Category Archives: Microsoft

Games, Gaming, M&A, Microsoft, Minecraft, Mojang

Microsoft and Mojang: where’s the strategic rationale?

Microsoft finally announced today its intention to acquire Mojang, the maker of the Minecraft game, after days of rumors. Throughout the last few days, I’ve been wondering why Microsoft would want to buy Mojang, and now that the news is official, and we have commentary from Microsoft, I’m none the wiser. This is a somewhat baffling acquisition, unless it’s been made purely as a financial investment, and there are much better uses for that money in building Microsoft’s business and ecosystem.

One-hit wonders abound, but Minecraft is different

There are lots of one-hit wonders in the mobile gaming market in particular – King, Zynga, Supercell and others have had one huge hit and have thereafter struggled mightily to repeat the success of that one game with subsequent releases. Mojang is also a one-hit wonder, but Minecraft is very different from FarmVille, Clash of Clans or Candy Crush Saga, in several ways:

  • It’s not just a mobile game, though it’s one of the highest-grossing in that category. It’s also available on PCs and consoles
  • It’s not a flash in the pan like some of those other games – Minecraft appears to have real longevity, having launched in 2009 and showing little sign of slowing down yet
  • It has a totally different monetization model from those other games, booking essentially all its revenue from a customer up front with a high-ticket one-off purchase, rather than in-app purchases or advertising
  • Its customer base likely skews significantly younger than most popular mobile games (and perhaps games in general), in that it is very popular among kids of all ages as well as adults
  • Minecraft is to a far greater extent than other games an ecosystem rather than just a game, with hundreds of books and digital material helping players to learn how to use it effectively.

So, this acquisition isn’t the same as buying one of those big mobile game makers – Microsoft clearly isn’t buying into a one-hit wonder and hoping to replicate its success. And it’s a good thing, too, since the founders are all moving on with the acquisition. But what is Microsoft after?

Bringing content in-house has rarely worked out well

There’s a long history of platform owners bringing certain content in-house, for a variety of reasons:

  • Generating exclusivity around the content for the owned platform, which is in fact what Microsoft did with the Halo franchise. That’s clearly not the intention here, however.
  • Bringing content to an owned platform the current owner won’t bring it to. For example, bringing Minecraft to Windows Phone. However, this is an enormously expensive way to achieve that objective, and Microsoft could easily have covered the costs of porting and maintaining Minecraft on Windows Phone for far less.
  • Wanting to capture more of the revenue opportunity associated with popular content, rather than splitting or even handing over all the revenue to the content owner.

None of these really make a great deal of sense in the context of the Mojang acquisition, except possibly the last one. But that’s hardly a strategic rationale – rather, a simple financial transaction. Perhaps Microsoft heard that Minecraft might be for sale, and didn’t want it to end up in the hands of major competitors who might withhold it from the PC or Xbox platforms. But that seems a little far-fetched, and none of the other reasons really make a lot of sense. Continue reading →

IFA, Microsoft, Nokia, Quick Thoughts, Smartphones

Quick thoughts: on Microsoft’s IFA announcements

Half the tech world is making announcements this week at the IFA trade show in Germany. A couple of other companies are making announcements elsewhere (Motorola today/tomorrow in Chicago, Apple next week in Cupertino). Samsung, Sony and other companies’ IFA announcements have received plenty of coverage, but Microsoft’s have flown somewhat under the radar, at least in part because there was no new flagship device. And yet I think there’s more significance in Microsoft’s IFA announcements than people realize. Here’s why.

Reconciling “devices and services”: a third way

There’s been significant discussion about how to reconcile Microsoft’s continued focus on both cross-platform services and making its own devices (this is a topic I’ve previously tackled here). The question has been: does Microsoft distinguish its services on the basis that they work just as well on any device, or its devices on the basis that its services work best on them? This week’s announcements suggest a third possibility: Microsoft will distinguish its own devices through commercial bundling of its services at attractive terms in a way others can’t match. For example, bundling in three months of Skype international calling with one of its new phones. We’ll see more of this sort of thing going forward both with Lumia smartphones and Surface tablets. Incorporating Nokia into Microsoft made this sort of thing much easier, and it will fully take advantage of that.

