Microsoft is not defeated and still has hope of making a comeback

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Recently, Microsoft's 7,800 layoffs and restructuring of its mobile phone division have been a hot topic. Foreign media even claimed that Microsoft has already bowed out in the mobile phone "Game of Thrones" and that the acquisition of Nokia has severely damaged its vitality, making it difficult for the once giant to make a comeback. However, we found that industry investors did not look down on Microsoft because of this, and most people reserved their comments on this incident. In a previous report by CCTV reporters in Washington, many industry insiders also expressed their understanding of Microsoft's transformation. At the same time, Microsoft's stock price has not fluctuated significantly recently, but has shown a slight upward trend. Does this mean that the industry still has hope for Microsoft, or that Microsoft still has a chance to make a comeback in the future?

Clear obstacles, release negative pressure, and reorganize power with Nadella at the center

The debts planted in the past will have to be repaid sooner or later, and the acquisition of Nokia mobile phones is one of them. There is no doubt that Nokia's mobile phone business has become Microsoft's biggest negative pressure, which is also a problem left over from the Ballmer era. So far, the global market share of WP mobile phones has never exceeded double digits. With Microsoft's tacit acceptance of the strategic mistake of acquiring Nokia's mobile phone business, the dream of WP system to have a third of the mobile phone market has also become a bubble. Now that the iPhone is the only one in the mobile phone market, Android is also under pressure, so Microsoft's refusal to continue to play the role of "chaser" is the only choice on this issue at the moment.

At the same time, we have seen that since Nadella took office, Microsoft has changed its previous rigid and rigid appearance and proved its determination to transform to the industry with a more open attitude. More importantly, the continued growth of businesses such as Azure Cloud and Office has given investors a shot in the arm. In this context, Nokia's mobile phone business, which is deeply mired in the quagmire, naturally became the biggest stumbling block for Nadella to lead the transformation. In mid-June, Microsoft's internal email announced the change of senior management. Elop, the former CEO of Nokia and executive vice president of Microsoft, will leave, and two other senior executives in important positions will also leave. Elop, who is jokingly called a "Trojan Horse" by Nokia fans, may be one of the most controversial figures in IT history. His departure may be the result of internal game in Microsoft, or it may be a "retirement after success" to fulfill the agreement between him, Ballmer and Nadella. In any case, the change was unanimously regarded by foreign media as an action taken by Nadella to reorganize the power center of Microsoft and to close the Nokia mobile phone department in the near future.

It is worth mentioning that in the list of senior executives after the reorganization, Terry Myerson, who had made great contributions to Nadella before, is prominent. Terry Myerson, the former head of the operating system department, took over the hardware department left by Elop. Now he is the executive vice president leading the Windows and device department and has become an important member of Nadella's direct managers. Myerson gives us the impression of an executive with outstanding eloquence. His humorous, smooth rhetoric and calm performance at many Microsoft press conferences have made the outside world appreciate his extraordinary talent. Myerson's golden partner Qiao Beifeng (head of the operating system) and Alex Kipman (HoloLens designer) have also been reused. The rise of the three little strong men also means the replacement of old and new core members of Microsoft. At the same time, Nadella's "other sword" will continue to be played by Guthrie Scott (the weirdo in the red T-shirt at the press conference), who is responsible for cloud computing. In addition, the positions of Lu Qi, Shen Xiangyang, COO Kevin Turner and other old people remain unchanged.

By promoting capable people, restructuring senior management and shutting down Nokia's mobile phone business, Nadella has almost completely removed the current obstacles, which also gives him more initiative in his long transformation journey and the next layout.

With constant challenges in the terminal market, how does Microsoft play the "Game of Thrones"?

In a recent media interview, Nadella publicly admitted that Microsoft missed the mobile era. At the same time, he tried to dispel the outside world's concerns about the negative impact caused by Microsoft's 7,800 layoffs, and hinted that Microsoft would not withdraw from the smartphone market. However, the fact is that Microsoft's influence on the mobile side is still minimal, and its previous layoffs and reorganizations are more like strategic defense. So how can Microsoft continue to play the mobile game? If it can't continue, how can it explain to investors? This will be the biggest problem Nadella will face in the future.

