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Chuck Schaeffer Best of Convergence — Microsoft CRM Insights

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 By on March 7, 2014

Dynamics CRM Highlights and Take-Aways

Microsoft Convergence returned to the Georgia World Congress Center and ended today with a flurry of announcements and product plans that made this 18th Convergence far more notable than most. I'll use this blog post to comment on the big picture — which is most certainly going to impact all other facets of the company — and then explore some of the specifics behind the Dynamics CRM announcements.

Change is in the Air

Microsoft has undergone more top leadership changes in the last 30 days than in the last 30 years and we’re already seeing signs that more change is on the horizon. On February 4 Satya Nadella became the third CEO of Microsoft. It’s not lost on the Dynamics channel that he previously followed the legendary Doug Burgum as the VP of the Business Solutions Division, albeit for a very short period of about 6 months.

It was never on the agenda, but I expected this Convergence to be a coming out conference for Nadella. I suspected he would show up to meet 12,000 of his best customers, partners and advocates and rock the place. That never happened. What a lost opportunity.

Microsoft also has a new Chairman of the Board. John Thompson is relatively new to the board at about two years, but is regarded as the lead independent member. Many acknowledge him as the driver who accelerated Steve Ballmer’s departure and who headed the special committee to find Ballmer’s successor. He’s got a lot riding on Nadella and I firmly expect these two to introduce a much needed change to what has been an uneasy status quo at Microsoft.

Founder and former Chairman Bill Gates has transitioned his title to ‘Founder and Technology Advisor’ which despite claims that he’ll be spending more hands-on time with the company, many insiders and analysts are suggesting his participation will become even more limited.

Oh, and the wildcard in the leadership structure is clearly new board member Mason Morfit of ValueAct, who last year took a $2 billion stake in Microsoft and has his sights set on some methods to capitalize on that investment. He’s part of the "unlock shareholder value" crowd that will be pushing for big changes.

Although the future is uncertain, what’s clear to me is that Microsoft has failed to keep up with rivals (Amazon, Apple, Google) and unlock shareholder value for over a decade. Expect Nadella, with Thompson’s sponsorship, to rationalize the company’s cost structure, divest underperforming lines of business, sell a few cash cows that are on the downside of the (late majority) chasm curve, buy back a boatload of stock, and change the product mix toward more software (Azure, Dynamics and Office 365) and less hardware. Also expect a far more significant company restructuring than we’re accustomed to seeing after most June 30 year ends.

While company changes are needed, I’m hopeful that Nedella, Thompson and crew recognize that only innovation will return Microsoft to greatness. Too much focus on shareholders and analysts and too many meetings with CFOs and bean counters will most certainly stifle innovation and continue the stagnation. More time with customers and outsiders will go a long way in challenging a culture of complacency and stimulating some much needed creative thinking.

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More time with customers and outsiders will go a long way in challenging a culture of complacency and stimulating some much needed new thinking.

 

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