Evaluating Strategic Options at Microsoft

Microsoft Strategy

Analyzing Microsoft's Current and Future Strategic Vision

Like many successful technology companies, Microsoft over time had become complacent and too willing to believe their own technologies could continually fuel new organic revenue growth. Analysts have often pointed out that Microsoft's transition from a provider of personal productivity applications to delivering enterprise-class solutions to many of the Fortune 500 failed initially to create a scalable, stable platform for continual growth (Cusumano, 16). Today Microsoft has a new CEO who often speaks of the company's mobile first, cloud first strategy. CEO Satya Nadella's agenda mirrors the foundational elements of the five forces that shape industry competition as conceptualized by Michael Porter's models and analysis (Porter, et.al.). Microsoft needed to completely revamp their enterprise strategy, rethink their mission and vision statements, and also sharpen their unique value proposition to concentrate more fully on the emergent group of enterprise customers they had only been somewhat successful with in the past. All of these factors led to the decision to pursue an aggressive mobile first, cloud first strategy predicated on their strong ties to Nokia (Choi, 296). Despite an intensive level of planning and orchestration, Microsoft's legacy silos, systems and processes have slowed their progress, just as it has for decades (Anderson, Wood, 30). Clearly the company needs to embrace a more services-based model, monetizing the exceptional depth of expertise in the company. Microsoft has been on a long journey of transition into a services-based business, with one of the most valuable lessons learned being the defining of value propositions and the metrics to measure them must be aligned with customers first (Baker, 37).

Assessing Microsoft's Enterprise Strategy

Microsoft's transformation from a provider of personal productivity software and devices and a very limited series of enterprise applications to a broad, deep portfolio of enterprise operating systems (Windows NT, XP) and applications has taken decades to complete (Cusumano, 18). This has mainly been due to the fact that the Microsoft culture is designed to promote competition that delivers excellent software, with the downside that cooperation and large-scale collaboration on projects suffer (Laverty, 44). Microsoft's previous mission, vision and values statements reflected a strong focus on enabling greater individual performance, productivity and personal growth (Microsoft Investor Relations, 2014). This emanated out of the fact that the Microsoft Office group is by far the most politically powerful throughout the entire company (Cusumano, et.al.) as this division generates nearly 30% of all Microsoft profits on a consistent basis (Microsoft Investor Relations, 2014). Only through a continual emphasis on building out an enterprise services strategy did the decisions favoring the development of Microsoft Dynamics, the company's best-selling Enterprise Resource Planning (ERP) system take hold and lead to an entirely new enterprise business (Microsoft Investor Relations, 2014).

Microsoft's enterprise strategy has gone through literally seven to eight product generations of development until it was at parity or stronger in depth of features and value relative to competitors who were long entrenched in large-scale IT deployments across the Fortune 500 however. By the time Microsoft was able to gain a foothold in the enterprise arena, an entirely new series of dynamics began to take hold in the global software industry, making enterprise-wide mobility applications the new normal (Microsoft Investor Relations, 2014). With the naming of a new CEO Satya Nadella, Microsoft chose to define their mission statement as follows: Microsoft's new corporate mission for 2013 and beyond is "to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most. (Microsoft Investor Relations, 2014).

This mobile first, cloud first strategy continues to completely redefine the value statement of Microsoft from an objective, scope and advantage standpoint. First and most significant is the shift of the company's mission and values away from just individual or personal productivity towards a more unified, strategic view of unifying devise through operating system software and applications to deliver the greatest value possible (Microsoft Investor Relations, 2014).This is still consistent with the personal productivity values listed in previous mission and value statements, yet the objective of this statement is to unify the diverse devices and information needs in a single, unified architecture. The scope of the Microsoft mission statement has also significantly changed to encompass a family of devices and services for individuals and businesses to use in doing their daily work (Microsoft Investor Relations, 2014). The scope dimension also seeks to encompass an entirely new direction in creating software as well, concentrating on the creation of a mobile platform operating system that would have the same ubiquity as Microsoft Windows did on the PC platform. This shift in scope to a more mobile first, cloud first strategy is inordinately more difficult to achieve however as there is a more diverse base of competing operating systems, devices and platforms available (Cusumano, 17). The advantage dimension of the mission and value statements of Microsoft seek to accelerate the transition of the company from primarily stand-alone personal productivity operating systems to ones that can unify diverse mobile devices and deliver exponentially greater value as a result (Microsoft Investor Relations, 2014). Underscoring the shifts across these three dimensions is the recognition on the part of Microsoft that operating systems are not the center of the computing universe, customers and their changing needs are (Laverty, 44).

Analyzing Microsoft's Strategic Objective

Microsoft's strategic objectives continue to concentrate on maximizing shareholder value and delivering innovative new applications and services (Microsoft Investor Relations, 2014). What has shifted is the vision and mission of providing a contributing series of technologies that allow others to connect with and share information with one another on mobile devices. Most significant, Microsoft sees itself eventually being a provider of devices as well, looking to capitalize on the extensive patent library the company owns today (Microsoft Investor Relations, 2014).

Why Microsoft's Scope Is A Critical Factor In Its Success