Microsoft Investors wants Nadella to scrap Xbox, Bing and Surface?

The above suggestion was once attributed to Elop as his supposed plans should he become CEO. Despite Nadella being the new CEO, these suggestions chime in all over again according to the Washington Post.

Two influential Microsoft shareholders have been pushing the Redmond software giant to abandon what they view as non-essential product lines so that Microsoft can focus on its core strength: selling enterprise software to businesses.

http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/05/investors-want-microsofts-new-ceo-to-kill-xbox-bing-and-surface/

But doing so goes against the new direction of ‘Devices and Services’ company. Though Nadella did say, under his tenure, MS would be ‘Mobile and Cloud first’, there’s nothing to stop Xbox, Bing and Surface being part of mobile and cloud. Since November, there’s been whispers that MS should ditch the consumer segment all together and focus on business.

A former MS employee tells Washington Post that if a product doesn’t sell, it doesn’t make it into marketing. Perhaps why Windows Phones weren’t a part of Microsoft’s Superbowl ad? :p

“Marketing at Microsoft is mostly about sales,” the former employee said. “And sales is largely about products. So if your product doesn’t sell, it doesn’t make it into marketing.”

Microsoft apparently has very specific ideas on what products are. Innovation may never see the light of day if it doesn’t fit into current offerings. But that’s the kind of thing Nadella needs to stop and he has previously said the New Microsoft will ruthlessly remove obstacles to innovation.

Xbox One seems to be making some positive sales in this next gen wars, despite the massive uphill struggle in the poor xbox one launch. Bing, I can’t say much about bing but the bellow comment does. As for Surface? There’s potential there to make it into a hit device. Especially now with Nokia devices and services in the mix. I’d love to have an 8 inch full Windows 8.1 Pro, like the Dell Venue 8 pro or the new Lenovo tab. That’s just around the perfect size to be light and portable but have a big enough screen to be productive. And something like the Dell is very competitively priced. The potential is all there for MS to be successful; the biggest obstacle is Microsoft’s internal clunkiness.

This was previously the top comment on Reddit at the time I came across the post.

Microsoft is a tech company. The day it stops stretching into related areas is the day it begins to spin down into irrelevancy.

To investors, there are 2 types of companies: growth and income. Growth companies are pushing things forward, reinvesting profits in massive R+D to grow and capture market share. Income companies are mature companies with large market shares who should focus on their strengths to maximize profit.

This model mostly works in classical manufacturing companies, but for tech it’s crap. IBM is a case study of a technology company that squandered opportunity for the sake of acting like an Income company. Since MS has massive market dominance in Office and OS, these rent-seekers want the focus there.

But that same focus would make Microsoft irrelevant within a generation. They need to be in Bing, Surface, Xbox, etc to have in-house knowledge of how these things work and should ideally interact with their now established products.

Folks seem to take issue with my charactrization of IBM. Yes, IBM has been/is enormously successful. But there’s no denying that they missed the boat on personal computing, despite having all the pieces in the palm of their hand. Imagine an IBM where Microsoft is a division, and you’ll see what I see that leads me to say IBM squandered an opportunity, in order to protect/focus on their cash-cow centralized computing model, which is still a cash-cow today.

It’s exactly the advice Microsoft is being given around spinning off Bing etc… focus on the money makers and dump the rest. But think of what might have been for IBM…

If that makes no sense, perhaps catch up on the history of the PC.http://en.wikipedia.org/wiki/History_of_personal_computers

Microsoft has the resources to have the luxury to not simply focus only on the cash cow. They must, as the comment above from Reddit, continue growing beyond their comfort zones.

Via: Reddit

Category: Nokia