Here are the businesses that Microsoft could cut next

Microsoft says that its $US7.6 billion write-off of its disastrous Nokia acquisition is part of a “restructuring” effort “to better focus and align resources” around its smartphone efforts — a market Microsoft never really ever got close to dominating.

The layoffs come shortly after Microsoft offloaded its maps business and its display advertising business.

So has Microsoft finished cleaning house or is the company likely to exit more businesses as part of its “focusing and aligning” mission?

A close look at Microsoft’s sprawling empire shows other lagging businesses that probably don’t fit in with the company’s new productivity-first mission statement and might benefit from a sale, spin-off, or shutdown. Here are some of the main ones:

Retail: First announced in 2009, the Microsoft retail stores were an obvious product of Apple envy — Microsoft even poached Apple Store employees and purposely placed the first few locations right near Apple Stores. But a Black Friday 2014 survey from Piper Jaffrey showed that the Microsoft store was significantly less popular than its Apple counterpart. At this point, Microsoft Stores are basically a joke, so close them and save some cash.

Dynamics CRM: Another place where Microsoft is an also-ran. Customer relationship management (CRM) is a hot market, with $US14 billion in global revenues in 2014.

But a Gartner report places Salesforce as the market leader with 18.6% market share, followed by SAP at 12.1% and Oracle at 9.1%. Dynamics is fourth with 6.2%. Given its lagging position, and the fact that it doesn’t really fit into the productivity-first, developer-first world envisioned by Microsoft, it might be time to rethink where Dynamics fits in.

Surface hardware: It’s true that revenue from Microsoft’s Surface tablet/laptop all-in-one is on the upswing, with a reported $US713 million in sales in the last quarter, representing a 44% jump over the same period of 2014. But even that number lags behind Apple’s iPad sales. And even then, iPads are a continual source of disappointment for Apple investors.

Sure, the most recent Surface results predate the launch of the new, critically-acclaimed Microsoft Surface 3 tablet, but it’s hard to see Microsoft taking the lead in this market. Maybe so long as it’s streamlining its phone business, it’s time for Microsoft to reconsider if it wants to be in hardware at all — especially since it doesn’t quite jibe with that big productivity push.

Microsoft Xbox: At this year’s E3 2015 video game event, the Microsoft Xbox One made some big announcements that spurred a lot of interest. And sooner or later, Microsoft is going to bring Windows 10 to the Xbox One, making it easier than ever to bring games and apps to the console.

But it’s not exactly a productivity-driving device. And worldwide, the Sony PlayStation 4 is outselling it almost 2-to-1. While Microsoft has repeatedly expressed its support for the Xbox as a platform, investors and analysts have made no secret of their desire to see it spun off into a separate business.

Microsoft Bing: Thanks to a series of strategic partnerships with companies like Yahoo, Bing’s marketshare is on the rise, recently. hitting 20% in the US for the first time ever. But it’s still way behind Google in marketshare and advertising revenue. In the wake of Microsoft’s big changes to its display advertising business, it might be time to finally exit the search market.

Microsoft is a big company, with some of the smartest people in the world working for it. It’s always tough to make big changes — especially with 7,800 jobs on the line, as in the case with the Nokia write-off. But it’s also true that Microsoft and its new developer-first approach could benefit from reallocating its resources.

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