A concept for Microsoft's HoloLens. Microsoft Microsoft is revamping its Microsoft Research arm, where the company comes up with its coolest, most futuristic ideas — including the HoloLens holographic headset — to make sure its best concepts leave the lab and enter into real-life products much sooner, Bloomberg reports.

It's a vital change, as the company looks to use Microsoft Research tech to stay ahead of fast moving companies like Google and Facebook.

Historically, Microsoft Research sometimes came up with cool ideas before anyone else, only to let competitors take the concepts and run with them. In 2001, for example, Microsoft demonstrated a voice transcription gadget called the MiPad (seriously) that never hit the market.

Fast forward to February 2014, Nadella's first month as CEO. Microsoft Research demonstrated an early version of a product that could do real time language translation.

He immediately saw the potential of the feature, and issued an executive mandate for Microsoft Research to get it fully operational and integrated with Skype within three months, so he could present it at a public appearance in May.

Satya Nadella and Chile Youthspark winner Belen Guede Microsoft

Given how slowly Microsoft Research technology previously found its way in to products, this was a big thing to ask. But Nadella cracked the whip, a team was put into place, and Microsoft Research made its deadline.

More generally, Nadella and his leadership team are shifting how it treats Microsoft Research.

Somewhere around 500 of Microsoft's 1,000-strong research employees got reassigned to a new unit called MSR Next in late 2014, Bloomberg reports, with a mandate to figure out how to get its most cutting-edge tech ready for actual products.

Meanwhile, Microsoft Research itself is feeling more pressure to take ideas from laboratory to the real world.

It seems to be bearing some fruit: Cortana, the personal digital assistant, is getting smarter all the time thanks to language and data processing capabilities from Microsoft Research. The Bing search engine is improving. The HoloLens holographic goggles are getting closer to reality.

And Microsoft is working hard to put Microsoft Research front and center, even letting top science-fiction authors into its laboratories and writing a pretty great book about them.