Microsoft CEO Satya Nadella overhauled the company’s leadership today. There is little surprise to the timing or makeup of the changes.
Microsoft typically makes changes just ahead of the start of its fiscal year. And the new alignment underscores the Microsoft’s objective to focus on three key areas: cloud, personal computing and enterprise applications.
But two big questions weigh heavy on my mind. How does will these changes drive new revenue and profits? How will these changes affect how CIO’s relate to Microsoft, especially as regards mobility where the company efforts have been largely a swing and a miss.
I think that Nadella is clearly bringing some new magic to the way the company thinks, a renewed innovative spirit and a broader vision for the company. Today, Nadella affirmed his decisiveness to execute against his strategy.
Stephen Elop, the former device head is out, along with his second in command Jo Harlow. In a vote of confidence Terry Myerson, Microsoft’s Windows chief will lead a new team: the Windows and Devices Group (WDG). Myerson’s new team combines all of the hardware and software engineering talent into one entity – a move that is overdue, as I have said before.
But the biggest question is now what – especially when it comes to how Microsoft will compete and profit in mobile? Microsoft warned in April that may take a write down on the Nokia investment. While much of that business was shuttered last year, the device business, in general, has found profits and market share elusive. More importantly, however, the group has largely been misaligned with the requirements of Microsoft’s key customers. All this has lead to mobile efforts to lack the internal influence at Microsoft to get things done. The one immediate benefit that comes with Myerson is his political strength at Microsoft. Of course that means little to customers.
Today the mobile market presents two dominant choices. Apple’s closed ecosystem and Google’s Android, which operates under the guise of being open. The question for Microsoft’s Myerson is how will he mount a challenge that can divide and counter these two extremes?
A version of this post was originally posted as my Forbes column here: http://www.forbes.com/sites/bobegan/2015/06/17/microsofts-shakeup-the-biggest-question-is-now-what/