Microsoft's Huge Year of Change – 2014 Microsoft Review

CIO | Dec 19, 2014

With only the third CEO in the company's history it was clear Microsoft did not want to remain complacent and on the course charted by Steve Ballmer.

Microsoft's huge year of change – 2014 Microsoft Review

2014 was a huge year of change for Microsoft. With only the third CEO in the company's history it was clear Microsoft did not want to remain complacent and on the course charted by Steve Ballmer. We'll take a closer look at the tech giant in our 2014 Microsoft Review.

The biggest change at the company was replacing Steve Ballmer with Satya Nadella. Ballmer continued much of the Gates era strategy while Nadella was clear that he wanted to shake things up. Nadella hit the ground running and made the CEO role his own. One significant change was moving from what Ballmer called a devices and services company to a productivity and platform company.

Nadella would acknowledge the first versions of Microsoft's Surface tablet didn't hit a sweet spot, but after a few iterations the Surface Pro 3 debuted to relatively positive reviews. It's a prime example of Microsoft being a hardware provider, something new for the business, which has its pedigree in consumer and business software.

The Nokia deal closed this year, which Nadella inherited from Steve Ballmer. One of the results? A big round of layoffs. About 25-thousand were added from Nokia and half of those workers were laid off in addition to some Microsoft employees totaling 18,000 workers. It was the largest percentage layoff in Microsoft history, but Wall Street liked it. Moreover Wall Street generally likes Satya Nadella and the direction of the company. During Ballmer's tenure the company's stock price hovered around 20 or 30 dollars per share, but now with Nadella at the helm, the price per share is around 45 dollars and climbing.

One of the purposes of the Nokia acquisition was to help Windows Phone, Microsoft's struggling mobile platform. While the platform gets generally good reviews it's fighting an uphill battle to grow its user base with Android and iOS remaining key strongholds. Much of the problems with the mobile OS is echoed in other sections of Microsoft's business –they were just too late and now it's hard for them to catch up.

Another section of the business that might have come too late is its online productivity software and office apps for iPad. As desktop users moved to embrace smartphones and tablets, they found Office wasn't there for them and they needed to make do with something else. So while Steve Ballmer was busy being stubborn users adopted Google Docs, which offers much of the similar functionality for free.

While there were rumors that the company was going to spin off the Xbox division, Nadella quelled them saying that the console and gaming business was important to Microsoft. The company hit a home run with the Xbox One, which is on track to outpace sales of Sony's Playstation 4. While the Xbox One is a hard core gaming device it incorporates many features that make it appeal widely such as streaming services, etc. It became clear that the Xbox One is Microsoft's living room PC that never was.

Looking ahead Windows 10 is on the horizon and Microsoft has pledged that the new OS will delight IT executives. Adoption of Windows 8 by enterprises has been very slow, with the OS installed on 2 percent of business machines running a Microsoft OS. Microsoft has said that Windows 10 will be a single OS for a variety of devices, not only PCS and tablets, but also the Xbox console and smartphones. It will have a single app store making life easier for developers. The company has done a lot to make Windows 10 feel familiar to users and analysts say that Microsoft needs to get Windows 10 right after what a failure Windows 8 has been. Windows 10 will be out in 2015.

And that's the 2014 Microsoft Review. Thanks for watching and be sure to check out our other year end reports.

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IDG News Service