Smartphone positioning beyond low end remains challenging

Microsoft was smart to sit out this round of flagship phone announcements – Nokia’s flagships haven’t sold well anyway, but going head to head against new entrants from Samsung, Sony, Motorola, Apple and others seems particularly foolhardy. But Microsoft’s big challenge is that it’s been unable to establish a solid set of differentiators in the mid and high end, even as its “cheap, but still good” strategy makes big inroads at the low end. Its 500-series devices are its top sellers in almost all its major markets, and that’s useful for scale purposes, but it doesn’t help at the high end (and in fact may hurt if the Lumia brand gets a reputation for being a budget marque).

Branding strategy is confused but should be reconciled soon

The IFA announcements also highlight some brand confusion caused by the co-existence of the Nokia and Microsoft marques on the devices announced. The two smartphones are dubbed Nokia Lumia, while the accessories are the Nokia Wireless Charging Plate and the Microsoft Screen Sharing solution. The Nokia brand is supposed to go away soon except for low-end phones (since it belongs to the rump of the Nokia corporation), but that hasn’t happened yet. And yet Nokia needs to do more than just replace the Lumia brand – it ideally needs to reconcile its various hardware brands, at the very least Surface and Lumia.

Microsoft Screen Sharing has promise but not just yet

The Microsoft Screen Sharing device flew almost completely below the radar, but has in fact been heavily trailed for months. It’s a Chromecast equivalent, but at an Fire TV / Roku price point, and that’s its first big problem. But it’s symbolic in that it’s Microsoft’s first foray into the living room for non-gamers. The second big problem is that Microsoft has done very little to promote the Miracast support in its devices until this point, mostly because it hasn’t had a companion device to sell. But now that it does, the challenge will be educating existing device owners that their devices are compatible. Microsoft Screen Sharing may become a Google Cast / AirPlay equivalent brand which we’ll see show up in more places now, and I think Microsoft should absolutely play that up. But it should also cut that price significantly and/or enable carriers to bundle it for free with Lumia devices.

I’ll be publishing more on Windows Phone in the coming weeks as I have an in-depth report on the state of the platform coming shortly, though I may follow Microsoft’s lead in waiting until after the IFA / Apple hubbub dies down…

Amazon, Apple, Google, M&A, Microsoft, Techpinions

Techpinions post: potential acquisitions for Apple, Google and Microsoft

This week’s Techpinions column was prompted by a tweet from Alex Wilhelm of TechCrunch, who asked which companies Apple, Google and Microsoft should acquire next. I fired off a quick response, but decided that this would make an interesting post in its own right, and spent some more time drawing up a list. I also added Amazon to the list of potential acquirers just for fun. Here’s what I came up with:

  • Apple – Bose, Broadcom’s baseband business, Yelp
  • Google – Spotify, Jawbone/Fitbit/Withings, Pinterest
  • Microsoft – Here, Foursquare, Everpix/Picturelife
  • Amazon – Hulu, Pandora, Etsy/Shopify.

You can read the full post, which includes my rationale behind each of these choices, over on Techpinions.

Earnings, Microsoft, Microsoft Earnings, Q2 2014

Breaking down Microsoft’s business

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Note: this is a follow-up to my first post on Microsoft’s recent quarterly earnings, and is part of a series on major tech companies’ earnings for Q2 2014.

Microsoft filed its 10-K for the year ending June 2014 with the SEC on Thursday, and as usual there are lots of extra little bits of information lurking in the document to be teased apart and analyzed. The 10-Q filings are useful too, but the 10-K gives us a really good picture of where Microsoft’s revenues come from in quite some detail beyond its high-level segments. The first part of the analysis below covers this breakdown of Microsoft’s segments by line of business in additional detail, and below that you’ll find some thoughts on other items illuminated by the 10-K. Throughout the analysis, I’ll refer to Microsoft’s fiscal years 2013 (ending June 2013) and 2014 (ending June 2014) as FY 2013 and FY 2014 respectively.

Where does Microsoft’s revenue come from?

The chart below shows where Microsoft’s revenue comes from. You will notice that the individual percentages don’t necessarily add up due to some rounding. Where I have been able to find or derive exact numbers, I’ve left percentages accurate to one decimal place, but where there are estimates involved I’ve rounded to the nearest half-point to avoid giving a sense of false precision. Note that in much of what follows I’m providing estimates rather than reported figures. I’m very confident that my figures are broadly in line, since they’re all based on percentage growth rates and such found in Microsoft’s various filings. But they may be off by a percentage point or two here or there because they are estimates and not directly reported figures.