Nadella seems to have a plan. On the one hand, he tried to improve Microsoft's position in the mobile field through the next generation operating system Windows 10. On the other hand, he deliberately downplayed the importance of mobile terminals and emphasized the importance of the operating system platform, pointing out that Microsoft's core strategy is to attract developers to its platform, and mobile phones are just one of the platform carriers used by 1 billion Windows consumers. This logic seems good, putting the importance of the platform before the terminal, so that people no longer care about the terminal, but the premise to support this logic is that the platform must have a strong monopoly, just like the influence of Windows in the PC era.

However, in the consumer terminal market, Microsoft has encountered challenges from Apple, even in the PC field where it has an advantage. According to the latest IDC report, against the backdrop of a decline in shipments of PC manufacturers around the world, Apple's Mac shipments have bucked the trend and increased by 16.1% year-on-year to 5.136 million units. If Microsoft has a firm grip on productivity and the enterprise market, Mac has opened up a gap in the consumer field.

Facing such an offensive, Nadella's strategy is to avoid a head-on collision, leverage Microsoft's powerful software genes and technology accumulation, and use an open platform strategy to attract more developers. Nadella believes that as long as developers can return to the Windows platform, the applications they develop on any terminal will be extended to other terminals due to Continuum's conversion adaptation function, and the same is true for the mobile phone strategy. Nadella has a lot to say about this gameplay, but whether it suits the tastes of developers and whether it can implement an effective "curve rescue" for the consumer market remains to be verified by time.

Where is Microsoft's hope for the future? Where is the opportunity to turn defeat into victory?

In any case, it is an indisputable fact that Microsoft has been forced to switch to strategic defense before the Windows 10 platform universal application strategy makes effective progress. However, Microsoft will not defend forever, it must fight back, but where is the opportunity?

Looking back at the industry landscape, the positions of the three giants have not changed, but Apple's size has exceeded the sum of Microsoft and Google, and Apple is in a period of aggressive expansion. The erosion of iPhone on Android and Mac on PC are extremely unfavorable to them. Judging from Microsoft's current attitude, it is possible that it will choose to cooperate with Google in the future, or even strengthen its ties with the open source community. In an interview with ZDNet, Nadella also expressed his welcome to cooperate with Google as long as the other party is willing. The former enemies are now friends, with only one common goal - to defend against Apple.

In addition, the outside world is very concerned about Microsoft HoloLens holographic glasses. In the eyes of many industry insiders, HoloLens is a product that can change the focus of the future terminal world, but the product is not yet mature, including its technical form. HoloLens can enter a very wide range of fields, including enterprise-level and consumer-level applications, education, medical care, scientific research, games, etc. Microsoft has also been cautious in the development of this product. The AR technology carried by HoloLens (Microsoft calls it mixed reality) is different from the VR games and film and television applications of Oculus Rift. AR has a broader terminal attribute. Once the form is mature, the AR technology of 3D holographic projection + gesture and voice control can completely replace the existing physical screen + touch, including the traditional mouse and key combination. This is why AR has the ability to change the focus of the future terminal world. Microsoft will not be unaware of this, and it can even be vaguely felt that Microsoft has made a big bet on HoloLens.

summary

Microsoft's current decline in mobile phones and the erosion of consumer PCs by Macs have determined that it is in a difficult defensive period, but this does not mean that Microsoft has failed in the war between giants. As a super technology company that has been sticking to PCs for 30 years but can still make a difference in future AR technology, its historical process is far from over.

Terminals and platforms (operating systems) have dominated the industry for 50 years, and no one can predict the direction of the industry too early. The universal platform Windows 10 and the 3D holographic glasses HoloLens have brought variables to the future landscape. Microsoft still has a chance to make a comeback. Whether it can seize the next wave of technological innovation depends on its future performance. At least, Microsoft can't make mistakes again.