This is Satya Nadella's Microsoft Now

(AP photo)

(AP photo)

Stephen Elop, the Nokia CEO who was brought on board along with Steve Ballmer’s Nokia acquisition, is waving buh-bye to Redmond. Originally he was supposed to rescue the company’s floundering efforts in phones and tablets, but Microsoft remains in a distant third or fourth place. But there’s more, as newish Microsoft CEO Satya Nadella continues to put his stamp on the company:

Elop is not the only casualty of this new direction for Microsoft. Nadella also announced the departures of Kiril Tatarinov, head of Microsoft’s business solutions group; Eric Rudder, a 25-year Microsoft veteran who led its advanced technology and education initiatives; and Mark Penn, the advertising executive behind some of Microsoft’s most memorable—and questionable—ad campaigns.

In addition to these exits, Nadella is also shuffling existing staff, reorganizing the engineering team into three core groups: one that will focus on cloud and enterprise products, another that will concentrate on applications and services, and a third that will work on the Windows platform and devices, including Lumia phones, Surface tablets, Xbox, and Microsoft’s augmented reality device, HoloLens.

Those first two groups represent the future of Microsoft and, not coincidentally, its greatest strengths: The cloud and business users.

But it’s the third group which interests me.

At first I was going to label the third group “Other,” which is as good a label as any. But what’s in there? Lumia, tablets, Xbox, HoloLens. At this early date, HoloLens looks like the next version of the original Surface (now called PixelSense) — a giant and expensive product for corporate users who don’t have any pressing need for it. Although I’d be happy to be wrong, because HoloLens does look pretty dang cool.

Except for HoloLens, all of those are money-losing items begun or brought to fruition under former CEO Steve Ballmer. Sadly, Ballmer’s idea of innovation was to piss away a decade of growth into new markets on ill-conceived products like the Surface, or on me-too money-losers like Xbox.

(ASIDE: I’m not running down Xbox, which is a fine gaming platform. But the Xbox division has probably been overall a money loser, or maybe only slightly in the black, once R&D and marketing are factored in. And it isn’t like Ballmer or Gates invented console gaming — they were initially just looking to stymie Sony. And Xbox has yet to conquer the living room like Redmond keeps hoping.)

So we might, if we were feeling particularly malicious, call that third group “The Ballmer Group.” Or maybe “Balmer and the Group of Misfit Products.” But whatever you call it, that group at worst represents Microsoft’s ne’er-do-well products, and at best represents the company’s past.

Because notice please that mighty Windows itself is on that same misfit island, the place where Nadella has exiled Microsoft’s weakest products.

I’m not saying Windows is going to whither any time soon, or that Microsoft should pull a totally boneheaded move (aka “the Mims”) and just kill it, but it’s clear that Nadella sees Windows through the rear-view mirror.