Steve Ballmer hailed from Detroit, the son of an automotive industry exec, and forever carried with him that “Buy American” mentality. It’s why Microsoft’s (MSFT) executives were only allowed to toy around with rivals’ smartphones for a couple of days. You could have a peek and that’s it. Microsoft people used Microsoft phones. Such was the natural order of things.
The order has changed with the arrival of Satya Nadella as chief executive. His top lieutenants can tote whatever devices they want for as long as they want. They can—if you’ll believe it—even use these rival phones in public. It’s a small but significant change and one that, executives say in private, would have been impossible under Ballmer.
Microsoft’s employees now get to experience the pros and cons of rival products and feel firsthand the nuances that emerge over time. They also get to see how Microsoft’s applications run on non-Microsoft devices. And that might be the most important result of Nadella’s policy. It gets to the heart of the wholesale change at Microsoft that Nadella hopes to inspire.
Nadella summoned a handful of reporters to Microsoft’s headquarters in early November to explain his thinking over dinner and several hours of meetings. Microsoft, he said, needed to define its identity: What is it that Microsoft can do for people that no one else can? What does Microsoft symbolize to people? He’s come up with the term productivity. “I don’t think of it as some narrow thing you do at work,” he said. “We think of productivity as the core driver of the use of technology to create fulfillment in individual lives and drive economic gain for organizations and entire economies.”
Productivity is a loaded word, and this isn’t lost on Nadella. He realizes that people will associate it with productivity software and the idea that Microsoft wants you to make more PowerPoints and work, work, work. Nadella hopes people will take the time to listen to Microsoft’s broader pitch and realize that productivity means something grander for the company. Yes, it’s Word making it easy to knock out a document. But it’s also the Revolv app compiling dossiers on people ahead of a meeting, Xbox Fitness pushing you during a workout, the Cortana assistant rearranging meetings so you can get to a son’s soccer game, and Skype translating a call with China on the fly. As Nadella says, “We want to empower people and organizations to get things done and make things happen. That is the essence of Microsoft.”
The productivity mantra could well blow up in Nadella’s face. He wants to redefine how people think about Microsoft but might end up reinforcing everything people dislike about the company. New tools to make work easier? Ho-hum. Eyes roll. Sounds like the same old Microsoft trying to dress up the same old clunky code. Not to mention that it takes an hour or two of explanation to figure out how productivity encompasses things like Xbox, Windows Phone, and Minecraft—and very few people have any inclination to listen to Microsoft for an hour or two.
As far as Nadella is concerned, the whole productivity thing comes from an authentic place. When he thought about what would be missing from the world if Microsoft disappeared, it was the absence of a tool maker—a company that obsesses over providing people with the bits and pieces that make the digital world work. “Apple sells devices,” he says. “Google is about data or advertising. Our identity really is about empowering others to build products.” Nadella decided that Microsoft might as well own the productivity idea rather than run away from it.
Microsoft has pumped out a surprising number of products over the past few months that back up Nadella’s talk as more than just marketing shtick. During the November meeting, Microsoft demonstrated an upcoming product called Sway. It’s an online service that lets people take images, text, and videos and display them in a rich, modern way like you might find on something like Medium. Templates guide the user through the process and work well enough that you can assemble a Sway on a smartphone, producing a glossy presentation or a spectacular diary in a few minutes. A limited group of people can trial Sway now, and it should reach the general public next year and then become a standard part of Office.
In recent weeks, Microsoft has issued a stream of productivity software announcements. It formed a deal with Dropbox that will let people tap directly into their Dropbox files from Office applications and edit Office files from the Dropbox app. Now, Microsoft will no longer force people to go through its own online storage service OneDrive. There’s Office for the iPad. Outlook for the Mac. Office on Android tablets and phones. In a number of cases, these tried-and-true Microsoft applications work better on iOS or Android than on Windows Phone.
Microsoft is also in the midst of merging Skype with its corporate messaging service Lync to create a single Skype product that—should you so choose—can unite personal and work contacts in one place. Other new products include GroupMe, a group messaging app that has become popular on college campuses, and Delve, an app that figures out subject matter experts within a company.
At each turn, Microsoft is blending consumer and corporate technology. It’s coming out with surprising, delightful apps that lean on its artificial intelligence technology. It’s making software that is wholly independent of Windows.
Another big idea, then, is that Windows is just one tool in Microsoft’s arsenal. Each year about 300 million PCs will be sold with Windows on them, and that’s very, very, very, very good for business. But away from that profitable starting point, Microsoft wants to be a universal tool maker. It plans on investing more in a wider range of tools than any other company on the planet by a large margin. “Who else will care as much about the craftsmanship of these tools?” Nadella asked.
Microsoft has started to make flat-out dazzling products. It’s hard to believe, but it’s true. The new Band health monitor has sold out and brought long lines to Microsoft stores for the first time ever. The new lineup of Windows Phones rivals anything else out there in terms of hardware and software design. Getting people to entertain such ideas and give forgotten products a try is another matter. The promise of more productivity hardly seems like the clarion call that Microsoft has been missing, but that’s what Nadella is betting on—and perhaps he’ll surprise us.
