The chang­ing par­a­digm


Along with the re­cent ac­qui­si­tion of Nokia’s smart­phone busi­ness for $7.1 bil­lion, Mi­crosoft also an­nounced one of the big­gest in­ter­nal trans­for­ma­tion—that from a soft­ware com­pany to a de­vices and ser­vices com­pany.

But Mi­crosoft has of­fered scant de­tails about the trans­for­ma­tion roadmap. Part­ners how­ever, be­lieve that this is an ex­is­ten­tial trans­for­ma­tion. “For a com­pany which for the last three decades has been a dom­i­nant player in the client-server soft­ware space with rev­enues of more than $60 bil­lion from om soft­ware li­censes alone, this trans­for­ma­tion n will be ex­is­ten­tial. Its not go­ing to hap­pen overnight and there will be a mas­sive in­ter­nal re­or­ga­ni­za­tion,” in­fers Suresh Ra­mani, CEO, Tech­gyan, Mum­bai.

Many an­a­lysts be­lieve that the ac­qui­si­tion of Nokia was Mi­crosoft’s last chance to make any im­pact in the mo­bil­ity y mar­ket. With An­droid op­er­at­ing sys­tem steer­ing ahead with more than 70 per­cent of the mar­ket­share, iOS at 20 per­cent, Mi­crosoft has man­aged to ac­quire less than 10 per­cent mar­ket­share de­spite be­ing in the mo­bile OS seg­ment for the last 5 years. The Nokia ac­qui­si­tion will al­low Mi­crosoft to make a more ag­gres­sive pitch in this mar­ket, now that it has full con­trol of the GTM.

For a com­pany which has been a dom­i­nant player in the client-server mar­ket for the last three decades, the trans­for­ma­tion into a de­vices and ser­vices com­pany will have its own set of chal­lenges. The Nokia ac­qui­si­tion how­ever, could prove handy

“Mi­crosoft has to make an im­pact in the smart de­vice mar­ket. The PC mar­ket is shrink­ing and Nokia’s ac­qui­si­tion was Mi­crosoft’s best bet to stay rel­e­vant in the post PC pe­riod. Over the past six months we have seen some good prod­ucts be­ing launched un­der the Nok Nokia Lu­mia brand and Mi­crosoft’s Sur­face tablet tablet. With en­ter­prise mo­bil­ity gain­ing mom mo­men­tum Mi­crosoft with its de­vices bu busi­ness can re­ally do well,” feels Devesh A Ag­gar­wal, CEO, Com­pu­soft.

On the ser­vices front, Mi­crosoft is b bet­ting on cloud ser­vices, in­clud­ing Of­fice 36 365 and Azure, which has grown 12 p per­cent from $2.87 bil­lion in 2012 to $3.2 b bil­lion in 2013. Many an­a­lysts be­lieve that in 2014 Mi­crosoft could look at ex­pand­ing its cloud port­fo­lio ei­ther by ac­quir­ing com­pa­nies or launch­ing new ser­vices.

Cer­tainly 2014 will pro­vide more clar­ity on how Mi­crosoft even­tu­ally plans to make the tran­si­tion from a soft­ware com­pany to de­vices and ser­vices com­pany. How­ever one thing is clear that its not go­ing to be easy.

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