Reflecting on Microsoft’s choice of Satya Nadella as new CEO

Microsoft has announced it’s new CEO at last: Satya Nadella, formerly in charge of Cloud and Enterprise (in other words, the server part of Microsoft’s business).

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The press release also states that co-founder and former CEO Bill Gates will be a little more active:

Microsoft also announced that Bill 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.

Microsoft is a curious company, perceived as failing due to the rapid decline in PC sales and failure to break through in mobile devices, yet announcing record revenue. What is significant about this appointment?

First, it is internal. That means the board decided that the risk of appointing an outsider who might shake up the company and change its focus was too great. I am inclined to agree.

Second, Microsoft is replacing a marketing guy (Ballmer) with a technical guy. “The best code is poetry,” he says in his bio. This also is a smart move. The key influencers in the IT industry – developers, IT admins, geeks – relate best to executives who also have a technical background.

Third, it is building on success. Microsoft has struggled with Windows client and devices, but has charged ahead in server and is progressing fast in cloud, both Azure and Office 365. That is in part a credit to Nadella.

I have met Nadella on several occasions; he is less shouty than Ballmer and will likely come over better in most public appearances. I had an opportunity to put a few questions at the launch of Visual Studio 2012, shortly before the release of Windows 8, and wrote this up for the Register. I asked him, “Is Windows so much weighed down by legacy and the need to support existing applications that Microsoft cannot advance its platform?” His answers demonstrate a clear understanding of the legacy problem that still entraps Microsoft: too much change, and you lose the confidence of existing users; too little change, and your platform races towards irrelevance.

Nadella’s appointment may be perceived as cautious, on the grounds that as an insider he is less likely to introduce a radical chance of direction. There is much nonsense talked about Microsoft though, and critics can be self-contradictory, seeing changes made to Windows as negative while at the same time stating that Microsoft has done too little to keep pace with Apple and Google in devices. The Ballmer and Sinofsky era was more one of too much change than too little, and the challenge now is make those changes work, rather than to tip them out and start again, so a certain amount of caution is no bad thing.

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