Monday, July 14, 2014

Is This Really a Mobile-First Cloud-First World?

Last week ended with a big, long memo from Satya Nadella, CEO of Microsoft, filling the news gap of Summer immediately before Microsoft's big WorldWide Partner Conference. The conference kicks off today.

I wish I was there, but Microsoft's WPC doesn't really offer much for small business partners. No matter what else is said or done, the company focuses on its two primary sources of revenue: Games/Home Entertainment and enterprise-level software deployment. It's a great series of parties. But actual, useful, business-related discussions that will help SMB consultants make more money? Not on the agenda.

If you really want to read the 3,100+ email from Mr. Nadella, go to - but that's obviously not a permalink, so go there fast.

What you'll find is a marketing document with approximately zero personal message and lots of platitudes. The most visible messages are:

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


2) Xbox is going to stay around. It makes a lot of money.

Several pundits have made a point of saying that Steve Ballmer's era of "devices and services" is officially coming to an end with the new emphasis on "productivity and platform." I think this is 100% shift in marketing and is not a slap at Ballmer in any way. It's just a new campaign for a new year.

The other news item mentioned by all the pundits is that the Nokia acquisition is now complete and the new Microsoft has 127,000 employees. That's too many people and everyone's waiting to see where jobs will be cut. This speculation is probably FAR more interesting to Microsoft employees than anyone else.

Nadella did promise that he would say more about the company's core focus when Microsoft reports fourth quarter earnings on July 22.

Mobile-First Cloud-First World?

Let's get back to the new marketing mantra. Mobile-First Cloud-First World.

From the first time I heard that, it just sounded wrong. Do you live in a mobile-first world? Do your clients? Does Microsoft (or Apple or Google)?

I don't think so.

Mobile is really important. REALLY important. Same with Cloud. Really important.

But look at where you make money. Look at your clients. Look at the number of devices you support and where they spend the most money for hardware, software, and support. It's on desktops, servers, and network equipment. I don't care whether a client has five employees or five hundred, they are more likely to spend more money on printers in a year than on phones.

Tablets are coming on strong. But for specialty applications. They will never replace the vast majority of cubicle-dwelling, desktop computer-using workers. They will create new jobs and make new services possible. But the average client with 30 employees is still going to buy 30 desktop computers. Plus tablets. Plus some laptops.

Remember: Outside of the partners/owners, most employees don't get a work cell phone. Or a tablet. So the corporate world is going to continue to be PC-based.

If you download the Excel spreadsheet with Microsoft's most recent numbers on segment revenue ( at, you'll see that Commercial Licensing represents 49% of all revenue for the nine months ending March 2014. Add commercial "other" into the mix and you've got 57% of all revenue. I assume the last three months will look about the same.

That 57% of revenue also represents 67% of all profit.

Obviously Microsoft enjoys growth in the "mobile" and "cloud" revenue as they push people to Office 365.

But when I look at the big picture, I still don't see an actual direction form Mr. Nadella or Microsoft. Mobile First doesn't really ring true. Cloud first isn't true for most people. I recognize them. They're market forces. But I also know where the money is.

So I wish my friends at Microsoft the best of luck in the coming job cuts. And I will advise my coaching clients to keep mobile and cloud in the mix. But I'll keep my business going with open licensing and hardware sales.

Because most technology is not mobile and most technology is not cloud.


1 comment:

  1. Microsoft provides clear path to 'mobile first, cloud first' world as one-year. While it's very common for customers to manage a mixed cloud. I wish I was there, but Microsoft's WPC doesn't really offer much for small cloudwedge is the productivity and platform company for the mobile-first and cloud-first world.


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