Edward C. Baig

USA TODAY

NEW YORK—Microsoft was already playing catch-up to Google and Apple by the time it spent $7.2 billion on Nokia’s smartphone business. It has only gotten worse in the two year’s since. A lot worse, given Wednesday's announcement that Microsoft was essentially removing the last of the shrapnel from the ill-fated acquisition.

These are brutal (but only the latest) wounds: an impairment and restructuring charge amounting to some $950 million, of which approximately $200 million will relate to severance payments. Up to 1,850 jobs lost, nearly three of four in Nokia’s Finnish backyard.

Microsoft to slash up to 1,850 jobs

And this comes a week after Microsoft discarded what remained of its budget “feature phone” business.

Painful as it is, Microsoft appears to have a viable strategy moving forward, mostly built around Windows 10 and existing strongholds in the enterprise.Microsoft is not giving up on the mobile phone business entirely, but rather pretty much waving bye-bye to consumer buyers and focusing almost exclusively on commercial customers.

“We’re scaling back, but we’re not out,” Microsoft’s Terry Myerson, executive vice president for the Windows and Devices group, wrote in a memo sent to Microsoft employees.

The strategy attempts to make its popular business productivity tools the go-to service on any mobile device. Microsoft also faces a stiff challenge here. Its consumer focused rivals, such as Apple, have also set their sights on the business customer.

“I wish the Microsoft that bought Nokia devices group 2 years ago were the Microsoft of today, things could have been very different,” tweeted Creative Strategies analyst Carolina Milanesi. Indeed, when Microsoft pulled the trigger on the deal, it hoped that Nokia, once a mobile high-flyer in its own right, could recapture its past glory and help Windows become a viable mobile alternative to iOS and Android.

As it turned out, “that battle was too big for them,” Milanesi said in an interview. “And I think that where (Microsoft is) now, they are much more conscious of their limitations and also more conscious of the power that they have.”

That power resides in the largely well-received Windows 10, which did not yet exist at the time of the Nokia acquisition, but which today is embedded in some 300 million monthly active devices. (Windows 10 is a free upgrade for some users, a promotion that ends July 29.)

In many ways, Microsoft’s current strategy in mobile is a throwback.

In the early part of this century, Microsoft was a factor of sorts with Windows Mobile handsets, and even before so with what were called Pocket PC devices. These were targeted at business users. The problem for Microsoft was there was never a whole lot of stickiness there, and Microsoft couldn’t produce a smash offering or make a compelling case for Windows Mobile for consumers.

As a reviewer I looked at a bunch of them. They were for the most part too cumbersome and too complicated for the average user. The friendlier tile-based interface devices that arrived later, came too little, too late.

By then, of course, Microsoft had faced serious competitive pressures: first from the likes of BlackBerry (itself now a mere shadow of what it once was), and eventually from the iPhone and Android.

Microsoft CEO Steve Ballmer famously dismissed the iPhone in 2007 because of its $500 subsidized price and the fact that it lacked a keyboard. Ballmer figured--wrongly!--that it would in no way appeal to businesses. The Nokia deal that closed in 2014 represented one of Ballmer’s final acts as CEO.

Current CEO Satya Nadella, a cloud and services guy, comes at it differently.

Microsoft’s enterprise-focused phone efforts are partly built around “universal apps,” the idea that an app acquired from the Windows Store will work across the entire Windows 10 spectrum: PCs, tablets, the Xbox, and yes handsets.

The company is also pushing a Windows 10 feature called Continuum that lets you connect a handset to a TV or monitor, employ a keyboard and mouse, and use it as a fully functioning PC.

Microsoft plans to continue to support the Lumia-branded phones that are already out there, including its own Lumia 950 flagship that came out late last year (and which in my review I found to be nothing special) and phones from various Windows partners.

Microsoft's Windows 10 phone is no world beater: review

Microsoft also plans to produce new models as well, pitched again to the commercial segment. The company hasn’t spelled out its distribution plans, but it is evident that it still wants to adapt Windows 10 for smaller screens and form factors.

Even without owning a Windows Phone per se, you'll still likely have plenty of opportunities to engage with Microsoft products and services : through apps such as Office or Skype, via the Cortana voice assistant, through hardware (Surface tablet computers, Xbox videogame console), and eventually through the augmented reality future of HoloLens.

In his memo to employees, Myerson wrote “Our company will be pragmatic and embrace other mobile platforms with our productivity services, device management services, and development tools -- regardless of a person’s phone choice, we want everyone to be able to experience what Microsoft has to offer them.”

Microsoft’s ultimate success will be defined by that—just how many of you, as consumers or as employees in a commercial enterprise, choose to embrace the Windows ecosystem.

Email: ebaig@usatoday.com; Follow USA TODAY Personal Tech Columnist @edbaig on Twitter