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Microsoft affirms strategy: productivity, cloud and mobile

Microsoft has affirmed its strategy going forward in the 2015 financial filing, with three main priorities in the near future:

  1. Reinvent productivity and business processes.
  2. Build the intelligent cloud platform.
  3. Create more personal computing.

Interestingly, no mention of the PC sector in this strategy, although Microsoft CEO Satya Nadella is confident the company will reach one billion customers by 2017. The “more personal computing” leads into the Windows 10 goal of being available everywhere, on mobile, tablet, PC, TV, Xbox and even in augmented reality.

Windows 10 is receiving a ton of good reviews, unlike its predecessor Windows 8. The changes made and the open insider beta seem to have paid off for Microsoft, winning over millions of customers who may have stayed on Windows 7 otherwise.

The productivity and business priority focuses on Microsoft’s service bundle: Office 365. With the launch of Sway, OneDrive and Skype Translator, it is clear Microsoft wants to be a big player in the services market. It already has the old guard: Word, Powerpoint, Excel and Skype, but these new applications serve as renewed attempts to capture a mobile audience.

It appears to be working. Office 365 is growing at a strong rate, catapulted by schools and offices switching to the subscription service. Deals like free OneDrive storage for Office 365 subscribers only make the service more valuable to students and employees.

The second priority is Microsoft Azure, its enterprise platform. This is also growing at a fast rate, with 88 per cent growth in the first quarter of 2015. The cloud platform is competing with Amazon Web Services, Google Cloud Platform, Salesforce and IBM, and currently holds second place in most of the sub-markets.

This focus on mobile, cloud and productivity is much clearer than the convoluted vision of Steve Ballmer a few years ago. It looks like Satya Nadella has changed the culture at Microsoft to a company with purpose.

Not everything is crystal however, Microsoft had to write off the Nokia Devices & Services acquisition; Windows 10 Mobile doesn’t appear to offer anything innovative; Xbox is still on the sidelines and Groove Music seems like a half-baked attempt to compete in the music streaming market without any strong investment from the company.

Microsoft is learning from past mistakes and starting to focus, but Nadella still needs a good few years before he can start throwing away or selling off some of the underwhelming parts of the company.