Microsoft revenue breakdownThe bolded numbers are Microsoft’s reported segments, so those are actual numbers. I’ve left out the Corporate and Other line because it doesn’t relate directly to actual products and services, but it makes up part of the total of 100%. I’ve left out entirely the new Phone Hardware unit (the former Nokia phone business) because Microsoft only reported results for a single partial quarter in its 10-K so there’s no real run rate to go on here. I’ll come back to that later, though. Continue reading →

Earnings, Microsoft, Microsoft Earnings, Q2 2014

Thoughts on Microsoft earnings for Q2 2014 – first take

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In contrast to other quarters, in the fourth quarter Microsoft doesn’t release its in-depth SEC filing immediately. Since that’s where many of the juiciest bits of data land, we have limited information to go on so far. But I wanted to do a quick first-take on Microsoft’s earnings based on what we do know. Once the 10-K is out I will likely do a follow-up post on the additional detail. This is part of a series on Q2 2014 earnings – you can see the full set here.

Margins – Microsoft’s past versus its present

I wanted to start out with a quick look at Microsoft’s margins. These days it only gives us gross margins at the detailed segment level, so we’ll have to be satisfied with those. The chart below shows gross margins for the new set of segments, including the former Nokia devices business:

Microsoft gross margins by segment

The data point for the former Nokia business is the brown circle hiding behind the last dark gray D&C C&G hardware circle, and it’s fitting in some ways that the margins for the two consumer hardware businesses should be so close to each other, at under 5%. By contrast, the two licensing businesses also have very similar gross margins, at over 90%. In the middle we have the nascent businesses: D&C Other and Commercial Other, which include all manner of products from enterprise cloud services to Bing. The contrast between hardware and licensing couldn’t be more stark: one makes enormous gross margins, and the other barely scrapes a profit. And yet that traditional licensing business is the past for Microsoft, while its other segments represent the future. It’s no wonder Nadella isn’t keen on first-party hardware for its own sake: it barely makes any money. But by the standards of the legacy Windows and Office businesses which make up the bulk of the licensing segments, Microsoft’s fastest-growing businesses are much less profitable too. They are becoming more profitable over time, with the help of scale, but they will never generate the same kind of margins as licensed software, which has almost zero incremental cost. Continue reading →

Big picture, Microsoft, Whole company analysis

Nadella’s manifesto

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Satya Nadella today wrote an email to Microsoft employees, which was simultaneously published on the Microsoft website. We’ve had glimpses and snippets of Nadella’s vision for Microsoft over the past several months, but this is the first time we’ve had the whole thing laid out in clear terms, and it marks something of a strategic break with the Ballmer era.

The most visible sign of this is the dismissal of “Devices and Services” as the descriptor of Microsoft’s strategy and mission. This was the vision Ballmer cooked up in his last couple of years at the company, as he sought to find a way forward for Microsoft in the face of serious threats to its two biggest businesses – productivity and operating systems. It did one thing well: recognized that operating systems would in future be monetized through hardware sales, and that productivity software would be monetized through services. But that was about as far as it went. Neither Ballmer nor anyone else at Microsoft ever really articulated how the two fit together, or how Microsoft would bridge the competing demands of providing the best services on any platform versus providing devices that offered truly differentiated experiences.

I do think the two could have been rationalized, as I’ve written elsewhere. Ultimately, a devices and services strategy properly executed would have meant creating really compelling services and then having Microsoft devices serve as the best possible instantiation of those services. But Microsoft was never really able to articulate that vision, and in the process created some really awkward questions for OEMs about why Microsoft was competing with its partners, first with the Surface and then with the Nokia devices acquisition. The fundamental problem, though, with Devices and Services as a strategy, was that it was never fleshed out, and thus was mostly a description of new business models for its two existing businesses, rather than a true vision for transforming Microsoft. It also never answered the question of what Microsoft was really about, or why it does what it does.

Satya Nadella’s new strategy replaces the Devices and Services pairing with another: Productivity and Platforms. On the surface, that could seem like a startlingly unoriginal vision for the Office and Windows company – more of the same. But drilling into what Nadella actually means by those two things shows that he has a much more expansive vision of what both terms signify, but one that’s rooted in the things Microsoft is good at. That’s a subtler shift, and we have yet to see the full implications of it. But it positions Microsoft as an enabler of its users, both enterprise and consumer, rather than a seller of devices and services, and that’s an important change, because it speaks to potential customers rather than merely to investors.

