Newly appointed Microsoft CEO Satya Nadella already has some tough decisions to make this early into the job. The Washington Post reports that “two influential Microsoft shareholders” believe that the future of Microsoft is in selling software to businesses, and that means killing off “non-essential product lines.”
More specifically, it means saying goodbye to Bing Surface, and the Xbox.
The call for change comes after two years of falling profit in the Windows department. In 2013, Windows pulled in $9.5 billion in profits, a setback from the $11.6 billion in made in 2012, and a huge shortcoming against the $12.3 billion it raked in during 2011.
Many of the concerns also stem from the declining demand for Windows now that other operating systems have been taking off in recent years. Unsold Surfaces are reportedly causing a $900 million loss, and Bing caused a $1.3 billion loss over the year 2013. It makes sense why the investors might have those product lines in their sights.
“Even the Xbox deserves to go, ” claims Paul Ghaffari, the wealth manager for Microsoft co-founder Paul Allen. The belief among these investors is that every product that loses Microsoft money should be spun off so that it could focus solely on enterprises.
This would require Nadella to turn his back on everything Bill Gates and Steve Ballmer have built the company to be over the last twenty years, which was targeting consumers with new products. It doesn’t seem like he wants to play ball with the investors’ opinions though. Gates has stepped down as chairman to aid in the same devices department that the investors want to get rid of, and his presence alone might make it difficult to scuttle so easily.
Hooray for the behind the scenes politics of business! And you thought the Wii U was in trouble. Honestly, the Xbox line isn’t going anywhere anytime soon, but we’ll have to follow Nadella and the balancing act he might have to achieve to get Microsoft back on track.