Microsoft Strategizes on the Boundary-free Digital Business Shift

Microsoft has generated significant news presence in recent weeks. In Saugatuck’s view, the most significant was CEO Satya Nadella’s sit-down interview at this week’s Code Conference, where he promoted a vision of Microsoft’s future as “building platforms and software for productivity.” We see his remarks, and Microsoft’s actions, as indicating a powerful shift toward enabling boundary-free enterprises and Digital Business, and indicating a massive, envelopment business strategy extension.

In the context of how the company expects to compete, Nadella stated that we’re entering an era in which Microsoft’s software and services need to be available on “all devices,” adding that “Microsoft has to build apps and platforms that are not really about a specific device, but for people.”

Bottom line: Microsoft is trying to enable itself, its users, and its channels to extend and expand what everyone’s business is and does. Saugatuck sees this as a continuing re-direction toward the Boundary-free Enterprise™ reality, which could not only result in Microsoft retaining its current influence but build its revenue sources and streams beyond the already massive presence. IT markets, be aware: The Windows footprint is expanding – everywhere.

Why is it Happening?

Today, the majority of buyers, developers, ISVs, and other IT ecosystem members have become aware that it is possible to significantly improve how they do business without risking massive technological disruption. We don’t have to standardize on one architecture, one operating system, one device type, one interface, or even one data format.

Looked at another way: When it comes to business IT, there is no “single version of the truth,” and there does not need to be. We’re becoming increasingly free of our formerly restrictive software shackles, and Microsoft is starting to show that it “gets” that.

Enterprise business and IT acknowledgement and understanding of this freedom is a core driver of what is increasingly described as “Digital Business” – the consideration, exploration, and pursuit of new ways of doing business, new opportunities for business, and entirely new businesses, based on a freedom of IT choice which is in turn catalyzed by Cloud-first approaches to business technologies and operations. Thus, the short answer to why Microsoft is pursuing and publicizing a shift in attitude from walled fortress to open city is because it needs to catch back up to its customer and partner base, who demand freedom while desiring to remain loyal.

To be frank, Microsoft, and almost every other IT Master Brand, have almost never led markets. They conceive, develop, offer, refine, and price based on what the vast majority of their buyers want, which influences what the vast majority of developers, ISVs, VARs and other partners can profit from. Saugatuck’s most recent global research survey of Cloud business adoption and use – to be published within the next two weeks – indicates that the vast majority of business IT leaders, and business leaders and buyers, are catching up to the leading edge; what were very recently considered competitive advantages for many types of business are swiftly becoming competitive necessities for all types of business.

And by proclaiming – and enforcing – this corporate culture and business paradigm shift away from “not invented here” to “let’s invent more inclusively,” Microsoft is enabling more revenues for itself from more sources. How deep and broadly this shift reaches within Microsoft remains to be seen; from our ongoing conversations with Microsofters, their partners, and their customers, a lot of necessary change, especially culturally, remains to be accomplished. And not everything is going to be pursued; opportunities for change will be (smartly) based on how they affect Microsoft’s market presence. As CEO Nadella said, “From now on, you will see us do things on other platforms sometimes, when we feel those platforms will get us more usage.”

Click here to read the Market Impact.

This blog was originally published on Saugatuck's Lens360 blog on May 29, 2014. Published with permission.

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