The other major implication of all this is a refocused Microsoft, one which sees “dual users” (a term that Microsoft uses to describe what others have called “prosumers”) as its target market. It’s in some ways an admission of defeat in the broader consumer market, and a statement that it’s going to focus on the narrower segment of people who see “getting things done” as a major reason to buy a personal device or use a consumer service. There certainly is a substantial segment of the population that views getting things done as important when selecting a device vendor or online service, but I suspect it’s a minority.

The other challenge is that, as Microsoft has been broadly absent from the smartphone and tablet markets for the last several years, people have found plenty of other ways to get things done without Microsoft’s help. Given its slow response to the demand for Office on the iPad, for example, it now faces much more of an uphill battle than it would have done had it embraced that opportunity before many alternatives moved in to fill the void. The same applies to many other domains where Microsoft has lost a step over the last few years.

Where Microsoft seems much better placed is in the broader platforms business, beyond traditional device-based operating systems, in what Nadella calls “Cloud OS” in his email. Microsoft was the only one of the big three consumer technology companies to split its developer conference keynote into two, and it did it to focus almost entirely on this opportunity in the second part. With Azure at the center, Microsoft is building a truly device- and platform-independent set of cloud services and infrastructure for developers, and doing well at it. But this revenue stream today is a small fraction of Microsoft’s overall revenues, at a couple of billion dollars a quarter across both its Enterprise and Cloud services businesses. Cloud Services itself – which also includes Enterprise Office 365 revenues – is smaller than Microsoft’s online advertising revenue, though growing much more quickly.

One upshot of all this is that we may be looking at a smaller Microsoft over time.  Last quarter, Microsoft’s revenues actually shrank year on year for the first time in a couple of years. If Microsoft yields much of the consumer market to competitors while focusing on a narrower segment, it could see revenue declines in some historical areas along with smaller growth in the new areas it’s successful in. But once it crosses the chasm from its historical highs to a new, refocused business, it should be set for better growth again. At least Nadella seems to be seeing Microsoft’s strengths and weaknesses clearly and taking steps to reshape the company in the right mold. There are also hints towards the end of the email about efficiency, streamlining and flattening in the organization, which could be read innocuously as having the same team operate more efficiently but could also be seen as an indication that some cuts may be coming.

Lastly, it’s interesting to see the word “privacy” pop up four times in the email, and particularly interesting in the context of the fact that it was never uttered during the keynotes at Build (security was mentioned, in the context of the enterprise). This was a recurring theme at Apple’s WWDC, and although Microsoft’s Scroogled campaigns arguably haven’t been that effective, there seems to be a sense at both Apple and Microsoft that privacy can be an effective competitive vector against Google if done right.

Nadella still hasn’t given us many specifics in terms of what this will all mean for new products and services at Microsoft. But he has now at least given us the framework for thinking about where Microsoft might go next, and how it sees its mission in the world. That’s going to give the company some valuable direction and focus following several years of seeming a bit lost. But as with any strategy, the devil is in the execution, and we’ve seen very little of how Nadella will deliver on that yet.

Apple, Apple TV, Developer events, Developers, fragmentation, Google, HealthKit, HomeKit, iOS, iOS 8, iWatch, Microsoft, OS X, Smart home, Smartwatches, Wearables, WWDC, WWDC 2014, Yosemite

Apple resurgent – thoughts on WWDC

Today’s WWDC keynote was a sign of a renewed swagger on the part of Apple, whose executives seemed to relish the deluge of new product announcements they unleashed on developers and on their customers. In the process Apple established or strengthened its competitive positioning against two major foes – Microsoft and Google – while opening itself up in unparalleled ways to developers. Today’s announcements may come to be seen in the same way as Steve Jobs’ original launch of Mac OS X, in that it lays the groundwork in several areas for years of future Apple products.

The demotion of Google continues

Two years ago at WWDC, Apple removed erstwhile close partner Google from the iPhone in two significant areas: as the backend provider for the Maps app, and in the form of the pre-installed YouTube app. But Google’s last major bastion on iOS is its position as the default search engine in Safari, and it’s much harder to remove there. In the sense of typing a query into a search box or address bar in a browser, hitting enter and being presented with a screen of blue links, Google is unrivaled, and Apple knows that. But it has slowly been inserting itself between the user and that search box over the last couple of years, and today’s keynote provided further evidence of Apple’s pre-empting of the Google search on both iOS and OS X devices.

