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Why Satya Nadella's Vision Is More Important Than Microsoft's Earnings

Stocks in this article: MSFT AAPL IBM

NEW YORK (TheStreet) –– Microsoft (MSFT) investors will be looking less to the company's earnings and more toward how CEO Satya Nadella plans to keep Microsoft relevant in the future, as its business comes under attack from almost everyone in Silicon Valley.

Under Nadella, Microsoft has made it a point to focus on the enterprise, enabling businesses and employees to have better experiences with Microsoft's cloud and Enterprise Mobility Suite, which may be affected by the recent Apple (AAPL)-IBM (IBM) deal.

"Beyond back-end cloud infrastructure, our cloud will also enable richer employee experiences," Nadella wrote in a recent email to all Microsoft employees. "For example, with our new Enterprise Mobility Suite, we now enable IT organizations to manage and secure the Windows, iOS and Android devices that their employees use, while keeping their companies secure."

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In Nadella's short time at Microsoft, he's made a few announcements that have boosted Microsoft's profile not only with IT departments, but the media and investors as well. In late March, Nadella finally announced that Microsoft Office would be available for the iPad, firmly putting Microsoft's enterprise office suite into the hands of millions of mobile devices. Following the announcement, Nomura Equity Research analyst Rick Sherlund noted that the move was less about hurting Microsoft's legacy businesses, and more about Microsoft "moving to other platforms where users can benefit from access to Microsoft products."

There was also the Surface Pro 3 announcement in mid-May, as Microsoft positioned the device as a replacement for laptops and tablets, with Nadella noting that Surface was built "to create new categories and spark new demand for our entire ecosystem." 

Microsoft is no longer a device and services company (Surface not withstanding, apparently), according to Nadella. "Our passion is to enable people to thrive in this mobile-first and cloud-first world," the CEO wrote in a July 10 email to employees. Investors have been taking Nadella's message in stride, pushing shares up 20.6% since the start of the year and 23.7% since Nadella took over for Steve Ballmer on Feb. 4.

Analysts will likely press Nadella on his vision for Microsoft, following the CEO's email to Microsoft employees and his subsequent email detailing a massive layoff, as Microsoft is set to cut 18,000 employees.

Analysts surveyed by Thomson Reuters are expecting Microsoft to earn 60 cents a share on $23 billion in sales.

Going into the report, analysts were bullish, and interested in hearing what Nadella has in store for the future of Microsoft. Here's what a few of them had to say.

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