This paper aims to examine how legacy technology firms can achieve strategic renewal through integrative capability reconfiguration rather than structural separation. Using Microsoft’s decade-long transformation under Satya Nadella (2014–2024), the study addresses the theoretical gap in understanding alternative pathways for managing exploration-exploitation tensions beyond structural ambidexterity.
Using a longitudinal case study design, the analysis examines Microsoft’s transformation through 54 triangulated sources, using a process-tracing methodology. Data analysis generated 60 first-order codes organized into 13 second-order themes, with 27 direct quotes from primary sources providing empirical grounding across three transformation phases.
Microsoft achieved strategic renewal by rebuilding dynamic capabilities, seizing and transforming opportunities within a unified organizational architecture. The transformation involved cognitive reframing and ecosystem intelligence (sensing), platform orchestration and strategic commitment (seizing) and cultural architecture reconstruction (transforming). Cultural transformation served as a causal mechanism that enabled all three capabilities, while platform logic provided architectural coherence, thereby reducing exploration-exploitation tensions without necessitating structural separation.
This study makes three theoretical contributions. First, it demonstrates “integrative ambidexterity” as a third pathway beyond temporal and structural approaches, challenging structural determinism. Second, it repositions cultural transformation from a contextual factor to a causal mechanism in the development of capabilities. Third, it conceptualizes platform orchestration as a distinct dynamic capability that bridges the platform economics and capability development literature. The platform-oriented dynamic renewal model offers an alternative to divestiture strategies for transforming legacy firms into digital ecosystems.
