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Preston Gralla: Memo to Nadella: Copy IBM

Preston Gralla | June 10, 2014
Microsoft's situation in 2014 is eerily similar to IBM's in the late 1980s, and it can save itself the same way.

But Nadella still hasn't completely abandoned the business strategy he inherited from Steve Ballmer, which included devices as well as services. Nadella should take a page from IBM and abandon hardware as well — it's a low-margin business, and Microsoft can't compete there. The company has already racked up $1.2 billion in losses on its Surface line, and more losses are certainly on the way.

If Nadella follows IBM's lead, it won't take 20 years to restore Microsoft's lost luster. Within five, it could again be in the forefront of the technology industry, not trying to play catch-up.

 

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