Redmond Review

Satya Nadella's To-Do List: A 6-Point Plan

Microsoft needs fixing. Here's a list of the first things the new CEO should consider taking on.

• By Andrew J. Brust
• 02/11/2014

Microsoft finally has a new CEO. Satya Nadella, who has for the last three years headed up the company's Server and Tools Business (STB) and its successor, the Enterprise and Cloud (E&C) division, is Microsoft's new leader. Considering that Visual Studio, SQL Server, Windows Azure and other developer-relevant products and services have been under Nadella's purview, the new CEO is probably the best one possible to look after developer interests. And with Scott Guthrie named as Nadella's E&C successor (at least on an interim basis), Microsoft is giving developers the best news they've had for a very long time.

But there's not much time for celebration. Microsoft's got a number of challenges before it, many of them urgent. While detailing all of these challenges isn't feasible in a single column, I'd like to go over a few I think are very important. Far be it from me to tell Nadella how to do his job, but maybe I can make some suggestions about priorities. Here goes.

A Six-Point Plan

1. Patch things up with developers. Let's be clear: killing Silverlight was hugely damaging to relations between developers and Microsoft. Today, Windows 8 development makes .NET developers feel less at-home than they once did, and side loading line-of-business apps is hard and expensive. Not only does Microsoft need to get its developer stack solidified, it needs more transparency around .NET, including an explicit roadmap going out several years. Killing Silverlight and deemphasizing WPF made developers very insecure. Microsoft need to take extraordinary confidence-building measures to make them feel safe and loyal again.

2. Patch things up with employees, too. The stack ranking system at Microsoft drove a lot of good people away. Worse yet, the politics it created burdened employees who stayed – it was essentially a tax. When a large percentage of employee time goes toward thinking through politics, and when product decisions are driven by politics, morale and efficiency sink, and innovation becomes very hard to come by. Microsoft abolished its stack ranking system, and that's good. But it can't leave a vacuum. Microsoft needs to replace the stack ranking system with something more fair, but also clear, rigorous, and very transparent.

3. Leverage Microsoft Research (MSR). Microsoft has one of the largest R&D budgets of any large corporation, but MSR seems cloistered and detached, very under-promoted and not as prolific in commercialized products as it could be. MSR, which could be a huge engine of innovation and thought leadership for Microsoft, seems vastly underutilized. Maybe I'm wrong, but if I am, that's emblematic of another problem: awareness of MSR's work is very low. What to do? MSR's annual expo, TechFest, should be public and MSR should have a few dedicated public relations resources. But most of all, integration between MSR and the various product groups should be formalized, extensive, and part of the core of the company's mission.

4. End the Corp-Field divide. From the outsider's point of view, Microsoft might as well be two different companies. On the one hand is the corporate organization: the executives and product teams in Redmond; on the other, the "field": this includes partner, sales and evangelism resources around the world. The two sides of the company view each other with a lack of familiarity at best, and outright disdain at worst. The result is that the Redmond campus can be a bubble, devoid of input from customers, because the field's market intelligence isn't tapped, and the folks in the field lack a detailed understanding of platform features, strategy and roadmap. Microsoft can't afford this segregation.

5. Be a global company. A number of Microsoft's products, when new, come out for the U.S. market exclusively. Canada may or may not come next, followed, perhaps, by countries in Europe, then elsewhere. Some products never make it outside of North America; and those that do can take a long time. Even Bing, in its full form, to this day hasn't rolled out worldwide; instead, many countries have essentially a Bing-branded version of the old Live Search. Many Microsoft product teams justify this approach by saying they have limited resources and would rather get a U.S. version out early, then hold all releases until a product is localized for several markets. That answer doesn't work anymore. Microsoft should roll out new products worldwide as much as possible. And where it can't, it should roll out first to non-U.S. markets, as well as the U.S., in a round-robin fashion. The mobile- and cloud-based world is just that: the whole world. Microsoft risks losing relevancy if it can't or won't adapt.

6. And another thing, or five. There are so many more things to discuss: making Lync and Skype work better -- together and on their own -- and leveraging Skype to make a carrier-less phone. Investing more in the SQL Server core relational engine, and SQL Server Integration Services, too. Creating a real developer story for Xbox One. Moving faster on Big Data, machine learning, and streaming data processing, especially on Windows Azure. Simplifying the dizzying array of Office 365 subscription plans. Stabilizing the features and brands of Xbox Music and Xbox Video, not to mention those of Outlook.com and "OneDrive," the sync for which doesn't always work. And while revenue from Enterprise Editions and other "up-level SKUs" is great, Standard Editions need to be viable, or Microsoft will lose emerging developers and ISVs.

Tough Love

Forgive me Mr. Nadella, for I know I've given you a laundry list of stuff. But a lot of problems have accumulated over the years and there's no time to waste in fixing them. You won't get the devices and services market share you crave unless some of the root cause problems I've discussed are addressed head-on.

On the other hand, if you can make real headway on tackling these daunting issues, you may right the Redmond ship, and earn the respect of employees, partners, shareholders and even Microsoft's critics. I know you want to accomplish things; not merely try to. While not so humble of me, I hope this list can help.