In a stunning move, Microsoft this past weekend came to a "cooperation agreement" with the activist investors at ValueAct, agreed to place the firm's president on the Microsoft board of directors in 2014, and will meet regularly with him in the interim. Neither side is saying, but it appears that ValueAct's recent purchases of Microsoft stock might also have played a role in CEO Steve Ballmer's departure from Microsoft. But this strange partnership augurs a potential change in strategy at the software behemoth regardless.

"[Microsoft] has agreed ... to appoint [ValueAct President G. Mason] Morfit to the Company's Board of Directors," a filing with the US Securities and Exchange Commission reads, noting that this appointment will occur by mid-2014. "Effective immediately, the Agreement provides for regular meetings between Mr. Morfit and selected Company directors and management to discuss a range of significant business issues."

As noted in the filing, Microsoft reached this bizarre agreement to avert a proxy battle by the activist investors at ValueAct. The latter firm has been buying up Microsoft stock this year and now owns a bit under 1 percent of all Microsoft stock. ValueAct buys stock in this fashion for one reason: to force the firm to follow a strategy that is accountable to shareholders and follow only those product strategies that make the most sense.

Looked at through the Microsoft lens, it's pretty clear what the goal is: to thoroughly evaluate the many often-unprofitable businesses that Microsoft has sunk billions of dollars into and help forge a better strategy going forward. Theories abound that ValueAct played a role in Ballmer's exit, although he denies that. But it's not hard to pinpoint the failures—Bing, Xbox, online advertising, and Surface, in descending order of absolute money lost—and wonder whether they're now on the chopping block. Selling or splitting off a business like Xbox, for example, could result in a windfall for shareholders and free Microsoft from a financial albatross.

ValueAct's sudden spearhead into Microsoft's boardroom doesn't mean that the software company will suddenly drop its "devices and services" mantra, though it's notable that its biggest money losers all fall within those two categories. In fact, the firm might simply push Microsoft to release more money to shareholders in ways unrelated to technology strategy. But ValueAct typically takes a long-term view with the firms in which it gets involved. And Microsoft's long-term successes are currently tied to controversial new businesses.

"Our board and management team are committed to enhancing growth and value for Microsoft shareholders, and we look forward to ValueAct Capital's input," a statement attributed to Mr. Ballmer reads. And if that doesn't sound like a capitulation, then you're not a student of history. This once-belligerent destroyer of markets is so internally wounded that it has bowed before an invader that owns about .8 percent—point 8, not 8 percent—of its stock.

Incredible.