The future of Microsoft is being strategically decided right now as a new CEO, Satya Nadella, has taken the reins of the company. A new CEO usually means new direction and new ideas, but Nadella will be faced with a tough balancing act of preserving the legacies of his two predecessors, Bill Gates and Steve Ballmer, while carving a new path forward for himself.
The biggest philosophical dilemma facing the company now is whether to keep themselves spread as broadly across multiple disciplines as they currently are or whether to throw off some of their extra divisions and focus more strongly in core areas.
Right now Microsoft is involved in these primary services and products:
– Surface Tablet
– Windows Phone
Many in the business world have lost faith in Microsoft and believe the company’s image has lost some of its reputation. Everyone across the tech and business world has some kind of solution they think the new CEO should take. More importantly, though, are the voices and opinions of his main investors and highest staff members. And at least two of them are of the opinion that the Xbox brand is hogging too many resources and should be sold off.
This is the fourth time we’ve heard of such talk of axing the Xbox brand within recent months.
The first time was in November, when Bloomberg News reported that investors drove Microsoft shares to their highest price since mid-2000, after Nomura Holdings Inc. analyst Rick Sherlund said the sale of Bing and Xbox, along with other moves, could lift fiscal 2015 earnings by 40 percent.
The second time came from then-possible candidate to replace outgoing Balmer was Stephen Elop, the former Nokia CEO, who sold his company to Microsoft for @7.2 billion. People close to Elop said that he was emphasizing a focus on Microsoft Office and would possibly shut down or sell Bing and Xbox if they weren’t considered integral to the core company strategy. Of course, he didn’t end up becoming CEO but he still has a large role at Microsoft and his opinion is taken into account.
The third time was, soon after, when Microsoft co-founder Paul Allen said he was “intrigued and interested” by possible upcoming changes that might occur at Microsoft.
“The search business and even Xbox, which has been a very successful product, are detracting from that,” Allen’s investment partner Paul Ghaffari stated. “We would want them to focus on their best competencies. My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud.”
And now we finally have the fourth time, after Nadella had been appointed already. The Washington Post reported:
More important, ValueAct (on the board of Microsoft) has been a critic of Microsoft’s strategy and — like Ghaffari — wants the company to consider shedding some of its investments in consumer technology. ValueAct also reportedly wants the company to unbundle its offerings, such as Microsoft Office, so that they can be used on other platforms besides Windows…
…Nadella only hinted at wider changes in a company e-mail Tuesday. “Our industry does not respect tradition,” he wrote. “It only respects innovation.”
The big decision now remains as to whether Nadella listens to those pressuring him to sell off or shut down the Xbox brand or whether to keep Microsoft on its old track. While investors and fans of PS4 and Wii U are hoping it’s the former, Xbox One owners surely hope it’s the latter.