Satya Nadella – Microsoft’s saviour?

In a perfect world, Bill Gates would never have left the position of CEO of Microsoft, and would have consistently been directing the software giant’s growth towards the actual needs of consumers. Instead of forcing the Metro interface onto desktop PC users, he might have had given them (as well as laptop users) the option to customize the Start interface to the Windows 7 style, much like how Windows XP allowed you to change the look of Start to the Windows 98 style if the new look was not preferred.

However, bygones are bygones. The above is still simply conjecture – we cannot pin the blame solely on Steve Ballmer for causing Microsoft’s dip. Many argue that the wheels of decline had already begun to turn, and Bill Gates had just decided to step down at an opportune moment. Regardless of what happened, this article is not going to look at Microsoft’s past, but it’s future – Satya Nadella.

A little background on Mr Nadella

Satyanarayana Nadella was born in 1967 in a small village situated in Hyderabad, Andhra Pradesh, India. He attended the Hyderabad Public School from age 3 to 17, a school which has produced notable alumni such as Shantanu Narayen (CEO, Adobe Systems), Harsha Bhogle (one of the best sports journalists and cricket commentator) and Sridhar Tayur ( Ford Distinguished Research Chair and Professor of Operations Management at Carnegie Mellon University; founder, SmartOps and OrganJet).

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Nadella then achieved a bachelor of engineering in electronics and communication degree from the Manipal Institute of Technology, Mangalore University in Karnataka. He then moved to the United States, where he earned an MS in Computer Science from the University of Wisconsin–Milwaukee, as well as an MBA from the University of Chicago Booth School of Business.

Until 1992, he worked with Sun Microsystems (creator of Java), after which he joined Microsoft.

Satya Nadella’s Microsoft journey

After joining Microsoft in 1992, Satya Nadella worked extremely hard, and got consistent promotions. He was on his way to get a master’s degree in business when the Microsoft job offer came. The company was building an operating system that ultimately would be known as Windows NT, and needed team members who understood UNIX and 32-bit operating systems, he says. Nadella wanted to complete his master’s degree and take the Microsoft job. He did both.

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In Microsoft, Nadella quickly rose through the ranks, mainly due to his creative vision and team-work. He became the Senior vice-president of Research and Development for the Online Services Division and vice-president of the Microsoft Business Division (2007-2011). Following this, he was handed the reins of the company’s Server and Tools Business, worth close to US$19 million (S$24.1 million). As President, he brought about a major transformation of the company’s business and technology culture.

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During that time, he is also credited with massively improving Microsoft’s client and cloud infrastructure and services. He helped bring Microsoft’s database, Windows Server and developer tools to its Azure cloud computing platform. After his takeover of the division in 2011, the revenue grew from US$16.6 billion (S$21.1 billion) to US$20.3 billion (S$25.7 billion).

The future of Microsoft

Satya Nadella, now 46, is relatively unknown to those outside Microsoft. Even though the majority of Wall Street was calling for an outsider to take the helm, such as Sundar Pichai, it is better for an internal shepard to take the hot seat.

Sundar Pichai, Senior VP, Google.
Sundar Pichai, Senior VP, Google.

Previous appointments of external executives to top positions have not gone well. Most of those tapped from non-Microsoft posts to take on high-level management jobs at the company in the past couple decades ended up leaving frustrated because they were unable to infiltrate the political (and sometimes, technical) hierarchy. This poor track-record was something the board at Microsoft was certainly wary of, and is one of the many reasons why Nadella was chosen.

Microsoft also announced that on February 4 that Gates, previously Chairman of the Board of Directors, will assume a new role on the Board as Founder and Technology Advisor, and “will devote more time to the company, supporting Nadella in shaping technology and product direction.”  This means that Gates will now be more hands-on with the company’s products once again, which will be another boost for the future of the company.

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In December 2013, when ZDnet spoke with Nadella, he professed to be onboard with the One Microsoft reorganisation that Ballmer had put in place. He seemed to be a firm believer in the need to keep Microsoft intact, maintaining both consumer- and enterprise-centric businesses as part of a mutually reinforcing whole.

Looking at the fact that Microsoft is remaking itself as a devices and services company, it’s not too crazy that Microsoft’s selection committee would choose a “cloud guy” to be the next CEO. It is well known that the majority of Microsoft’s revenues and profits come from enterprise software also make Nadella, who also heads up the company’s enterprise software businesses, a seeming shoo-in.

Many analysts are citing this point when claiming Microsoft is going to rebound back from their dip. Still, critics have been questioning his appointment. As said above, the majority of Wall Street believes that Microsoft needs a fresh perspective, one that only an outsider could provide. They also claim that Nadella’s tenure as CEO could be calamitous, as he has no experience of running a company, let alone one as big as Microsoft. There are also concerns that Steve Ballmer will continue to exert influence over the direction of the company as a board member.

“We do not want to see a continuation of the existing direction for the business, so it will be important that Mr Nadella be free to make changes,” said Nomura analyst Rick Sherlund.

Microsoft’s future

As of now, analysts can say what they want. Speculation can continue unbounded. What will happen with Microsoft is still unknown, but we’d like to hear what you have to say about Satya Nadella’s appointment as Microsoft CEO. Tell us about in the comments!

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