Apple’s more subtle disruption of the user-Google relationship began with the launch of Siri, which began to address some users’ queries without an explicit search, and which uses Wikipedia, Wolfram Alpha and Bing, but not Google, as underlying search providers. And it has continued since then, as more third party services have been layered into Siri, pre-empting the Google search for movie listings, restaurant reservations and sports scores. Today’s keynote added Spotlight search to the list of places where users will now find answers to their queries without the classic search box experience, thus further inserting Apple between users and Google.

This is potentially significant for Google, for which the US continues to be easily its single biggest and most lucrative market, and for which mobile is increasingly important. To the extent that iPhone users, which make over 40% of US smartphone users, start using Apple and its tightly integrated third party services instead of Google, for search, that’s pretty bad news. That isn’t, of course, why Apple is taking these steps, but it’s an unpleasant side effect for Google. And a great way for Apple to participate in the search business without having to match Google in the page-of-blue-links business.

A device for every need, not one device for every need

Continue reading →

iPad, Microsoft, Surface, Tablets

Surface Pro 3, like every other device, is a compromise

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Microsoft today announced the Surface Pro 3, its latest Windows 8-based tablet, with the tagline “The tablet that can replace your laptop”. That sounds great in principle, and it’s a great slogan, but the reality is that the Surface Pro 3, like any other device – be it smartphone, tablet, laptop or whatever – is a compromise. Microsoft’s biggest mistake in marketing the Surface – and Windows 8 – is its repeated claims that there is no compromise, or that the Surface can somehow meet needs normally served by a combination of tablets and laptops or desktops.

Satya Nadella provided the setup for the launch with talk about “dreaming the impossible” and creating a device which (I’m paraphrasing based on my notes) “enables any individual to be able to read, create and write. Allows you to watch a movie and make a movie. To enjoy art and create art.” To me, that sounded just like the reality of the iPad. There was nothing unique in this vision, nothing impossible about it – it’s a reality we’ve had with us for the last four years. But the point is, Apple has never claimed that professional moviemakers should be using the iPad camera for shooting movies or iPad apps to edit them. Apple knows better than anyone that professionals want professional-grade equipment and software (including Apple’s own Mac Pro and Final Cut Pro products) to make movies. And the same goes for many other professions. The iPad offers great benefits – smaller, lighter, longer battery life, more personal and interactive – over laptops and desktops. But the tradeoff is that it lacks the power, the large screen, the peripherals and so on of a larger device. Apple will happily sell you a device from five different major product lines: the iPhone, the iPad, the MacBook Air, the MacBook Pro and the Mac Pro – because it knows no single device meets all needs, and doesn’t try to convince consumers that it can.

The problem for Microsoft is that it only makes one device, the Surface, itself. And so its mission from the start has been to turn that device into the holy grail – the single device that can meet all your needs, replacing both other tablets and laptops. It has good strategic reasons for wanting to do this, which I’ve covered elsewhere. But the result is that it has to constantly claim that its single device can replace two devices from any other vendor, notably the MacBook Air and iPad shown repeatedly at today’s launch event. But it fails to acknowledge the compromises such an approach entails. Though Panos Panay repeatedly compared the Surface Pro 3 to the 13″ MacBook Air, he never compared it to the iPad Air or even the 11″ MacBook Air, which has a much more comparable size. Here’s why:

SP3 to iPad and MBA comparison

It’s because Microsoft recognizes that this isn’t really a tablet that can replace your laptop: it’s a laptop that happens to have a detachable keyboard. It’s priced like a premium laptop, and it weighs the same as a premium laptop.Start comparing it to the best tablet on the market, though, and it starts to look much less attractive: the iPad Air and iPad Mini cost substantially less (even if you add a good third party keyboard for $100), and weigh much less. They’re much easier to hold in the hand and they come with a far greater number of tablet-optimized apps.

The biggest change in Microsoft’s Surface strategy over the last several years has been the locus of the compromise it’s still inevitably making. The first Surfaces were intended to be good tablets first and good laptops second (and ended up being neither). But with the Surface Pro 3, Microsoft has created a competitive laptop first, and a compromised tablet second. But it’s still pretending that there’s no compromise, and that is why the Surface line will continue to perform poorly. At some point, Microsoft has to stop pretending that a single device can meet all needs and start optimizing for different use cases with different devices, just like every other manufacturer. If it isn’t willing to do that, it should probably just cede the market to its OEMs.

