The latest report from analysts at Nomura indicated that some CEOs in the software industry, venture capitalists and former executives of Microsoft Corporation (NASDAQ:MSFT) offered their advice to the newly appointed CEO Satya Nadella as he formulates product strategy for the company.
Numura analyst Rick Sherlund and his colleagues wrote that majority the executives they spoke to believed that Nadella needs to have the freedom to reshape Microsoft Corporation (NASDAQ:MSFT) and engage the new world in a more constructive way.
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They opined that the risk is if Nadella only makes incremental changes in the company, and does not go far enough to re-platform and realign the business with obvious new trends in the industry.
Finding new perspectives at Microsoft
Sherlund and his fellow analysts emphasized that there is a clear similarity between Microsoft Corporation (NASDAQ:MSFT) and International Business Machines Corp (NYSE:IBM)—both are exactly in the same place relative to changes happening in the computing architecture and new generation products.
Microsoft just like IBM needs to revisit everything in the computing industry to find a new perspective on existing assets that makes it appear to be modern assets.
Address product and organizational issues
The analysts indicated that Nadella needs to address and clean up product and organization issues that are preventing Microsoft Corporation’s (NASDAQ:MSFT) innovation.
A majority of the executives believe that Microsoft needs to embrace mobile, and the cloud. Sherlund and his fellow analysts commented that the software giant should run across iOS and Android platforms of Apple Inc (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), support open standards, and become a trusted cloud-services provider for enterprises. It should also leverage the Platform as a Service (PaaS) emerging opportunity.
Sherlund and his team said Microsoft Corporation (NASDAQ:MSFT) has greater strength in enterprises that consumer markets, but they noted that enterprise business platform is challenged by new platforms of computing and new open standards.
“A more radical replatforming that embraces new standards is likely required for growth. We are of the view that new product directions will hurt margins, so a combined strategy of enhancing shareholder value and fixing the business is appropriate,” say the analysts.