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Microsoft's US$84 million man: What's Nadella done to earn it?

Tim Greene | Dec. 18, 2014
Windows 10, cloud gains, lower license fees for hardware vendors are bold moves whose effectiveness is yet to be determined.

A unified operating system
Nadella has announced Microsoft is working on a single operating system, blending together Windows, Windows Phone and Xbox OS. He has made steps in this direction by merging the development teams for the three platforms into a single group. Details are sketchy but it will include common APIs, application development tools and the ability to reuse application code regardless of device. Applications would be sold in a common store.

The most concrete result so far is the announcement of universal Windows apps that can, with little modification, run on Windows tablets, PCs and phones, and that can be bought from a single Windows store. That vision is still a work in progress, although Windows 10 is rumored to support these universal apps.

The make-or-break factor is whether developers will get onboard with the project, something Microsoft has been wooing them to do.

Apple matters
If Nadella hasn't embraced Apple's iOS devices, he's at least acknowledged them, which is a big step toward making some money off them. Since he took over, Nadella has ushered in free Office apps for iPhone and iPad Word, Excel, PowerPoint, OneNote, Lync.

Free Office apps for Android tablets are coming early next year, and in the meantime Microsoft is revamping Office apps for Android phones so their user interface is more similar to that of Office apps for Android tablets.

These free apps don't come with the full Office feature set, which requires a paid Office 365 subscription. So it's the freemium model of offering some features at no cost in hopes they will spark a desire to pay cash for the full set.

Standing by devices
Nadella bucked the advice of a vocal group that says Microsoft should get out of the hardware business. He not only promised the company will stay in it, he expanded hardware offerings with the introduction of a wearable device.

He is standing by Surface Pro, the company's hybrid tablet/laptop designed to best realize the potential of Windows 8.1, despite its lackluster sales and a flagging PC market. He is also standing by the decision to sell Microsoft-made phones based on the company's purchase of Nokia. The deal was done when Nadella took over but he's pressing on with it, not by competing at the high end against Apple and Samsung but rather at the low end with entry-level smartphones aimed at developing nations where it's easier to get a foot in the door.

Critics of Microsoft say Xbox represents a distraction from Microsoft's main business mission, but Nadella isn't buying into that. In fact Windows 10 is said to include a gateway application to Xbox features. "We will continue to innovate and grow our fan base with Xbox while also creating additive business value for Microsoft."


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