Microsoft China's leadership change cannot solve the lack of localization

On the first day of the second half of 2016, Microsoft China announced a change of leadership.

On July 1, Microsoft announced that Alain Crozier, former president of Microsoft France, will replace Ralph Haupter as chairman and CEO of Microsoft Greater China. He will be the second "foreign" boss of Microsoft China.

In addition to the task of making Microsoft China more "localized", the persistent antitrust investigation in China will also put Microsoft led by Krejciech Snyder to a test.

Microsoft China will welcome its second foreign top leader.

Microsoft said that after taking office, Correia will be responsible for all products, services and support of Microsoft in Greater China, and will accelerate Microsoft's transformation in the region to build a leading productivity and platform company in a mobile-first, cloud-first world.

According to the reporter, Correia joined Microsoft in 1994 and has been there for 22 years. He has been the president of Microsoft France since 2012. Prior to that, he also served as the chief financial officer of Microsoft's global marketing group.

Correia is not familiar with the Chinese market. But his predecessor, He Lefu, who has worked in Greater China for four years, was in the same situation when he first came to China.

In April 2012, Microsoft broke the 20-year tradition of having a Chinese as CEO of Greater China and appointed Microsoft Germany General Manager He Lefu as Microsoft's global senior vice president, chairman and CEO of Greater China.

Public information shows that Helefu has worked at Microsoft for 11 years. In addition to Microsoft Germany, he also managed Microsoft's partner business in Europe, the Middle East and Africa in Paris, France, and served as the general manager of Microsoft's Small and Medium Enterprise Solutions and Partner Division in Western Europe.

According to the reporter, after taking office, He Lefu actively promoted the localization of Microsoft in China.

During his tenure, Microsoft cooperated with 21st Century Interconnection to bring the Azure public cloud platform to China, becoming the first and only global public cloud service company in China. In addition, in 2015, Microsoft signed a memorandum of understanding with China Electronics Technology Group Corporation, announcing that the two parties would establish a joint venture company in which China Electronics Technology Group Corporation would hold a 51% stake to develop the Windows 10 operating system "exclusively for" the Chinese government and state-owned enterprises.

He Lefu once said that the support provided by the government and related companies, as well as the partnership reached with them, are "very important" for Microsoft to understand how to participate in the Chinese market.

Judging from He Lefu’s new appointment, his four-year performance in Greater China has been recognized by Microsoft’s senior management.

Microsoft said that Helefu will go to Singapore to take up the post of President of Asia Pacific. In addition to being responsible for all products, services and support of Microsoft in Asia Pacific and accelerating Microsoft's transformation in the region, he will also oversee Microsoft's 12 branches in 39 countries and regions, including 13,500 employees and more than 100,000 partners.

New coach faces localization test

Leading Microsoft China to become more localized remains the new coach’s focus.

Jean-Philippe Courtois, President of Microsoft International Group, said: "Greater China is not only critical to the long-term development of Microsoft, but also a source of global innovation. Courtois' successful experience in driving innovation and digital transformation makes him the best person to take over the leadership of Microsoft in this dynamic and diverse region. I look forward to his continued promotion and support of localized cooperation, and to helping every person and every organization in Greater China achieve extraordinary results at multiple levels, including enterprises, cities, provinces, and countries and regions."

According to the reporter, Microsoft has been in China for more than 24 years since 1992. Currently, Microsoft Greater China has the largest research and development center outside the United States.

However, some Microsoft China insiders told reporters that foreign CEOs do not understand the Chinese market and would rather have local senior executives take over.

In addition to localization, Microsoft China under Krejciech Snyder's leadership will continue to face the test of the State Administration for Industry and Commerce's antitrust investigation into Microsoft.

In June 2013, some companies reported that Microsoft had violated China's Anti-Monopoly Law by not fully disclosing information related to the Windows operating system and Office software, which led to compatibility, bundling, file verification and other problems.

In June 2014, the State Administration for Industry and Commerce launched an investigation into Microsoft and subsequently announced the progress of the investigation several times. However, the latest news about the investigation is that on January 5, 2016, the State Administration for Industry and Commerce's special investigation team conducted an antitrust investigation into Microsoft and relevant persons in charge of Microsoft Greater China.

At that time, the State Administration for Industry and Commerce asked the person in charge to explain the major issues in the electronic data obtained since the investigation into Microsoft's suspected monopoly case, and required him to submit complete explanatory materials in a timely manner after the inquiry and investigation.

In addition to the protracted antitrust investigation, Ko will also face the "turbulent" Microsoft China.

Microsoft's third quarter report for fiscal year 2016 showed that its revenue for the period was $20.531 billion, down 6% year-on-year, and its operating profit was $5.283 billion, down 20% year-on-year. Its net profit of $3.756 billion was down 25% year-on-year.

Smartphone business is considered to be the main reason for Microsoft's declining performance. The market share of WP system, which Microsoft bought back for $7.2 billion, has dropped to less than 1%. Microsoft also admitted at the Build conference that Windows phone business is not the focus this year.

In May this year, Microsoft announced that it would sell Nokia 's smartphone and feature phone business. A Microsoft internal restructuring report showed that Microsoft would lay off 1,850 remaining Nokia employees, 1,350 of whom were from Nokia's Finnish headquarters, but the layoffs also affected Microsoft China.

The above-mentioned Microsoft China insider confirmed to the reporter that Microsoft China has laid off employees in the former Nokia mobile phone business department this year. According to the reporter, when Microsoft announced in 2015 that it would lay off up to 7,800 employees in the mobile phone business, the former Nokia China mobile phone R&D department was also one of the hardest hit areas.

On August 2, Microsoft will release a major anniversary update for Windows 10. This may be a good opportunity for Correia to understand the rules of the Chinese market since he took office.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.