Microsoft CEO Satya Nadella hints at strategy change in letter to employees

Lynsey Barber
Follow Lynsey
Satya Nadella told employees of plans for Microsoft (Source: Getty)

Newly installed CEO Satya Nadella has hinted that Microsoft will embark on a new strategy in a letter to employees.

The chief said discussions with executives on the company’s future direction would take place this month with more to be revealed on 22 July when it announces full year financial results.

Nadella, who replaced Steve Ballmer in February, said the company had changed from a device and service company to a productivity and platform company:

“More recently, we have described ourselves as a ‘devices and services’ company. While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy. At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.”

Microsoft’s cloud OS and device OS and hardware, which includes the recently acquired Nokia handset business, are likely to be the main focus based on his explanation of the “core” business. A “mobile-first, cloud-first” strategy has previously been discussed by Nadella and is a marked departure from its previous focus on software under Bill Gates

The chief emphasised looking at customers as “dual users” who use technology for work or school and in their personal life.

It’s a similar approach struggling smartphone maker Blackberry took to expand from a largely business market into the more lucrative consumer space, emphasising a combining of work and life in one device, though it has been largely unsuccessful for the Canadian firm.

The 46-year-old also suggested emerging markets could become more of a focus, saying: “Microsoft will push into all corners of the globe to empower every individual as a dual user – starting with the soon to be 3 billion people with Internet-connected devices."

Nadella, who is only the third CEO in Microsoft’s almost 40 year history, did not rule out a move into new product categories in the same way as it moved into the tablet market with the Surface.

In an excerpt entitled “Our Culture”, he also hinted at potential shake up off staff, saying:

“Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving.”

Read Nadella's letter, or get an idea of the key themes from this word cloud.