Microsoft is a company that’s expanding beyond the software industry at full speed and it’s all happening under the guidance of Satya Nadella, the third CEO in the history of the company after Bill Gates and Steve Ballmer.

And in an interview today, Nadella has more or less suggested that his predecessor pushed Microsoft towards an approach that proved to be wrong, as it put the PC at the core of everything in a continuously-evolving world where customers are looking for full portability and permanent connection to their services.

Nadella’s strategy for the software firm is specifically focused on a mobile first, cloud first world, and although the PC is playing an essential role, it’s not the one that’s number one anymore. Instead, Microsoft is betting big on a wider array of devices, including 2-in-1s, gaming consoles, and HoloLens, but also on services and cloud.

As a result, going all-in on the PC wasn’t the right thing to do for Microsoft, and Nadella says that this was one of the lessons the company learned the hard way.

“Our goal now is to make sure we grow new categories. The lesson learned for us, was thinking of PC as the hub for all things for all time to come. It was perhaps one for the bigger mistakes we made,” he said at Wall Street Journal Live.

Creating categories is the thing that Microsoft has managed to do starting with the Surface tablet, which invented the 2-in-1 device, a concept that was originally criticized by many, but then adopted by pretty much everyone. Apple, for example, criticized this approach and said that putting a keyboard on a tablet is just like mixing a toaster and a refrigerator, but Cupertino ended up releasing the iPad Pro, an iOS-powered tablet that comes with a detachable keyboard.

Inventing new product categories

And with Nadella at the helm of the company, Microsoft is set to continue inventing new product categories, with HoloLens now in pole-position to achieve this goal.

This doesn’t mean that Microsoft will give up on its identity, Nadella explained, and the brand will continue to evolve based on the same ideas as before.

“The bar of consumer products in particular is such that if you don’t stand up to it - and not just once but continuously - you will get punished for it. To me, the Microsoft brand has always stood for being the company that has got a bit of a utilitarian bend to it, which I think is a good one. That’s who we are - we are the company that stands for builders, makers, and creators. That’s the brand that we want,” he said.

But although the PC market has indeed lost ground in the last decade as customers migrated to tablets and smartphones, Microsoft isn’t ready to abandon it just yet and hopes to reignite demand with its very own All-in-One PC. The company will take the wraps off a new Surface device at an event on Wednesday, helping it expand the Surface lineup and become a rival to Apple’s iMac.