In a 3,000 + worded email to employees, Nadella said
Microsoft needs to "rediscover our soul," and suggested his mission
is different than the "devices and services" mantra developed by his
predecessor, Steve Ballmer.
He said Microsoft at its core "is the productivity and
platform company for the mobile-first and cloud-first world."
The occasion for the letter is the kick-off of Microsoft's
fiscal 2015, ahead of the final results for FY 2014 which are due to be
reported on July 22 in the USA and July 23rd in Australia.
In an interview, Mr. Nadella said, "My message to
employees is clear: let's be bold and ambitious and really get behind the core
that is unique to us."
In the memo Nadella said Microsoft would help people be more
productive in work and in life with tools like the Cortana digital assistant
for Windows Phone and other technology that would automate and anticipate
people's tasks, and he said Microsoft would use its position of strength in
corporate server farms to help businesses run more efficiently.
He also made it clear the company would change and slim
down, and employees needed to get on board or get out. People inside of
Microsoft for weeks have been bracing for job cuts or other major strategy
changes, and employees have been asked to draw up strategy plans for Mr.
Nadella, according to Microsoft workers and others familiar with the company.
Plans to spin out the Xbox division have been scrapped, but
in his email he says that this isn't happening, citing specifically the
potential for Xbox on mobile as one of the main reasons why.
"The single biggest digital life category, measured in both
time and money spent, in a mobile-first world is gaming," he says in the
letter. "We are fortunate to have Xbox in our family to go after this
opportunity with unique and bold innovation."
"Bottom line, we will continue to innovate and grow our
fan base with Xbox while also creating additive business value for
Microsoft," Mr. Nadella wrote.
Nadella closes his email with more detail on the changes required, which include reorganization and streamlining. He evokes the image of a leaner, more agile Microsoft, which can anticipate and innovate more quickly.
That'll mean a flatter organization, he says in the letter, and already he's asked the Microsoft leadership team to submit its ideas on how they can "simplify their operations and how they work." The goal of the change is to make sure Microsoft focuses on and delivers to its users and customers what Nadella calls its "core."
It appears that Nadella wants to paint his reign at
Microsoft as a time of change, and thus far we've already seen him begin to
make that happen.
This year sounds like it could provide even more of a
shake-up at one of the computing industry's oldest and most influential
institutions - if the new CEO sticks to his plans.