18/02/2014 07:49 GMT | Updated 20/04/2014 06:59 BST

Coming Back in From the Cold - Why Microsoft Needs to Build Bridges in Industry Circles

"The ascent to greatness, however steep and dangerous, may entertain an active spirit with the consciousness and exercise of its own power: but the possession of a throne could never yet afford a lasting satisfaction to an ambitious mind."

So says Edward Gibbon in his work The Decline & Fall of the Roman Empire, and it's startling to think quite how true this rings in present day and specifically one notable downfall in the tech industry.

To anyone who takes only a cursory interest in the tech world, it's quite hard to understand how Microsoft has gotten itself into quite such a difficult situation. They were giants and pioneers, and they had it all. They were shaping the world, and suddenly the world left them behind - fascinating and terrifying to watch all at once.

So what happened? And where does Nadella make his first moves in plugging the dam, let alone taking his company back to the world stage for anything besides apologies? There are a lot of short-term answers being bandied around, including the somewhat extreme proposal of adopting open-source Android tech to create the next wave of MS smartphones. But moves like this hold as many dangers as they do possibilities.


No: it comes back, predictably enough, to innovation and that Gibbon quote: at the top, ambitious minds who would seek to push further are often replaced by those happy to keep things on an even keel under the misapprehension that they are safe. Monopolies are misleading, and when you're not trying to knock a rival off the throne, there's always a risk that consolidation of success crosses the line into resting on one's laurels. That is surely the only way one can explain a yearly R&D budget of $10 billion that isn't hitting the mark.

While you could focus on where that money has been going, it's easier and more important to look at where it's not, and that's developers.

It is a fool's game to fence off your share of the world and hope that people move heaven and earth to join you - that's a model that simply won't work anymore. It is why, by comparison, Apple's investment in developers worldwide to the tune of billions has seen everything change. They recognized the move to mobile and tablet not just as a change in screen size, but a change in the way that we would all soon do business and conduct our daily lives. The App Store was born, and Apple has taken care to invest in, nurture and help all those contributing to its business, with spectacular results.

By contrast, the go-it-alone Microsoft route that has worked so well for them before web 2.0 seems a century behind. Developers have lost interest in working with Microsoft, and that's hardly a surprise - the promise of fortunes yielded from attention focussed elsewhere has left Gates' legacy floundering in relative obscurity.

So yes, a quick fix could be to leverage Android tech for the next round of smart devices, but that's grabbing leftovers from a table, not serving up a show-stopping meal. It would at best be the first foothold in a very tall cliff. Focussing on new, innovative developer collaboration and communication is the only chance of climbing high. The problem is: where to climb to?

Back to business

The other indisputable problem that Microsoft needs to deal with fast and first is that they do not quite appear to know who they are, and they have lost their hold on the consumer market which once defined their popularity.

It's been a case of expanding out rather than up - when MS reached the top of the tech hierarchy they decided to focus elsewhere and began to expand the empire in a huge number of directions at once through hasty acquisitions.

Despite the money thrown at these, problems have been manifold. Only this week great new hope Jason Holtman stepped from Microsoft Gaming after only six months in the position. Skype was purchased, with what appears to be no effect on company revenue over a year later. Let's not even talk about Nokia. All the while the place at the top of the consumer tech hierarchy has been usurped and Microsoft has been left with slim pickings and a user base unsure of what they actually use and need the company for.

It is with businesses - the enterprise-level clients with the funds and in fact the need for the investment and tech dev that Microsoft could bring to the table - that the company could find a new hope. blur Group and other business-facing tech companies are thriving precisely because these customers are hugely keen to find new ways of approaching business and changing process for the better. I suspect a $10 billion R&D budget could go a long way towards helping that happen.

Nadella needs to clear and focus the hive mind of Microsoft, and that means putting a stop to the hasty and awkward acquisitions so out of sync with a company ethos waiting to be reclaimed. Now, a renewed focus on enterprise-level innovation could return an authority to the tech giant. If they can start on this path, perhaps the outside world will recognise a company that finally understands that a throne is not just hard-earned, it is hard-kept. Whether that will be enough to save them long-term is still a mystery.