On the other hand, they must think its portfolio is a rather stable set of solutions, while the bulk of innovation is moving towards kubernetes like solutions.

They are considering to transform the business model more like oracle, sap, cisco, where the core business is sales not innovation. Their plan is probably that they have such a strong position in the market that talents are not needed, just average people who can patch out stuff somehow.

I have too much technical experience to agree with them thwthis is a good call. I believe it will be a disaster on the long run. But their background is clearly different, and they saw on the market a huge amount of successful companies which such business model. First among all pre-nadella Microsoft.