Tuesday, 04 February 2014 13:44

Why Satya Nadella was a smart CEO choice for Microsoft … to keep things going the way they are.

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Microsoft has a new CEO in the form of (former) executive VP of Microsoft’s Cloud and Enterprise group. The announcement today comes after months of speculation about the replacement for Steve Ballmer. As you might remember Steve Ballmer made an abrupt decision to retire after Windows 8 and 8.1 failed to take off as expected. It was (and still is rumored) that his retirement was not voluntary, but was a response to a number of bumps in Microsoft’s progress since Ballmer took over from Bill Gates. At the time of the decision there was a general hope that Microsoft would turn away from their cloud push and retreat from the devices and services company they so wanted to become. Sadly with the appointment of Nadella it looks like Microsoft’s attempt to become just like Apple will continue.


If you look at Satya Nadell’s history with Microsoft you can see why this is a concern. After all it was Nadella that helped to create Microsoft’s Azure and was responsible for moving Windows Server, SQL and Developer tools into the cloud. He did this while President of Microsoft’s Server and Tools Business. He is credited with championing the push from the client to the cloud. Before that Nadella worked in R&D for Microsoft’s Online Services division as senior VP. In short Nadella’s whole career has been about online services and pushing to the cloud.

This means that the brief hope consumers and some investors had that Microsoft would change their course with a new CEO were in vain. The appointment of Nadella shows that Microsoft’s board approve the direction set by Steve Ballmer and have found the person they feel will continue on this path. Microsoft stocks jumped a little in overnight trading while everyone was waiting on the announcement (from 36.48 to 36.99). However, they were down to a little over yesterday’s closing price (36.62) at the time of this article. Although the drop seems to coincide with Microsoft’s big announcement it is small enough that it might not be related to Nadella’s appointment but just normal variations in trading.

Of course Microsoft cannot sit back and hope this is the case. Since the beginning of the year their stock value has been on a decline. This would seem to indicate that the Redmond based company is losing investor confidence as quickly as they are losing consumer and enterprise confidence. It was probably a mistake to bring in someone that is going to stay the course with the drive to be a devices and services company. The writing is on the wall from consumers and investors. Microsoft needs to change to regain trust from both groups. They cannot go on believing that their current path will lead to eventual success and the return of the consumer (and enterprise) business. The days when Microsoft could run under the “if we build it, they will come” are gone. Sadly a simple return to what they did before is also not the answer as many people are finding they are ok with having devices that only consume media. Microsoft needs to become creative in the way they address the needs of all the verticals they have chosen to support. The “one size fits all” approach of Windows 8/2012 just isn’t going to work.

All we can do now is wait to see if Satya Nadella will stick to the pattern he has followed for his whole career at Microsoft, or maybe (just maybe) he will change and make the needed adjustments to Microsoft’s course (we can always hope).

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Read 2430 times Last modified on Tuesday, 04 February 2014 13:47

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