It has been somewhat amusing to watch, but Microsoft’s horrifically managed businesses and Johnny-come-lately practices may actually be coming to an end. That isn’t to say Sayta Nadella, Microsoft’s new CEO, won’t make his own set of mistakes, but if his rhetoric matches the actual direction of Microsoft’s overall business, the slow motion train wreck Steve Ballmer was engineering over the past decade may be grinding to a halt.
Steve Ballmer’s idea that Microsoft could truly be all-things to all people in every market was pure folly, mixed with a heavy dash of hubris. His belief that the software giant continued to be the only 800 pound gorilla in the tech world was absolute arrogance and denial, culminating into one undefined direction for the company. So far it appears Nadella has a better grip on reality and a shaper focus for the company moving forward, as he is preparing to axe the irrelevant.
Last last week Microsoft announced that since the release of the Xbox One in November 2013, it has lost the company $400 million. Xbox One and Xbox 360 combined for only 1.1 million units sold during the last quarter. Under Ballmer leadership, Microsoft spin and denial would have emanated from Redmond, WA. Not so under Nadella. The Xbox report was almost an admission of failure. Nadella has a much better pulse of the company and how the unsuccessful gaming division may not be around much longer (at least not flying under the Microsoft banner). Speculation is that the division will be sold off, removed from the Microsoft portfolio. Nadella appears to be ending the bleeding and lack of focus for Microsoft.
Nadella’s Microsoft looks to be exiting unprofitable consumer markets, as they are not loss leaders, helping Microsoft gain footholds into new markets, but instead flat out losses. XBox is getting trounced by Sony’s Playstation 4, and even the Wii U. Losing money and poor sales are an ominous sign for a product that has at least four more years as-is, before receiving a major update.
Microsoft's purchase of Nokia and their Windows Phone division, which is seeing the brunt of Nadella’s 18,000 employee layoff, is another area which has neither been successful, nor appears to be within the scope of the new Microsoft. Like Steve Jobs, Nandella is chopping the irrelevant and giving up on lost markets. As an Apple user, it is somewhat strange to see a nearly down and out adversary finding bottom and possibly turning their business around. Here's to hoping Nadella’s new Microsoft keeps Apple sharp, even though we will thoroughly miss Ballmer's inept leadership, however, if we need a such a fix, there's always the Steve Ballmer's L.A. Clippers to keep an eye on.
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