A Smartphone in Every Pocket

"Our slogan from the very beginning was ‘A computer on every desk and in every home,'" said Bill Gates during the height of Microsoft's dominance. As many have noted, that goal has been achieved. It's been achieved years ago, in fact. Whether you were an early adopter, a late one, or even a Mac user, you've undoubtedly had to use a PC at least a few times a month, or more likely, every day. Windows has won, even Steve Jobs admitted to it. If the CEO of your key competitor says so, you know you've won. 

But now look what has happened. Windows computers are on the inevitable decline, year by year. The Surface tablet was an extremely costly public failure. To top it all off, Windows Phone never took off like it was planned to. Despite revenues still reaching record highs, it is clear that Microsoft is in an uncertain position, and management kerfuffles don't alleviate that worry. Microsoft needs the next big thing, a profit center that will lead it for the next decade. Given that smartphones have a market reach far greater than PC's, that should be Microsoft's core focus. Fortunately, they have all of the elements to succeed; it just amazes me that they don't see them.

Here's what I would do to revive the company if I were Satya Nadella.

  • Make a Windows Phone. Nothing bad was ever said about the quality of the Surface. In fact, reviewers said that it had fantastic build quality. Now that Microsoft owns Nokia, who rivals Apple in hardware design, making a beautiful Windows Phone should not be a problem. 
  • Bundle Free Services. Microsoft has Outlook, OneDrive, Skype, Office, a music store, a video store, and an app store. That's an ecosystem that is far more comprehensive than Apple's. Microsoft's core competition in services is actually Google. Here's how I would tackle this. Google has the reputation for being open and public, which rubs many users the wrong way. Microsoft should take the Apple approach and preach data privacy and the highest level of integrity. Moreover, make all those services free for Windows Phone users. Free calling and texting with Skype, free email with Outlook, free cloud storage with OneDrive, free Office apps. Hell, even make music streaming free for a certain number of hours per month. Right now, the main thing stopping consumers from purchasing Windows Phone devices is the lack of apps. Offering all of these services for free would compensate for that app shortage and would undoubtedly bring many new users to the platform. And developers follow the users. Note that making all of these services totally free for Windows Phone users will be an extremely expensive short term decision, but in the long term it will pay off. 
  • Platform Lock In. Apps don't lock in users, but ecosystem services do. I can switch easily from an iPhone to an Android phone and back, because apps like Twitter, Facebook, and WhatsApp are platform agnostic. They offer essentially the same content on all devices. Photo storage, playlist preferences, and documents in the cloud, however, are all things that keep users locked in to your platform. Give iPhone and Android users a compelling reason to switch to Windows Phone with the bundled services above, and keep them glued to it. For example, offer a service that automatically backs up all user photo's in the cloud, give them unlimited storage (unlike Apple, which provides a limited amount for backups), and let them access those photo's online and share them with friends and family. When people are given a compelling free service, they use it. When they use it, they are locked in to the platform. Who would want to switch platforms when they have thousands of photo's saved in OneDrive? That's right...nobody. 

There's one last thing I would do as CEO, that's that marketing the Microsoft ecosystem. Show people why they should switch, and how many free services they get from doing so. Users love free stuff, and Microsoft needs users. Give them what they want, and you will receive them.