One Year In, Nadella Is Planning Microsoft’s Long And Short Game

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Golfers like to talk about their long game and their short game. Maybe it’s useful to look at Microsoft’s strategy that way too. Since Satya Nadella took over just over a year ago as CEO at Microsoft, he has started to redirect the company, looking at the short term, while perhaps beginning to formulate a plan for the next wave of computing.

Microsoft is the quintessential personal computer company. It came of age with the rise of the PC and thrived in the 1990s and early 2000s by giving us the tools to operate and be efficient on those machines. Surely, we complained about it — and made many a joke about blue screens of death — but in the end Microsoft provided the fuel for the PC revolution, making its founders rich beyond measure as a result.

Over time, as we’ve witnessed the shift to mobile, Microsoft has let the mobile revolution pass it by. It wasn’t completely oblivious to it, but its attempts can be characterized as feeble swings and misses, Today, it finds itself buried in marketshare terms behind iOS and Android, which between them controlled more than 95 percent of the world market last year.

Microsoft understands that to win the short game, it needs to gain mobile (and cloud) marketshare and Nadella has taken steps to do that. Under his leadership, they have begun to make some strides by turning outward. Traditionally, Microsoft has tried to keep everyone firmly inside the Microsoft ecosystem, but lately that’s changing as the company recently passed 100 iOS and Android apps (and if you haven’t tried the new version Outlook for iOS, you should).

It’s also made some progress with its tablet push, making steady sales gains over the last couple of quarters. Perhaps, most important of all, it has Windows 10 teed up to push the mobile side as much as it can in the coming year with a new one-screen-to rule-them-all strategy, but Microsoft hasn’t stopped with the short-term view, something it could very much have been accused of doing under former CEO, Steve Ballmer.

Microsoft has also cast an eye to the future as Hololens, XBox and the Minecraft purchase all suggest, and perhaps Microsoft is trying to gain a foothold with a younger generation of users who don’t give a hoot about Windows and Office, but do care very much about gaming and virtual reality.

The Mobile Present

Even as it tries to build a new mobile vision, is only reasonable to point out Microsoft’s minute mobile market share. Such are the numbers. And it is fair to note that some of the company’s attempts to grow its slice of that market have been futile at best. The Kin project is a notable, failed attempt to boost Microsoft’s numbers, while the Zune project manages to maintain the irony of eventually shipping both strong hardware, and software, but dying regardless.

In the face of past failure, and set right next to Windows Phone’s just-sufficient-to-not-die numbers over the last five years, Microsoft is making another attempt. Put simply: Windows 10 is likely Microsoft’s last chance to get into mobile. The firm is betting the farm that a unified platform across phones, tablets, smartphones, laptops, desktop computers, and even 84 inch touch-based behemoths, will not only bring the glow of user-love to Windows, but also bolster its mobile efforts as developers flock to the platform.

Such is the goal. TechCrunch has written repeatedly that Windows 10 is certainly among the company’s most audacious software projects. Which is perfectly fitting, as Microsoft needs something massive to shake up its mobile malaise. Windows Phone has long been a capable platform that has been plagued by a lack of attention.

If Windows 10 can drive developer interest, and thus app support not only on PCs, but also on their diminutive cousins, then Microsoft can enjoy draft winds across its platform.

The Next Computing Wave Future

Yet even while Microsoft focuses its energy on the short-term of mobile, it seems to be casting an eye outward as well. We’ve seen some signs of this over the last year, particularly with the announcement of HoloLens at the Windows 10 announcement last month. This futuristic 3D holographic “Nerd Helmet” gives Microsoft a big head start in the race for the face computer with Facebook and Google. And positions it well ahead of Apple, which doesn’t offer anything like it (yet).

Chris Haroun, a partner at venture capital firm Artis Ventures, believes HoloLens, along with the XBox and the Minecraft purchase are all part of a broader strategy to capture the younger generation, who may not have any sense of 1990s computing, but surely understand gaming.

He points to his own young sons who are all under nine and already engaged with Minecraft performing rudimentary programming in the form of if/then statements. These kids see the Microsoft brand associated with this game and the XBox in general in a positive light, and that’s putting the Microsoft name in front of kids who don’t care about Windows phones or desktop PCs.

Haroun says it’s entirely possible that Microsoft is looking ahead to a new generation of virtual-reality-based computing and its placing its bets early. While he’s not writing off Microsoft’s short game by any means, — he thinks giving away Windows 10 is a brilliant move and he likes what he sees with Windows tablets — he is impressed by what he sees in the long game and that Microsoft is attempting to get ahead of it.

Putting It All Together

There was a time when Microsoft was the platform, running the PC market, then came its failed attempts to win mobile. Perhaps we’ve come full circle with its current attempts to once again take on that market, along with some long shots at the future. Where does that put the company now? In a tough transitional spot. Microsoft took it on the chin during its last earnings report proving that transformation is tough business — as IBM is learning –noting that it expects to grow a very modest 5 percent in its current fiscal year.

Rebuilding your company structure, business model and leadership team on the fly is no small game. Still, Microsoft is making immediate bets for that could bear out over the long term. The good news is that strategy is no longer a big question mark hanging over Microsoft. Instead, it’s a matter of execution. If the company can pull off its vision, it has a shot at more than just mobile, even including virtual reality computing platforms that remain more smoke than fire.

Will Windows 10 rejuvenate the PC market? Will it finally make Windows Phone, or whatever it is eventually called, relevant? Can Microsoft in fact chase market share in a mobile market that is dominated by two of its biggest rivals? And finally, is mobile as a market where Microsoft should train its aim, given that the next platform revolution is likely no more than 5 years away?

Microsoft is betting that it can fight both wars at once. We’ll know much more when Windows 10 touches down this summer. We’ll know whether it can become cool in the eyes of a new generation of users over the longer term. Regardless, this should be a fun game to watch, as Microsoft navigates the course between the present and the future.

Featured Image: Steve Jurvetson/Flickr UNDER A CC BY 2.0 LICENSE