The three most important things in Satya Nadella's mega-memo

Satya Nadella

MIcrosoft CEO Satya Nadella

Credit: Johannes Marliem via Flickr

One thing we know about Microsoft CEO Satya Nadella -- he's a fan of long memos.

Today's memo to employees, posted online, rambles through a tweak to Microsoft's mission, emphasizes a commitment to Xbox, and suggests changes afoot to the company's engineering operations.

The biggest takeaway is that Nadella has high hopes for shedding Microsoft's image as a slow-moving, bureaucratic, old-school business culture. "Nothing is off the table in how we think about shifting our culture," he wrote.

While not too long ago such big change would have seemed like a nearly impossible proposition, under Nadella's short tenure, there's at least a glimmer of hope. There's already a sense in the industry of a reinvigorated Microsoft ready to step up.

Here are the most important points from Nadella's memo:

Microsoft is happy to blur the lines between consumer and enterprise. Nadella expanded on his mobile-first, cloud-first mantra to include the concept that he calls "dual use," and that the rest of the industry thinks of as consumerization.

"We will think of every user as a potential 'dual user' -- people who will use technology for their work or school and also deeply use it in their personal digital life," he wrote.

He focused primarily on apps, more so than devices, that will automatically "partition data between work and life."

Given that Microsoft continues to be weak in devices -- its phones and tablets have scant market share -- he also reiterated that these apps will work across the many devices that people use. Under Nadella's tenure, Microsoft has begun offering its software on more non-Windows hardware, most notably releasing a solid touch-first version of Office for iPad.

Changes are coming to the way work gets done at Microsoft. "We will modernize our engineering processes to be customer-obsessed, data-driven, speed-oriented and quality-focused," Nadella wrote.

Given that Microsoft is notoriously bureaucratic, this can only be a good thing.

Particularly interesting is Nadella's decision to implement more data-driven processes. Going forward, all engineering groups will have "data and applied science resources" that will let engineers focus on measurable outcomes for products and offer them predictive analysis of market trends.

He also wrote about simplifying operations, flattening organizations, and developing leaner business processes.

None of those thoughts came with specifics, although Nadella said he'd share more over the month. Rumors or at least expectations of layoffs have been looming since Nadella took over, and these open-ended suggestions won't make Microsoft workers very comfortable.

A renewed focus on productivity first. "At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world," he wrote. "We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more."

This slightly expanded mission marks the end of the "devices and services" rhetoric that former CEO Steve Ballmer laid out, although that vision is still important -- a company can't be mobile-first without embracing the move from traditional PCs to more kinds of mobile devices (even if they're not Microsoft devices), and services are delivered through the cloud.

"While the devices and services description was helpful in starting our transformation, we now need to hone in on our unique strategy," Nadella wrote.

It's also interesting that productivity seems to emphasize Office over Windows. Those are Microsoft's two biggest businesses, but Windows has struggled to grow revenue for the last few years, and no longer dominates client computing as it did before the rise of mobile devices and tablets. Office, however, is still the king of productivity tools.

Nadella didn't accomplish what he set out to with this memo, which he said was to "synthesize the strategic direction and massive opportunity" that he's been discussing so far.

There wasn't much synthesizing in this memo that touched on so many topics. However, this kind of rallying call from Nadella, heavy on motivating language -- there's much talk of passion, ambition, boldness -- may be contributing to at least a perceived shift in enthusiasm around Microsoft. There is a sense of possibility around Microsoft that hasn't been there since the days when Bill Gates was more involved with the company. 

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