Microsoft announces new CEO: Satya Nadella; Bill Gates becomes Technology Advisor

Microsoft has just announced an end to its official search for a brand new CEO. Frontrunner, Satya Nadella has been chosen for the position and will start his new job immediately.

Nadella is a Microsoft veteran having been with the company for over 20 years. He joined the company back in 1992 after a short run at Sun Microsystems. At Microsoft he has acted as a senior VP for R&D in the company's Online Services Division as well as a VP of the Business Division. Later on he became the president of Microsoft's Server and Tool business, where he transformed Microsoft into a first class player in the Cloud service market. The Cloud Services Division inside the company saw its revenue soar from $16 billion, in 2011 when he took over to $20.3 billion last year.  

Bill Gates, the company's founder commented:

During this time of transformation, there is no better person to lead Microsoft than Satya Nadella, Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth.

 Nadella himself had this to say:

Microsoft is one of those rare companies to have truly revolutionized the world through technology, and I couldn’t be more honored to have been chosen to lead the company. The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform. A big part of my job is to accelerate our ability to bring innovative products to our customers more quickly.” 

Many believe his technical know-how and long-term role inside the company have made him a very good candidate for this position. He is also seen as a safe bet, with no radical restructuring or massive change of direction being planned in the near future. Rather, he will oversee Microsoft's transition to a devices and services company, as well as the close integration of their product portfolio, the "One Microsoft" plan set in motion by ex-CEO Steve Ballmer.

However, there's a big question looming over his appointment as to whether he'll actually be able to lead Microsoft through their current transition and be enough of a visionary to take the company into the new mobile devices age. Critics point to Nadella's inexperience at managing consumer-facing products as well as lack of experience in dealing with investors.

In this regard Bill Gates, the company's founder, has stepped down from Microsoft's board and be much more involved with Nadella and the day to day operations at the company. Gates is now an official Technology Advisor for the company, while his formed role of Chairman has been taken over by John Thompson.

So far Microsoft has been severely lagging in certain markets, such as the mobile devices and services, and it will be up to Nadella to turn this around.  

There will also be a webcast from the company on this announcement at 12:00 PT for more info.

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Glad to hear they went with Satya, seems like an excellent choice to me.
Hope we start to see some cool stuff coming out of 'Redmond again soon!

Euphoria said,
God save them, as this guy is clueless....

rubbing his hands together secretly thinking "MONEY!" lol

Hey Satya, your first mission as CEO is to track J Allard down and give him 2 blank checks.

One check is budget for whatever he needs to create magic again...

And the other is for his salary.

Do this and you win automatically...

He seems to be emphasizing on doing things quicker and more efficient. That would be very welcome and I hope he can pull this off. Good luck Satya

I like that it's an engineer rather than a salesman.

While a good CEO should also be good at "selling" a company, I do think that this could help him avoid visionary mistakes heavily relying on software (the Longhorn project being perhaps the most glaring example) that I think have been made in the past.

I think Bill Gates had a much better grasp on this. What was possible and what wasn't. What had to be released now, and what could and should wait. Timing and reality checks, without derailing a team for years like Ballmer did with Windows Vista. I hope that Nadella will help Microsoft see a return of these days.

2:35mark: Nadella: " I want to remove any obstacles, that allow us to innovate"...

Good luck, with that... Microsoft has been it's own worse enemy during the past 5yrs or so...

Greatly true, MS needs to interoperate a lot more and help each other as the left side often doesn't seem to know what the right side is doing. I hope he can change that.

I think Sinofsky set them back a few years at least, by not allowing the windows group to co operate with the other divisions. Its great to hear Nadella setting the tone on day one.

Showan said,
2:35mark: Nadella: " I want to remove any obstacles, that allow us to innovate"...

Good luck, with that... Microsoft has been it's own worse enemy during the past 5yrs or so...

Which is why he adressed this issue. He seems to understand that Microsoft's greatest enemy is its own internal organization. As a culture they need to start valuing innovation again.