Earnings, Microsoft, Microsoft Earnings, Q1 2014

Thoughts on Microsoft’s earnings for Q1 2014

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The next company in my series of “thoughts on earnings” pieces (see Google here, Apple here and Facebook here) is Microsoft. I’ll be doing something on Amazon next, most likely. Microsoft is a complicated business, with many parts to it, so I’ll focus mostly on the things I think most people overlook, because they’re rather buried in the earnings release or even the 10-Q. This involves making some estimates, calculations and assumptions, as well as interpolation, so please understand that many of the numbers are my best guesses rather than those reported by Microsoft (I try to be clear on which is which in each case).

Long story short: for all Microsoft’s talk about Mobile and Cloud, those two categories likely generate under 10% of Microsoft’s revenue today – something I’ll return to in the conclusion at the end of this post.

Windows Phone

First, Windows Phone. I’ve written at length before about the methodology used here, but we got another couple of quarters’ worth of solid data so I’m providing some quick numbers off the back of that.

Microsoft Windows Phone revenueThe key thing to note here is that, other than in the fourth quarter, this number stays a little under $400 million a quarter. And it’s worth reminding everyone that this number is not just Windows Phone licensing itself but also the rest of Microsoft’s mobile licensing activity (think patents licensed to Android OEMs). As such, as Microsoft executes on its new policy of not charging OEMs for Windows for devices under 9 inches, there’s only a very small amount of revenue at risk – likely $100-200 million per quarter. And of course Nokia was paying about 90% of that anyway, so it would have become an internal transfer starting today. Continue reading →

Microsoft, Satya Nadella

What is Microsoft uniquely good at?

In Satya Nadella’s email to employees one section in particular stood out to me:

As we look forward, we must zero in on what Microsoft can uniquely contribute to the world. The opportunity ahead will require us to reimagine a lot of what we have done in the past for a mobile and cloud-first world, and do new things.
We are the only ones who can harness the power of software and deliver it through devices and services that truly empower every individual and every organization. We are the only company with history and continued focus in building platforms and ecosystems that create broad opportunity.

Though there are few specifics in the email, but as a general principle the first part of this is pretty good: Microsoft needs to focus on what it “can uniquely contribute to the world.” All companies need to know what it is that they’re uniquely good at, shore that capability up to keep it uniquely good, and put it at the center of every product and service they offer to consumers.

Here are some examples:

  • Google – uniquely good at ingesting and analyzing data about the world and the people in it in such a way as to serve up content and advertising that is very effectively targeted at end users.
  • Apple – uniquely good at tightly integrated software, hardware and services that make computing experiences natural, intuitive and enjoyable.
  • Amazon – uniquely good at developing logistics and information technology to maximize efficiency in the delivery of physical goods and IT infrastructure.

The problem with Nadella’s summary of Microsoft’s core strength is that it’s backward-looking: it talks explicitly of history rather than capabilities, and this is a core problem Microsoft faces as Nadella takes over. I would argue that Microsoft is not uniquely good at anything at this point: its main competitive advantage at this point is scale in key areas such as operating systems and productivity software, which are based on certain advantages it enjoyed in the past. But this is a bit like Facebook saying it’s uniquely positioned because it’s the world’s largest social network, or that it’s the only company with history and continued focus in building successful social networks. The core capability isn’t the achievements of the past but what enabled the company to achieve those things. Unless they can continue to do those things, they will lose the one advantage they have, which is scale.

Microsoft has no particular advantage in software at this point, and suffers from a major disadvantage as well, which is that its two major existing software products – Windows and Office – are so widely used that it is almost impossible to evolve them without alienating some users and over-serving many others. Google, on the other hand, truly does seem capable of building “platforms and ecosystems that create broad opportunity” – just look at Android.

If Microsoft is to be successful long-term, it has to get past this historical thinking and get at the core of what it can really be uniquely good at as a company. There’s an enormous and talented team of people at Microsoft, but no-one has yet articulated accurately why they should be successful in any of the spaces that really matter today and in future.

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Other recent posts on Microsoft:

Google and Microsoft go in opposite directions

Calculating Microsoft’s  Windows Phone revenue

Why you can’t split consumer and enterprise at Microsoft