Previously, we discussed Microsoft’s (MSFT) operating segments’ performance in fiscal 3Q18. During the quarter, the reorganization of the company’s engineering divisions, when it split its Windows and Devices Group, was major news. As we’ve discussed, calendar 1Q18 marked a 14th straight quarter of zero PC market growth. This sluggishness, along with Microsoft’s strategy to become a cloud company, led to it allocating more resources towards its cloud and AI (artificial intelligence) groups, relegating Windows to the back seat.
Microsoft’s business reorganization also included the announcement of Terry Myerson’s departure. With a 21-year association with Microsoft, Myerson led the Windows and Devices Group as executive vice president and saw the launch of Surface devices and Windows 10.
Microsoft’s moving towards Linux
In recent years, Microsoft has been moving away from its Windows-centric strategy, embracing Linux. According to ZDNet, in late October 2015, Microsoft Azure chief technical officer Mark Russinovich said, “It’s obvious, if we don’t support Linux, we’ll be Windows only and that’s not practical.” Microsoft joined the Linux Foundation in 2016, and Windows Azure was changed to Microsoft Azure, as many users now run Linux on it. In mid-2016, Microsoft introduced a Linux version of its SQL Server database software.
Linux, an open-source operating system, has appeal as a target platform. It’s not only economical but also very well suited to and understood in the current cloud environment.