Microsoft's Next Move, the Disappearance of the "Middle Job" & Other News You Can't Miss Today

ONE OS TO RULE THEM ALL – After announcing cuts of 18,000 jobs company-wide last week, most of them in the Nokia mobile device business it just acquired, Microsoft was bound to be under the microscope as it declared earnings yesterday. Microsoft did slightly better than expected on revenue, slightly worse on earnings. Cutting 14 percent of the workforce was not motivated by disastrous upcoming earnings; it was a strategic move to reorganize and realign the company for future growth. (Go tell that to the 18,000 who lost their livelihood...) Overall nothing out of the ordinary in the report, except an impressive growth of the cloud business (+147%). That's what new CEO Satya Nadella wants you to pay attention to. The earnings call was a further look into his strategy of transforming Microsoft into a "productivity and platform company." Nadella announced a consolidation of all Windows products into one, so that PCs, Windows phones, Surface tablets and Xbox will all run the same operating system. (By contrast, Apple continues to run two different environments: Mac OS for desktops, iOS for mobile devices.) Business Insider's Julie Bort clarifies:

Microsoft will still sell different editions of its operating systems, for instance, a Windows Pro edition, a Windows Enterprise edition, a cheap one tightly bound with Bing for low-price devices (which we'll see by the holiday season, Nadella says). But under the hood, they will be more alike than different.

And the company will "unify our stores, our commerce and developer platforms," Nadella promised.

This is hugely important to developers. A good billion people use Windows every day. But as long as Windows was chopped up into a bunch of different operating systems that didn't work together, all of those PC customers didn't add up to phone, tablet, or living room console app customers.

One such satisfied developer is Kanwal Khipple, founder at 2toLead, who writes on LinkedIn:

Whether you look at Uber, Instagram or Yammer - a wave of startups has transformed how organizations are built. It was time for Microsoft to innovate like these challenging startups. Microsoft needed to focus on a shorter innovation cycle than 3 years for products like SharePoint and deliver it as a service. (...)

Whether you believe the moves Microsoft is making under Satya’s leadership are a good thing or bad, the innovation, integration, and unification of Microsoft products to services is helping the company move forward.

FLIGHT BAN – Few flights are now landing at Israel's main international airport. After a rocket shot by Hamas landed nearby, the US instated a ban of at least 24 hours on all flights by US airlines to Tel Aviv and many American and European airlines have suspended service to Israel's economic capital until further notice. US State Secretary John Kerry is in the city to meet with Israeli Prime Minister Benjamin Netanyahu, Palestinian Authority President Mahmoud Abbas and UN Secretary-General Ban Ki-moon. The death toll from the violence, in its third week, stands at 650 Palestinians, 77% of them civilians, and 31 Israelis, 2 of them civilians.

MH17 – Some updates in no particular order: international investigators who have finally been able to access the MH17 crash site in Eastern Ukraine say the wreckage is consistent with the suspected missile attack but also appears to have been "significantly altered" with parts of it cut away by others at the site, either maliciously or simply to reach victims. The US see no "direct" involvement of Moscow in the attack and it seems at this point more likely the plane was shot down by mistake by Russian-backed separatists. As the US and its allies believe Moscow "created the conditions" for the tragedy, Russian oligarchs prepare themselves for sanctions and are diverting their assets from London, where many reside, the Telegraph's Peter Dominiczak and Matthew Holehouse report. A train with many victims' bodies is making its way to the Netherlands, where today is a national day of mourning.

"SYSTEMIC BREAKDOWN" – It's a nasty report card for Germany's biggest bank. US regulators say Deutsche Bank has made "no progress" in fixing the financial reporting problems of its US operations, which the New York Federal Reserve calls a "systemic breakdown." Some of the reports from its US branches are "low quality, inaccurate and unreliable," according to a letter sent by a senior US official to the German bank's executives and obtained by the Wall Street Journal's David Enrich, Jenny Strasburg and Eyk Henning (paywall, subscription required). Deutsche Bank, which takes BNP Paribas' place in the crosshair as US regulators crack down on foreign banks' stateside operations, may have to resubmit its copy – and sign up for a lofty settlement.

WHICH WAY NORTH? – Two federal appeal courts rules in two diametrically opposite directions on "Obamacare." At issue is whether middle- and lower-income Americans who purchased health insurance through the federal exchange were eligible for subsidies or whether the system's only meant for those using state exchange. This is a classic case of letter of the law (it reads "exchange established by the state" versus intent of the law. "It literally seems to be a drafting error, because the law could never work if so many people were not subsidized to buy the insurance," physician advocate and LinkedIn Influencer Mary Pat Whaley explains. She adds:

The subsidies for middle and lower income Americans were one part of the "three-legged stool" of the law, along with the mandate to purchase minimum coverage, and the market reforms guaranteeing issuance of policies. Without any one of the three "legs", the law "falls over."

With lower courts in such disagreements, the question may well end up at the Supreme Court, she concludes.

IF YOU READ JUST ONE STORY – At the New York Times' The Upshot blog, Claire Cain Miller explores the future of work and the disappearance of the "middle job." One of the reasons the economy is slow getting out of recession, she writes, is because many jobs we never thought could be automated, are. Economic opportunities are increasingly divided between highly skilled jobs (the software developer and the surgeon are two strong examples) and lower-skilled but high human interaction jobs (cutting hair, child care). Anything in the middle, anything that follows strict processes, any job with a bit of a routine, robots can do. And it's not just line assembly, but also bookkeeping, selling, etc. Unsurprisingly, the young and the less educated suffer most. But men too, more than women.

“When you look at data, women who would otherwise be finding middle-paying routine jobs tend to be moving up the job ladder to these higher-paying brain jobs, whereas men are much more likely to just be moving from blue-collar jobs into not finding a job,” said Henry E. Siu (who co-authored a study for the National Bureau of Economic Research.) ... Over the very long run, technological progress is good for everybody, but over shorter time horizons, it’s not that everybody’s a winner,” Mr. Siu said. “Certain demographic groups like the young and less educated in another world would be doing fine, but in today’s world are not.” (Read the full story.)

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Photo: jmorgan and LeWeb/Flickr