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Microsoft finally has some focus. Will that be enough?

Microsoft CEO Satya Nadella speaks to employees
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It has now been a year since Microsoft CEO Satya Nadella published his grand vision for Microsoft as it looks to compete in the “mobile-first and cloud-first world.”

Recent moves suggest the company is slowly but surely focusing on what it calls its “core ambitions”—to “reinvent productivity and business processes, build the intelligent cloud platform, and create more personal computing.”

These changes include:

Focus. It’s a great thing, especially for a company like Microsoft, which has long been bloated by a bad habit of keeping many expensive investments alive—such as online advertising and various web services—even when it’s clear that they haven’t panned out.

What will play out now is the tension between wanting to make changes for the long term and the realities around foreseeable growth in the near term, the latter of which are less flattering for Microsoft.

For example, if you look at Microsoft’s revenue as reported, the company is still growing. But most of it is coming from the addition of Nokia’s phone hardware business—the one that might get a huge write-down soon, and hasn’t made Microsoft relevant in the global smartphone market.

Notably, Microsoft is making some progress moving its business away from the dying model of licensing Windows and Office, and is converting customers into software-as-a-service subscribers that generate recurring revenue. So the doomsday scenario that Microsoft would simply buckle under its own weight seems increasingly unlikely.

The question is whether these changes will ultimately result in a significantly smaller overall business for Microsoft, or at least a slower-growing one—which is why the company has considered other bold moves, such as its reported interest recently in spending tens of billions of cash to buy

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