Nadella leaves no doubt about who is in charge in first six months as CEO

He's had his share of hits and misses but he's made his presence felt from the start

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Most recently, Nadella made an appearance at the company's big partner event, the Worldwide Partner Conference, held in July. There, he and other top executives urged partners of all stripes to embrace cloud computing, saying Microsoft doesn't have enough partners selling these cloud products.

While that message was all well and good, En Pointe Technologies' Hogan said that Microsoft still needs to further tweak and refine the incentives it gives to resellers of its cloud products, like Office 365 and the Azure services.

Gartner's Adrian said Nadella should do more hand-holding of enterprise customers when it comes to steering them through the transition from on-premises deployments and deals to cloud, subscription-based purchases.

"So far he's been fairly quiet about the shift in how enterprise customers will pay; subscription-based pricing is new and disruptive to Microsoft's relationship with its customers, and licensing shifts will be a challenge for the year ahead as well," he said.

Nadella needs to help enterprise customers navigate these changes patiently, and resist the temptation to rush them based on sales metrics, Adrian added. "That may slow transitions, but retain goodwill and ensure more complete migrations instead of moves to alternatives."

Mixed reviews on the layoffs, Nokia deal and hardware strategy

Forrester's Johnson gives Nadella low marks for the way he articulated the need for the layoffs in the memo he sent to employees. "It was full of management-speak instead of empathy and humanity. He missed a key opportunity to connect and build trust and support with employees," he said.

The IFRC's Happ is also unimpressed with the process of downsizing and flattening the organization, which he said is understandable but which he found was executed rather arbitrarily. "Some very good people were let go, and with them an exit of important knowledge. It takes longer to be surgical, but ultimately better for the patient," Happ said.

However, Gartner's Adrian says the restructuring isn't just about shrinking the staff. "There has already been significant investment in new positions and people to fill them," Adrian said, adding that the company also appears to be trying to streamline and emphasize a flatter management structure.

Certainly one of the biggest challenges Nadella is dealing with is the integration of the Nokia devices and services business, for which Microsoft paid more than US$7 billion last year.

Most of the layoffs announced in July will come from the Nokia staff that came over with the acquisition, which closed in late April, leading some observers to question whether Nadella is significantly less than enthused about the deal than Ballmer, who brokered it.

In late July, during the fourth-quarter earnings report conference call, Nadella gave further indications that he's not as gung-ho about Microsoft-made hardware devices as his predecessor.

"Our approach to first-party hardware going forward is clear: At times we'll develop new categories like we did with Surface. And we will responsibly make the market for Windows Phone," he said then. "However, we're not in hardware for hardware's sake, and the first-party device portfolio will be aligned to our strategic direction as a productivity and platform company."

An early victim of that more skeptical vision of Microsoft's mission as a hardware maker was a long-rumored smaller Surface tablet, reportedly called Mini, whose development was axed.

Industry analyst Jack Gold from J. Gold Associates interprets the layoffs as a sign that, unlike Ballmer, Nadella doesn't want to remake Microsoft in the Apple model and compete against it directly.

"Nadella rightfully understands that it shouldn't go there," Gold said via email. "Nadella's focus on productivity is the right approach to Microsoft's future in my opinion, including the focus on how to make the OS better, and services in the cloud."

In fact, Gold believes that in the next 18 months, Nadella will exit the phone business, as well as scale back or exit the Surface business.

However, Nadella has said he is enthusiastic about the Surface Pro 3 computer, which Microsoft positions as a dual-use tablet and laptop, and about other Microsoft hardware products, like the Xbox gaming console and the large Perceptive Pixel displays.

En Pointe Technologies' Hogan said, however, that partners need Nadella to clarify the strategy around the Nokia devices. "He needs to be more in-depth about that. It's not clear where they're going with it," he said. "He's saying 'mobile first' but that's a bit unclear."

For Hogan, the Lumia smartphones are excellent for work, but lag iPhones and Android devices for personal use, and these days people expect their smartphones to be useful for both scenarios.

He's more positive on the Surface Pro 3, saying Microsoft really got it right with this third rev of the device, which En Pointe Technologies resells as well. "The product is robust and is starting to replace laptops," Hogan said.

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