With New Software Bundle, Microsoft Furthers Nadella's 'One' Push
|07/10/2017 | 09:15am|
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