Microsoft is a ‘productivity and platform company’ now, Nadella says

Microsoft’s Satya Nadella is leading the company toward a new brand.

In a memo hinting at operational changes coming soon, Nadella gave employees today a new phrase with which everything Microsoft should be described.

The company is hereby no longer about “devices and services,” which Nadella’s predecessor, Steve Ballmer, preferred just one year ago.

Instead, Nadella declared, Microsoft is a “productivity and platform company,” for people, teams, and whole companies.

The new “core” mission amounts to a recognition of the challenges of selling devices alongside technology giants like Apple and Google. Frankly, Microsoft’s device businesses — apart from the Xbox — haven’t done very well. It’s also an acknowledgment that plenty of other companies sell software similar to the ones Microsoft offers.

In reality, the vision is not that new. It’s a return to the way Microsoft ran its business in the 1990s and 2000s, when its mission centered on Windows (the platform) and Office (for productivity). The difference is that now it’s doing platforms and productivity that work on mobile devices and cloud infrastructure.

Nadella says he intends to make Microsoft focused on getting things done and enabling others to build experiences. Whether that vision will become reality is an open question.

But at least the vision is not the same, stubborn path Microsoft has opted for in the past few years.

Some things will not change in this new phase.

Nadella is maintaining his belief in the “mobile-first and cloud-first world” in which Microsoft will do business. Nadella has talked about that since day one as chief executive, and that’s continuing.

Nadella is also keeping up his talk about the importance of a single experience spanning multiple devices, which benefits application developers and consumers alike.

Following recent product announcements in this direction like Cortana personal assistant and “a cloud-based machine-learning service,” Nadella sees the company rolling out additional “tools to be more predictive, personal and helpful,” and technology for “dual use” for work and personal stuff.

And certain devices aren’t going away. Nadella called out the Surface Pro 3, calling it “the world’s best productivity tablet.” And Microsoft, he wrote, “will build first-party hardware to stimulate more demand for the entire Windows ecosystem” and “responsibly make the market for Windows Phone.”

Xbox, too, will stick around.

“The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming,” Nadella wrote. “We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation.”

But changes could be coming internally at Microsoft, which employs more than 127,000 people worldwide.

“On July 22, we’ll announce our earnings results for the past quarter and I’ll say more then on what we are doing in FY15 to focus on our core,” Nadella wrote. “Over the course of July, the Senior Leadership Team and I will share more on the engineering and organization changes we believe are needed.”

In essence, the company will change the way it thinks of, produces, and sells products.

In order to deliver the experiences our customers need for the mobile-first and cloud-first world, we will modernize our engineering processes to be customer-obsessed, data-driven, speed-oriented and quality-focused. We will be more effective in predicting and understanding what our customers need and more nimble in adjusting to information we get from the market. We will streamline the engineering process and reduce the amount of time and energy it takes to get things done. You can expect to have fewer processes but more focused and measurable outcomes. You will see fewer people get involved in decisions and more emphasis on accountability. Further, you will see investments in two new or combined functions: Data and Applied Science and Software Engineering. Each engineering group will have Data and Applied Science resources that will focus on measurable outcomes for our products and predictive analysis of market trends, which will allow us to innovate more effectively. Software Engineering will evolve so that information can travel more quickly, with fewer breakpoints between the envisioning of a product or service and a quality delivery to customers. In making these changes we are getting closer to the customer and pushing more accountability throughout the organization.

How all of those changes will affect Microsoft products is hard to say now. But at least Microsoft could be headed for more intelligent product decision-making.

Nadella also seems keen on giving employees more freedom and training opportunities.

“We will change the process and mindset so you can more seamlessly move around the company to roles where you can have the most impact and personal growth,” he wrote.

He’ll also move to “flatten the organization” — which sounds a bit like the spirit at Google.

And with Google and other companies executing fast in mobile, cloud, and other arenas, the new direction sounds more than reasonable.