With New Software Bundle, Microsoft Furthers Nadella's 'One' Push
July 10 2017 - 9:29AM
Dow Jones News
By Jay Greene
Microsoft Corp. plans to announce a new bundled software
offering Monday that will leverage its dominant operating system
and productivity applications to provide a boost to products that
aren't as widely used.
The move reflects an effort that Satya Nadella has pushed after
he became chief executive a little more than three years ago to get
Microsoft's disparate divisions to work more closely together. That
approach, dubbed One Microsoft, was aimed at ending the internecine
battles that sometimes slowed the software giant as it competed in
a variety of businesses.
At its Inspire partner conference in Washington, Microsoft will
debut a new product for small and midsize businesses that combines
Windows and Office with its security and mobile-device management
software. The company also will re-brand the bundle, which it began
selling to its largest corporate customers two years ago, under the
new Microsoft 365 banner.
"Culturally, we are changing the way we work," said Kirk
Koenigsbauer, corporate vice president in Microsoft's Office
division.
The new approach is also reflected in Microsoft's salesforce
reorganization last week, which led to thousands of layoffs.
Microsoft is trying to reorient its sales staff to focus on
specific markets, such as small business, rather than discrete
products.
The new bundle for small and midsize businesses, called
Microsoft 365 Business, includes licenses for Windows 10 upgrades,
a business version of Office 365, and security and management
technology. Microsoft will roll out a preview version next month
and expects it to be generally available in October for $20 per
user, per month.
The bundle will offer businesses discounts that could top 50%,
compared to the cost of buying the products separately, Mr.
Koenigsbauer said.
Microsoft has been selling a version of the bundle to large
businesses, called Secure Productive Enterprise, that will now be
called Microsoft 365 Enterprise. Mr. Koenigsbauer said that product
has seen "triple-digit growth," though he declined to provide
revenue data. "It's a substantial driver of our growth," he
said.
The combined software and new branding should simplify
Microsoft's marketing efforts, clarity the company's business
products often have lacked, said Alan Lepofsky, principal analyst
with Constellation Research Inc.
Moreover, tying products in markets where Microsoft isn't
dominant, such as security software, to products in markets where
it is, such as operating systems, will challenge niche rivals, Mr.
Lepofsky said.
"Microsoft would love to have that business over a third party,"
he said.
The product bundle already has displaced a security-software
maker at Fruit of the Loom Inc., said Chris Krebs, information
chief at the apparel company. The company already had been using
Windows 10 and Office 365, but in January switched to Secure
Productive Enterprise.
Microsoft "tying all that together was critical to me," Mr.
Krebs said.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
July 10, 2017 09:14 ET (13:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Microsoft (NASDAQ:MSFT)
Historical Stock Chart
From Apr 2023 to Apr 2024