Words matter. And if the words chosen by Microsoft CEO Satya Nadella for the long mission statement he issued Thursday were any guide, the technology firm's two-year-old "devices and services" strategy is dead.
"The most visible sign of this [strategic break with the Ballmer era] is the dismissal of 'devices and services" as the descriptor of Microsoft's strategy and mission," argued Jan Dawson, chief analyst at Jackdaw Research, on his blog Thursday.
Yesterday, Nadella, who took charge of Microsoft five months ago, delivered a 3,100-word email to the company's 130,000 employees that both summarized thoughts he had expressed since his first day on the job and elaborated on his vision of Microsoft's aims and hopes. Microsoft published the message on its website.
Among those thousands of words, Nadella virtually ignored the turns of phrase that his predecessor, Steve Ballmer, had used to describe a switch in corporate strategy that began in October 2012. Then, Ballmer coined the mantra of "devices and services," using the line seven times in a landmark letter to shareholders as he described a pivot from the company's decades-long tradition of selling packaged software.
Until he stepped down on Feb. 2, 2014, Ballmer relied on "devices and services" as the shorthand for the new Microsoft, one that would make its billions selling hardware and both consumer-oriented and enterprise-centric services. The Surface tablet and the Office 365 software-by-subscription push became the poster children for a strategy Ballmer bet on to remake the giant and regain ground it had lost to rivals Apple, Google and Amazon.
As far as Nadella's concerned, "devices and strategy" is yesterday's news.
In his email, Nadella called on the phrase just twice, both times only to dismiss it as irrelevant. "More recently, we have described ourselves as a 'devices and services' company. While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy," Nadella said (emphasis added).
Nor did Nadella retain other Ballmer phrases used in 2013: "family of devices" and "high-value." The former Ballmer rolled out in July of last year when he launched a major corporate reorganization meant to make the "devices and services" mission possible; the latter was prominent in his final letter to shareholders.
Ballmer utilized "family of devices" 10 times just weeks before Microsoft added to the Surface line by announcing it would buy the handset business of Finnish firm Nokia. "High-value" was a buzzword Ballmer called seven times in his shareholder letter, more often than the words "employees" (1), "strategy" (6), "customers" (3), or even "family of devices" (3), the watchword just three months earlier.
Nadella ignored both expressions yesterday even though he had relied on them before -- notably on his first day -- and came close Thursday to "high-value" only once, when he said, "We will continue to innovate with higher level services like identity and directory services..."
Instead, Nadella turned other phrases, both old and somewhat new.
Of the latter, "digital work and life" took pride of place with 13 uses in the email, such as "We will deliver digital work and life experiences..." and "Our cloud OS will also run all of Microsoft's digital work and life experiences."
Right behind was "mobile-first and cloud-first," wording Nadella first trotted out his opening day as CEO, and has reiterated constantly as a, if not the, primary message from Microsoft.
And as many observers and analysts noted, Nadella hammered "productivity" into the email, using it 19 times, a tally that thrashed "consumer," which he penned just once. "Productivity and platform" turned up three times. "We will reinvent productivity..." Nadella asserted twice, and used variations another two times.
In one sentence, Nadella combined the two to come up a new synopsis of his strategy. "At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more," he wrote.
Experts on Microsoft liked what they read.
"Overall, I saw some promise there for enterprise customers," said Rob Helm, an analyst with Directions on Microsoft, and like most of those at the Kirkland, Wash.-based research company, a former Microsoft employee. "He flagged productivity and platform, which was an extension of the enterprise roadmap."
"I like this strategy better than others I've seen from Microsoft over the last five years or so," said Patrick Moorhead, principal analyst at Moor Insights & Strategy. "Microsoft is recognizing what they're good at, and Nadella stretched the definition of 'productivity.' Microsoft is the productivity provider for billions, and focusing on that makes sense, more than trying to go head to head with Google, Apple and Amazon."
"Drilling into what Nadella actually means by ['productivity' and 'platforms'] shows that [Nadella] has a much more expansive vision of what both terms signify, but one that's rooted in the things Microsoft is good at," noted Dawson. "That's a subtler shift."