dire enough for it to go Yahoo’s way of an acquisition frenzy. In fact, the cloud business of Microsoft with established players have been a decent success during the last 3-4 quarters. That said, it also needs to be highlighted that a large number of startups are entering the markets – and Satya Nadella has to start scouting for small and medium-scale businesses (which are based on cloud networking) to do business with. The way in which Google does this would give Nadella a handy cue.
- Managing the legacy of Steve Ballmer – Ballmer placed Microsoft on relatively stable grounds in February this year, before he left. Satya Nadella has to live up (in fact, improve upon) Ballmer’s performance – which is no easy task. Apart from working in collaboration with senior personnel like John Thompson (Chairman of the Board of Directors), the CEO needs to ensure that his other team members are working in sync with his strategies and plans. The focus needs to be on making everyone get a hang of the ‘Microsoft way of working’. Simply giving directives and demanding reports is not going to be enough.
- Winning over shareholders’ confidence – Market analysts from software organizations, mobile app companies, and other firms from the tech domain feel that Nadella is yet to prove his worth to Microsoft’s shareholders. This belief stems from the fact that when he was appointed as the new CEO, the company’s shares went up by a measly 6 cents (!). Nadella faces the task of proving that Microsoft has embarked on a new and revolutionary way of doing business – and is not going to remain static (which, unfortunately, has been the indication till date). If shareholders start believing, the sunny days of Microsoft will gradually return.
- Thinking beyond Microsoft Office – Microsoft Office has been a roaring success in the 2000s, and it still remains one of the most profitable offerings from the company. However, Nadella has to start considering the idea of developing virtual desktop infrastructure (VDI) – a framework that many new-age companies are in favor of. In other words, Microsoft needs to become a reliable provider of infrastructure-as-a-service (IaaS). After all, retaining a strong presence in the enterprise sector is absolutely crucial for the company’s fortunes.
- Shoring up Windows Phone – Overall, 2013 was a good year for Windows Phone – but a closer analysis would reveal cracks. Particularly during the final quarter of the year, sales figures tapered off, and the gap between Windows Phone and market leaders like iOS and Android showed no signs of decreasing. More seriously, mobile app developers across the globe are no longer particularly interested in making applications for the Windows platform (much like the situation with RIM Blackberry). Microsoft has also acquired Nokia, but Satya Nadella needs to stabilize Windows Phone first.
- Improving Microsoft Sharepoint – Yet another enterprise-related puzzle that Microsoft needs to solve. In an age where real-time customer interactions and and user-orientation are must-have qualities for web architecture systems, Sharepoint falls woefully short of the mark. Provided that Nadella is able to mastermind an improvement in Microsoft Sharepoint, he will get a first-mover’s advantage too – since no other tech vendor has been, till now, able to deliver platforms that serve as great ‘customer-engagement systems’.
- Holding on to Windows loyalists – Windows XP is done and dusted, Windows 7 has performed okay, and Windows 8 has been (let’s face it) an unmitigated disaster. As a result, many Windows-users have been forced to switch over to Mac, Ubuntu, or other desktop operating systems. Satya Nadella has to arrest this drainage of user-base – and the best way he can do this is to announce Windows 9 as quickly as possible. Of course, he will have to make sure that Windows 9 is indeed a huge improvement from its predecessor. Microsoft cannot afford another overhyped failure.
- Adopting a more transparent way of working – There have been many cases over the last few years when Microsoft has released new software, without making their interfaces and codes accessible to users. As a result, software crashes have become a much more serious issue than they should have been in the first place. Microsoft has to realize that staying tight-lipped about codes can bring back the dark days of Y2K pretty soon. Instead, people should be encouraged to know more about the backend of the MS-software they are using.
- Preventing the loss of talented human resource – Tami Reller and Tony Bates are two high-profile executives who have left Microsoft after Satya Nadella became the CEO. While it’s important that Nadella builds and manages his own team – the loss of such senior personnel does not augur well for the company. He needs to find out why the attrition rate among the higher-level workers at Microsoft is high, and frame a way to lower it. Nadella is a man of pleasant demeanor – but a smiling face is not enough to retain your best co-workers!
- Handling the Windows and Office platforms separately – Microsoft has, over the years, clubbed Office with Windows, with great results. However, the new company CEO needs to start thinking beyond those days of healthy in-house collaboration. Monitoring business would become much easier for Satya Nadella if he demarcates the Office and Windows platforms – and manages them separately. After all, even in smaller technology firms, hardware companies and even mobile application development agencies, business diversification are being emphasized upon.
- Deciding whether Bing is worth the investment – Google is the kingpin of online search services, and Microsoft’s Bing (while not bad in itself) has not even come close to challenging its supremacy. Nadella needs to take a stand on whether Microsoft indeed feels that it can overtake Google at the latter’s own game. If present trends are anything to go by, it’s not going to happen anytime soon. Microsoft might be better off if it puts the development of Bing on the backburner for the time being – and concentrate more on its hardware/software services.
In addition, Microsoft has to either develop a tablet that is several notches better than the Surface RT, or stop trying to compete in the tablet market altogether. OneDrive and Office 365 have to be enhanced, to make Microsoft a stronger provider of cloud-based services. Problems with the Xbox One also have to be resolved. Seeking the advice of Bill Gates is obviously a good idea, but Satya Nadella would do well to stamp his own authority on the company. After all, Microsoft is his to helm now, and the onus is on him to decide how to tackle the above issues.
Hussain Fakhruddin
CEO at Teknowledge Software
Hussain Fakhruddin is the founder/CEO of Teknowledge mobile apps company. He heads a large team of app developers, and has overseen the creation of nearly 600 applications. Apart from app development, his interests include reading, traveling and online blogging.
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