Anyone with a bright idea should be given a team and the freedom to develop their own ideas outside of the standard organizational structure. It's a problem for all large cooperations. Apple used to have a leader that championed innovation and Google is still young at heart. But they'll come to face the same issues Microsoft needs to overcome today. Basically they have to become the India of the technology industry.

I sure hope he leaves a better legacy than Ballmer. Definitely a positive that it's someone who has proven themselves inside Microsoft.

stevan said,
I sure hope he leaves a better legacy than Ballmer. Definitely a positive that it's someone who has proven themselves inside Microsoft.
What so bad about Ballmer?

How much money did Microsoft lose under Ballmer? NONE. Did he make bad business decisions? Sure...they all do. Gates made plenty bad ones. It sorta comes with the job. But those few bad decisions only cost them some time and some money.

The only bad move Ballmer made, was the slow adoption of the mobile frontier. Like RIM and others have done, they sat on their laurels with Window Mobile and didn;t evolve the platform in a market they once dominated. When RIM pulled the rug from under them, Microsoft should have went nuclear to stay relevant. They didn't and they allowed Apple and Google to almost run them totally out the market.

But if you look at history, Microsoft has always been their best when fighting from behind. But as you see other company's are resting on their laurels too. Apple for one.

For anyone to focus on any one bad move by a CEO is lame. he did way more good than bad and more than made up for bad moves. Windows 7 was awesome. Office 2014 is awesome. Pushing new services like SharePoint/Lync/SkyDrive/Office365 and more are all good things. Xbox One is also awesome and there is more. Windows Phone? I personally liked some things about it, but dropping native features like syncing to Outlook was terrible. Again, Windows Phone 7 was a rush to get back in because if MS had waited another year, they likely wouldnt not have made it back into the market. That was a good decision by Ballmer to take the risk and it has paid off.

Its a good thing we don't depend on people who come here and complain about nothing, to be in a position to run a company. It would surely crash and burn. You think Bill Gates focuses on things Ballmer did wrong? I highly doubt it. After all, Gates still ran the company via the board. So if it was actually that bad, he would have forced a push in the right direction. After all, it is HIS company. NOT YOURS...thank God!

Hi_XPecTa_Chens said,
What so bad about Ballmer?

How much money did Microsoft lose under Ballmer? NONE. Did he make bad business decisions? Sure...they all do. Gates made plenty bad ones. It sorta comes with the job. But those few bad decisions only cost them some time and some money.

The only bad move Ballmer made, was the slow adoption of the mobile frontier. Like RIM and others have done, they sat on their laurels with Window Mobile and didn;t evolve the platform in a market they once dominated. When RIM pulled the rug from under them, Microsoft should have went nuclear to stay relevant. They didn't and they allowed Apple and Google to almost run them totally out the market.

But if you look at history, Microsoft has always been their best when fighting from behind. But as you see other company's are resting on their laurels too. Apple for one.

For anyone to focus on any one bad move by a CEO is lame. he did way more good than bad and more than made up for bad moves. Windows 7 was awesome. Office 2014 is awesome. Pushing new services like SharePoint/Lync/SkyDrive/Office365 and more are all good things. Xbox One is also awesome and there is more. Windows Phone? I personally liked some things about it, but dropping native features like syncing to Outlook was terrible. Again, Windows Phone 7 was a rush to get back in because if MS had waited another year, they likely wouldnt not have made it back into the market. That was a good decision by Ballmer to take the risk and it has paid off.

Its a good thing we don't depend on people who come here and complain about nothing, to be in a position to run a company. It would surely crash and burn. You think Bill Gates focuses on things Ballmer did wrong? I highly doubt it. After all, Gates still ran the company via the board. So if it was actually that bad, he would have forced a push in the right direction. After all, it is HIS company. NOT YOURS...thank God!

The only bad decision Ballmer did cost him his job. No way of sugar coating this, he ****ed up badly in a couple areas and it cost him the CEO job.

Hi_XPecTa_Chens said,

How much money did Microsoft lose under Ballmer? NONE.

