What Microsoft’s New CEO Means for the Company’s Future

February 4, 2014
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Microsoft made it official today. Its new CEO is Satya Nadella, a 22 year veteran of the company. He led the firm’s Cloud division to record operating profits of $8 billion on revenues of $22 billion. The board also confirmed Steve Ballmer‘s exit today, something we’ve all known for a while; and the stepping aside of Microsoft founder, Bill Gates, to take on a role of Technology Advisor. Mr Gates is no longer Chairman – that role is now taken on by John W Thompson. MSFT was up 1.4% in premarket activity upon the news being confirmed.

Mr Nadella, born in 1967, is much younger than Ballmer and Gates. Born in Hyderabad, India, he attended the Hyderabad Public School. Hyderabad is located in the southeastern part of the Indian subcontinent and is the capital of the State of Andhra Pradesh. He received his Bachelor’s in Electrical and Electronics Engineering from the Manipal Institute of Technology. He then obtained his MSc in Computer Science from the University of Wisconsin in Milwaukee, and thereafter received his MBA from the Booth School of Business. He is married, and is the father of three children, living in Bellevue, WA.

His time at Microsoft has consisted of stellar performance with his most recent achievement being the structuring of the Windows Azure brand and platform. Azure encapsulates Microsoft’s version of cloud computing and infrastructure that facilitates global access to managing applications and services – providing PaaS (Platform as a Service) and IaaS (Infrastruture as a Service) across multiple programming languages.

The interesting thing about this news is that the change in Microsoft’s leadership also signals a possible change in its focus. Satya proved himself as the head of the Cloud enterprise. He is the person who took Microsoft’s fledgling enterprise system and turned it onto a brand, the Windows Azure, and made $8 billion in profit doing it. It is clear that the board sees real value in cloud computing. Why else would they put a person who does not have any experience in the other areas of MSFT’s business as the CEO? Asides from Azure, some of Microsoft’s other areas of business include Windows, Office, Dynamics, Surface, Xbox, Bing, and Skype, just to name a few.

When Microsoft hired Steve Ballmer, what they were looking for was a manager; and he understood how to organize. When they chose Nadella, two things seem apparent; Microsoft sees someone who can turns things around and they see someone who understands the Enterprise and Cloud computing ecosystem.

While Microsoft looked in-house for a new CEO, it also replaced the iconic Bill Gates with James Thompson as chairman. Bill Gates’ departure, while predicted, is still shocking. It has been Gates’ vision that has propelled the company and replacing him, while keeping him as Technology Advisor, is curious. Are his views of Cloud computing, and the future of technology, competing with the Board’s?

Microsoft’s Board of Directors’ intentions will come clear in the coming days. I feel there will be some realigning of the business units that MSFT has taken on in the last few years. It looks like the technology giant is about to clean house and realign its purpose.

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AJ is a naturalist and economic realist. His articles are based on his study of world events and common sense, not conventional wisdom. He believes technology allows humanity to get past the deficiencies inherent in civilization's inadequate political methods and deficient economic tools. His observations are sometimes radical, sometimes provocative and sometimes misunderstood. But they are effective in evoking a discourse. Ultimately, that is his intention and desire - to stir the pot in search of solutions to today's political and economical challenges.

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