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Satya Nadella's mobile focus could turn Microsoft's fortunes around

Analysis But it's not going to be easy
Tue Feb 04 2014, 15:30
Satya Nadella the new CEO of Microsoft

PC SOFTWARE GIANT Microsoft named Satya Nadella as its next CEO today, and he will take over from Steve Ballmer immediately.

Nadella, who previously held the position of Microsoft EVP of cloud and enterprise, said he was both "honoured" and "humbled" to have been chosen to take over the reins at the firm, but it's fair to say that the 46-year-old has a tough job ahead of him, with the company facing many challenges.

Microsoft is in the midst of a Windows 8 backlash, with consumers and businesses shunning Microsoft's latest operating system due to its unfamiliar user interface. While Microsoft has claimed that its tiled Metro interface makes navigating Windows easier than ever, most users have disagreed and found the operating system incoherant, which has led to a steep decline in PC sales worldwide.

It's not just Windows 8 that is causing Microsoft trouble. Despite huge fanfare surrounding its launch, Microsoft's Xbox One is struggling to compete against the Sony Playstation 4 (PS4), which reportedly is outselling the console by a three to two margin in the UK.

Windows Phone is also reportedly struggling, with iOS and Android continuing to dominate the mobile market. Despite cementing itself as the number three mobile operating system ahead of Blackberry, sales of Windows Phone devices are reportedly stagnant, with the operating system recently capturing just four percent of the global mobile market.

So, is Satya Nadella the man who can turn Microsoft's fortunes around?

While some might argue that Microsoft should have chosen an external candidate to bring a fresh vision to the company - Ford's Alan Mulally or Nokia's Stephen Elop, for example - Nadella's apparent focus on the mobile market and cloud computing could be just what the firm needs to halt its decline, as this likely is the sector that the firm needs to dominate going forward.

While Nadella certainly doesn't have the experience Elop does in the mobile market, in an internal note sent to Microsoft employees on Tuesday Nadella affirmed that mobile was a key focus for him, and for Microsoft going forward, showing that what he might lack in mobile experience he makes up for in vision.

"While we have seen great success, we are hungry to do more," he said. "This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places - as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world."

Analysts agree that a mobile focus is what is needed to turn Microsoft's fortunes around, with consumers and businesses slowly moving towards mobile phones and tablet devices, and mobile apps seemingly driving the future of the technology industry.

However, analysts also agree that Nadella will face a challenge in doing so, as while 90 percent of PCs run Windows, only four percent of smartphones do, and an even smaller share of tablets.

"I would advise him (Nadella) to take a fresh look at mobile, or bring in some talent who really understands the [market]," said David Smith, an analyst at technology market research firm Gartner.

Ted Schadler, an analyst at Forrester added, "Microsoft has to be present on every device. They can't be captive to Windows or Windows Phone. When you look at the applications that are on the rise to support mobile, it is not Microsoft with Word, it's Dropbox or Evernote. It's really about being everywhere."

Given Nadella's background in both the cloud and enterprise markets, perhaps we'll finally see Microsoft Office for the iPad, which could make a huge impact for the company in the mobile market. µ

 

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