One big change under Satya Nadella’s leadership is Microsoft’s willingness to work with competitors.
In his now-famous July 2014 memo, CEO Satya Nadella pegged Microsoft as “the productivity and platform company for the mobile-first and cloud-first world.” After those buzzwords cured for five months, Nadella met with shareholders in December to elaborate on his vision for the company and to assess one of the busiest half-year stretches in its history.
“Only Microsoft,” Nadella told shareholders gathered at the Meydenbauer Center in Bellevue, “has the capability and the trusted partnerships to be able to enable every person in every walk of life, every business in every industry (and) every geography to fully realize the promise of this digital transformation.”
Those trusted partnerships aren’t just a footnote. To build the foremost productivity and platform company, Nadella’s embracing another “P”: pervasiveness. If Microsoft wants, say, the mobile version of Office 365 to be omnipresent, but only 2.7 percent of the market owns Windows phones, then it’s time to start making deals.
That’s exactly what Microsoft did in the month before the shareholder meeting. It made Office 365 free on iOS and Android phones. It partnered with Dropbox to make accessing and editing files possible on both ends. And it opened up aspects of development tools .NET and Visual Studio, allowing developers to get some functionality for free and develop applications for Android, iOS, Mac OS X, and Linux.
Though the partnerships were spearheaded by different departments, they all aimed to broaden Microsoft’s reach across other devices and services. In the past, everyone owned PCs, so Office and Windows were plenty pervasive, and vice-versa. But Microsoft is no longer in a position to shun competitors — it needs Apple and Linux and Google to help expand the reach of its key products.
Under Nadella’s predecessor, that approach would be blasphemous. “Classically, if you looked at Microsoft, there were two fence posts that Steve Ballmer was absolutely unwilling to waver on: Windows and Office,” says Wes Miller, an analyst with consulting firm Directions on Microsoft. “Products were regularly killed because they tried to compete with one or the other. What we’re seeing now is a company shifting from these two vertical pillars to a more horizontal splay.”
The Nadella administration is playing nicely with others, but the partnerships are no giveaway. Take Office 365 on iOS. Before November, iPhone and iPad owners could view Word, Excel, and PowerPoint files but had to pay to edit them. Now the files can be edited for free on iOS, but the capability to perform major format changes — and utilize Dropbox compatibility — will cost at least $7 a month for an Office 365 premium subscription.
Another important note is that Office 365 isn’t free for businesses. A similar system was put in place for Visual Studio, which is free only to individuals and small companies not making enterprise applications.
“This free version is about getting it in the hands of researchers and hobbyists, and using it for (training in academics),” says Rob Sanfilippo, Directions on Microsoft’s developer tools analyst. “But as soon as you get down to business with the product and you’re going to make money off of it, then you have to pay.”
Microsoft declined multiple interview requests for this story, but S. Somasegar, vice president of Microsoft’s developer division, pitched the freeing up of Visual Studio and .NET as a widespread method of democratizing the company’s core developer tools.
“With these releases, we are broadly opening up access to our industry-leading platform and tools to every developer building any application in today’s mobile-first, cloud-first world,” he wrote in a blog post on Microsoft’s website. “No matter if you are a startup, a student, a hobbyist, an open source developer or a commercial developer, and no matter the platform you are targeting or the app you are creating, Visual Studio, Visual Studio Online, .NET, and Azure will help you be successful.”
The Directions on Microsoft analysts say the company is incentivizing use of its platforms among consumers in the hopes that their use sparks enterprise adoption. If employees are using Office 365 on their mobile devices, their employers would benefit from using 365 in the workplace as well.
Ubiquitous use fits into Nadella’s cloud-centered ethos. If Microsoft is to be the productivity champion of the tech industry, then its products must work everywhere and on any device, and the cloud facilitates that.
“Our work to build the most complete cloud platform is underway,” he said in December. “The flexibility of deployment, a public-private hybrid cloud, the openness of the development frameworks … makes the Microsoft cloud the most complete cloud for real-world needs of enterprises and startups.”
Begin with the consumers and startups, graduate on to enterprise. It’s Microsoft’s strategy for pervasiveness, and the all-important “P”: profit.