Ben Thompson thinks the only jhope for Microsoft is a break-up, This is in parallel with what I have been saying: if Microsoft is to grown into a modern enterprise software player, Nadella will have to jettison Windows.
Here’s Thompson’s take:
Ben Thompson, It’s Time to Split Up Microsoft
For all the talk of moving beyond Windows (and Windows Phone), I am deeply skeptical that Microsoft can truly pursue its potential as a software and services company as long as Windows is around. Culture is developed over years, and for decades everything at Microsoft was about Windows. Read again Ballmer’s statement:
Nothing is more important at Microsoft than Windows
The problem for Nadella and Microsoft is that ultimately this wasn’t a declaration of strategy; it was a declaration of fact, and facts don’t change by fiat.
In other words, keep Windows as a cash cow, but be explicit that the future was in cross-platform services. Unfortunately, this was before the Nokia deal. The effects of that deal – and understanding why it was made – have convinced me that Microsoft cannot truly reach its potential as a services company as long as Windows and the entire devices business is in tow.
In short, it’s time to break Microsoft up.
I would create two companies: the devices side, which includes Windows, Windows Phone, and Xbox, and let them do the best they can to grow that 14% [the percentage of total devices running Windows COO Kevin Turner talked about last week]. Heck, make Kevin Turner the CEO. Windows profits will keep the company going for quite a while, and who knows, maybe they’ll nail what is next.
The other company, the interesting company, is the services side – the productivity side, to use Nadella’s descriptor. This company would be built around Office, Azure, and Microsoft’s consumer web services including Bing, Skype and OneDrive. These products don’t need Windows; they need permission to be the best regardless of device.
Of course, the Windows company does need Office, and Azure, and all the other Microsoft growth engines, and this cleavage would likely hasten Windows’ decline. But that’s exactly why a split needs to happen: anything Office or Azure or Microsoft’s other services do to prop up Windows – that focuses on that 14% – by definition limits Microsoft’s opportunity to address the far bigger part of the pie that ought to be the future.
We’ll have to see if Nadella does any of this, but so far all he has done is announce layoffs and cancel the Android experiment on Nokia phones.
Will Nadella be a Tim Cook or a Marissa Mayer? Will he have the courage and vision to steer a post-Ballmer/post-Gates Microsoft into a new future, or will he lose years fiddling at the margins and ‘building culture’ while Apple, Amazon, and Google come to dominate the enterprise space?