Scaling the cloud strategy- my view on Satya Nadella, the new CEO of Microsoft

I think Microsoft have a four way business domain split to contend with in their business strategy going forward. The enterprise server and hosting business; the software applications and solutions, their gaming and entertainment services and of course the mobile devices and operating systems. This is not untypical of other large platform founders trying to cross from the old IT systems to the hyperconnected digital world. I personally think Satya is a good choice and a logical place for Microsoft to focus on “scaling up” and converging their portfolio across the four domains. I think their first priority is to focus on the indisputable shift to cloud services in all areas and to strength uses of bing, skype, yammar and other social platforms into main stream Microsoft products.

I often have difficulty explaining that “disruptive innovation” does not always mean a violent reactionary shift to beat competition with a step change. The iPhone and iPad where such events in truth as was the google chrome and amazon supply chain transformations. But these were using existing technologies in new combination ways. I think Microsoft can recompete by redefining combined services and user experience which I have often seen with their thoughtleadership from Microsoft Labs. A second priority I see then is how Microsoft technology will be used in “digital clusters” or groups of technologies going forward. Microsoft has the ability to grow its strong xbox offering into a home services platform and for this to potentially expand beyond this into a wide range of services. It also has the potential to expand its presence in mainstream enterprise data centers and software as a service like office365 into a cross platform and mobile device service. Microsoft has strong competition who can manage integrated mobile and web site services but they too are still trying to integrate and position for the next growth which I believe will be in the expansions of “internet of things” services.

As the founder of Deepmind recently acquired by Google, Demis Hassabis said he believed the biggest advances in the coming decades are going to come at the interdisciplinary boundaries. This is where different technologies will cross between different disciplines like home, retail, transport and services in a much more integrated way. I believe Microsoft still have natural advantages of “platform centricity” that it can exploit strategically to grow new services and solutions.

The challenge for Satya will be if he can satisfy shareholders wanting to split and refocus the group and the reorganization he may need to undertake necessary to bring these converged technologies to reposition Microsoft as the leading home, enterprise and other internet of things services platform of the 21st century.

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