Let’s start with number one, face reality. This may not sound like a serious strategy, but many once-brilliant companies in history have fallen to this point. For a company to rise, it must have its core products, just like Windows is to Microsoft. Because the core product is very successful, the company has also accumulated a mature business model based on this product. Gradually, the company will form a strong path of dependence on this product and business model.

However, the success of any product is closely related to the specific era background. When the trend of the times has changed, although this set of products and models is still profitable, they have gradually lost touch with the outside world. At this time, the typical reaction of enterprises is to adopt an “ostrich policy”: bury their heads in the sand, turn a blind eye to the facts, and even generate resistance, leading to missed opportunities for change. Just like Microsoft’s second CEO, Steve Ballmer, he was always unwilling to accept the reality that Windows is outdated, and he still declared in 2012: At Microsoft, nothing is more important than Windows.

The first major change after Nadella took office was to face reality and reposition the meaning of Windows to Microsoft. Nadella believes that Window’s historical mission as Microsoft’s core growth engine is over. His new positioning for Windows is to help Microsoft reach more customers as a service tool. This means that Windows will change the long-standing authorization fee model and gradually move towards free.

For example, Nadella announced that for smart mobile devices under 9 inches, which are simply smartphones, Windows licensing fees will be exempted; when the new Windows 10 version is released, Microsoft will allow users to upgrade for free within a certain time limit for the first time. . This move has greatly enhanced users’ enthusiasm for upgrading, and Windows 10 has become the fastest-growing version in history.

Before that, every time a new version of Windows was released, users had to pay to upgrade. It is conceivable that a considerable number of users are unwilling to pay, so the versions of Windows used by everyone are not uniform. This brings up a question: Which version do those Windows-based application software developers use to develop? Developed according to the new version, many people can’t use it, and the old version will be replaced sooner or later. This puts application developers in a dilemma, which is not conducive to the cultivation of developer ecology.

In contrast, Microsoft’s competitors Apple and Android are actively upgrading their operating systems for free, vigorously supporting developers to develop application software on the latest version, carefully cultivating the software ecology on their own operating systems, and providing users with a better experience. On this issue, Microsoft finally reacted, and it is inevitable that Windows will eventually become fully free.

Furthermore, since Microsoft is no longer obsessed with the monopoly licensing model of Windows, the application software running on Windows, such as Office, Skype, etc., can no longer be bound to Windows but can be promoted as independent application software. to a competitor’s platform. This is Nadella’s second big move to face reality: from a full-scale deadlock to in-depth cooperation with old rivals such as Apple and Google.

Nadella recalled that at a public meeting, when he pulled an iPhone from his jacket pocket, the audience froze, then burst out laughing. It is completely unexpected to everyone that the incumbent CEO of Microsoft will show the products of his old rival Apple in public. What they didn’t expect was that when Nadella turned on the phone, many familiar Microsoft product icons appeared on the screen – Outlook, Word, Skype, etc., as well as a series of Microsoft’s latest mobile applications. This is a software version specially developed by Microsoft for the iOS platform. It is not simply copied and transplanted, but carefully optimized.

Seeing this, the audience burst into warm applause, and the audience understood what Nadella wanted to convey: Microsoft is no longer a prison, but will open its software to competitor platforms with a win-win mentality. Under the impetus of Nadella, Microsoft positioned itself as the top application developer of Apple and Android systems and launched in-depth cooperation with former competitors.

In addition, Microsoft no longer regards open-source software such as Linux as its deadly enemy. Microsoft’s cloud service Azure fully supports systems based on the Linux platform. They even changed the name of Windows Azure to Microsoft Azure, just to show that Microsoft’s cloud services not only support the Windows platform.

This is the first article of Nadella’s strategic transformation: face reality, no longer use Windows as Microsoft’s core growth model, but gradually make Windows free, and at the same time open Microsoft’s application software to rival platforms.