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The New Microsoft: A Plank in Other Platforms

New CEO Nadella's new moves clearly underscore the arrival of the age of platform.
Feb | 16 | 2015


Feb | 16 | 2015

Since I was a kid, I’ve played poker with reasonable success. I even won a 40-person tournament in Vegas a few years back. To be sure, it’s a thinking person’s game, a fascinating amalgam strategy, patience, aggression, luck, and skill.

Contrary to popular belief, though, not all games of chance are created equal. For instance, poker is fundamentally different than roulette. In the latter, the house must act in a certain way. Always. A dealer cannot arbitrarily decided to hit on 17 because you have 20. (For more on this, see my post on uncertainty vs. risk.)

Along those lines, one of my favorite academic interests is game theory. In both poker and game theory, actors need to make decisions based largely upon imperfect information. What should you do when you don’t know what your opponent will do? (For more on this, see the prisoner’s dilemma.) And, to boot, what do you do when you face an uneven playing field?

Enter Microsoft

Against this backdrop, I find Microsoft’s recent moves very interesting. New CEO Satya Nadella may not be the world’s best communicator, and perhaps he’s even a little insensitive. Still, he clearly understands the importance of platforms and Microsoft’s declining relevance on the most popular ones (read: Amazon, Apple, Facebook, and Google). Exhibit A: A scant six years ago, more than 90 percent of all devices connected to the Internet via some version of Microsoft Windows. Today, by the company’s own admission, that number has dipped to about 14 percent.

Use other platforms as planks in your own platform.

You’re Satya Nadella. What do you do when you assume control of a company that’s already lagging its competitors in key areas? (Microsoft’s market share on mobile devices now stands at under three percent.)

There’s no one simple solution to Microsoft’s challenges, no five-point listicle. In reality, Microsoft will have to take a bunch of risky steps and gambles, not one of which guarantees success. One such recent move: Office Everywhere, a stark departure from the company’s mindset under the Balmer and Gates’ administrations.

Simon Says

One of the key points in The Age of the Platform can be stated as follows: It’s usually wise to use other platforms as planks in your own platform. Office Everywhere won’t turn Microsoft around overnight, but at least the company’s CEO finally understands that the world has shifted. His predecessor didn’t.

Can you say the same about your company’s senior management?

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