February 2014 will be a historic month in the history of Microsoft. Satya Nadella became the third CEO of the Redmond based company succeeding Steve Ballmer. Nadella is going to have his hands full as he needs to reposition Microsoft to a software company that is less reliant on enterprise software and more focused on consumer based software (hello Office on an iPad). Nadella becomes CEO at a time in which Microsoft is fighting for its life and future. Steve Ballmer put the brakes on innovation and growth by focusing on a Tablet that failed to live to expectations and ultimately bought Nokia to support their mobile offering.
Since joining the company in 1992, Nadella has spearheaded major strategy and technical shifts across the company’s portfolio of products and services, most notably the company’s move to the cloud and the development of one of the largest cloud infrastructures in the world supporting Bing, Xbox, Office and other services. During his tenure overseeing Microsoft’s Server and Tools Business, the division outperformed the market and took share from competitors.
There is a lot to like about this appointment – one, Satya Nadella has been with the company for over 20 years so he has firsthand experience of a time in which Microsoft was dominant (early 90’s) and also the time where Microsoft lost their direction (early 2000’s to early 2014). He is a developer with engineering skills so he will be able to rally his staff to turn Microsoft into a company where people want to work. Nadella also has an understanding of the cloud which could lead to more focus on that part of Microsoft’s business.
Nadella’s appointment also has deeper implications at Microsoft. Bill Gates, has stepped away from being chairman of the company to a newly created role “Founder and Technology Advisor”. John Thompson, lead independent director for the Board of Directors, will assume the role of Chairman of the Board of Directors and remain an independent director on the Board. Gates is going to be spending more time at Microsoft which is something that investors have been asking for a long time. One wonders whether Nadella asked that Gates move away from being Chairman of the Microsoft Board.
Nadella has some weaknesses or potential blind spots – he has no mobile experience in terms of leading a large software business. He has yet to make a decision on the future of Microsoft’s retail shops and also the future of the Xbox.
