Snapshot: From Hyderabad to Here: Satya Nadella's Next Mission

Microsoft’s new CEO has a laundry list of tasks to address and questions to answer

It has taken Microsoft almost a year to appoint Steve Ballmer’s replacement as Satya Nadella becomes only the third CEO of this mighty, contentious US behemoth. Here are some thoughts on the announcement and the road ahead…

A Tough Gig. The very long gestation period between Ballmer last August saying he would step down and the appointment of Nadella, an insider after all, points to the fact that this will be a very, very difficult job. Of course, as Pivotal CEO Paul Maritz, another person linked with the role, has said, “all these jobs are very hard.” But Ballmer inherited a company that ran on oiled wheels when the backbones of what you might call the Wintel Economy – beige PCs, Windows, Office, command-and-control CIOs, client/server – were intact. Today, the Internet Economy – multiple device formats and architectures, browser access, BYOD and cloud – make Microsoft look like the IBM of 25 years ago. The goalposts have moved over the last 10 years and the challenge for the new Microsoft CEO is to reinvent the company to make it relevant to this world, much as Lou Gerstner did at IBM and Steve Jobs second time around at Apple. But dramatic revivals starred in by heroic leads are less common than flops.

Where to Begin? The other pointer from the long search Microsoft undertook was that this was a job that many seemed to shy away from, for all sorts of reasons. The laundry list of tasks is forbidding and Nadella appears suited for some but by no means all of these. The plain-as-pikestaff challenges of addressing cloud strategy and making sense of the mulligatawny that has been Microsoft’s mobile offering will very likely have been reasons for his appointment, given his deep online services expertise. Other tasks, such as developing a coherent mergers and acquisitions plan, becoming the leadership figure saluted by staff and outsiders including Wall Street stock watchers, and running a hugely complex and quite diverse company would surely have been reasons for the reported courtships of the likes of Ford CEO Alan Mulally and others.

Stick or Twist? If Clayton Christensen ever adds a chapter to his book The Innovator’s Dilemma it should cover Microsoft right now. Should the company bet big on growing aspects of IT like cloud, social networks, iOS, mobile and so on? Or does common sense and fiduciary duty dictate that it protects some of the greatest franchises in business history: Windows and Office, together with a hugely powerful partner ecosystem? It also has strong businesses in other segments, from entertainment to ERP, that could be significant companies in their own right if split off. Where do all these companies belong? Together or separately? Which to stay and which go? How much does Microsoft spend on R&D? In what areas? Should it copy Oracle and IBM and become a serial acquirer? As the song goes, and until Nadella provides responses, there are more questions than answers.

Good Luck With That… It’s easy to overdramatise the situation at Microsoft but it’s likely that Nadella’s tenure will be written about at business schools for decades to come. And there is a certain cinematic aspect to his task as this Hyderebad-born, cricket-loving, poetry-reading veteran of the company takes over one of America’s most famous, and equally feted and disliked, brands. Microsoft, for all the criticisms of its perceived overly aggressive tactics and embrace-and-extend culture, is a great company passing through winds of change. In some ways, Nadella might appear a fish out of water for the job but then nobody could match the perfect photo-fit of a CEO for the company and nobody would agree on what that picture looked like.  Nadella will be under pressure to start fast, coming up with a grand plan and proof he has the personality to take people along with him, even doubters. He will need to be brave… and perhaps lucky too.


Martin Veitch is Editorial Director at IDG Connect