That's the thing. He didn't technically "lose" any money, but as a CEO you need to have the vision to take the company to where the biggest opportunities intersect with the mission of the company. Microsoft missed a LOT of opportunity in being first in mobile, but fortunately they've been doing very well in enterprise.

Hopefully the new guy will see the importance of both enterprise and consumer markets and guide Microsoft to some smarter decisions. Imagine if it was Microsoft that introduced the equivalent of the iPhone back in 2006.

Hi_XPecTa_Chens said,
What so bad about Ballmer?

The problem isn't so much what he did but what he didn't do - the criticisms orientate around the future direction rather than the current direction. They're making great profits now but there is concern that the business isn't orientated in the right direction given the changing nature of the marketplace. I do think Microsoft have answers but their lack of communication isn't helping the situation - if the long term vision is to kill off Windows Phone 8 in favour of a rebranded Windows RT so that the full WinRT stack is present on all devices then that is awesome but if you don't tell anyone about it then what do you think is going to happen? you're going to end up with endless speculation that ends up undermining the whole project right from the outset.

stevan said,

The only bad decision Ballmer did cost him his job. No way of sugar coating this, he ****ed up badly in a couple areas and it cost him the CEO job.

It did not cost him his job. The Board wanted Ballmer gone years ago. Gates is likely the reason he remain. No one on the board but Gates ever like Ballmer. To bad so sad, that doesn't make you a bad person because people don't like you.

What matters is every single year Microsoft made tons of money.
Let me give you an example. Everyone seemed to have loathe Windows Vista. The reality of fact is, the problem with Vista was the OEM's didn't like that Microsoft tried to totally strip out support for legacy devices and they refused to support it with proper drivers. But not only did they hurt Microsoft, they lost a lot of money when people refused to buy brand new equipment when they could have easily simply made software to work with Vista. Windows 7 was a success, not because Microsoft put legacy support back, but because the OEM's played the game after having the most terrible year of PC sales since Windows ME. Windows can't have any success without OEM's and the OEM can't have any success without Windows. But here is the funny part, Microsoft still sold over 500M copies of Windows Vista and they still made their money and they did not suffer any loses, while OEM's suffer loses in sales of mostly extra hardware like scanners and printers and more. PC sales were still OK, but OEM must make money past PC sales and they simply did not. That is fact!

Windows 8 wasn't a bad move. The problem with Windows 8 is you can't teach an old dog new tricks. In this case, its again consumers and poor support by OEM's who didn't like it. Funny how Lenovo and Asus were the only OEM who didn't see significant loses in PC sales and even Dell saw better sales than ALL the other OEM's. What did they do right? They actually support Windows 8 with hardware and devices while all the other OEM's did not.

Ballmer did nothing wrong per se. What he did do is simply move to slow. While he was laughing at the concept of iPhone and Apple putting a full OS on a smartphone, hey should have been seeing how to do the same thing and compete. Instead of competing he scuffed and now look, they ended up doing the same.

Microsoft has always been a software giant. Hardware has never been their forte. But that doesn't mean they are totally in the dark. They have the world best R&D department and todays devices use many patents that Microsoft themselves created but have simply failed to use. Licensing them out and letting others beat u with it is sad. That is what they as a company did wrong. Gates too has admitted that HE and HIS company missed the ball on the opening bell of the smartphone boon. But late is still better than never.

Microsoft has one thing that no other company has and that is why they aren't ever going anywhere. There is no other company like them. They are so entrenched in society that they can make serious mistakes and recover. Company's like Apple can't.

They must be doing something right, because Coka Cola and Intel are the only other companies on this planet outside of Exxon who continuously make profits from the product that got them started in this business.

Ballmer was simply old and it was time to move on to the next phase of change. All companies do it. He didn't get fired. Yes the board basically pushed him out the door. But here is something that wont change. Microsoft stop will still fluctuate between 19 and 30 per share thanks to several stock splits, and no matter who they make CEO some thinsg aren't going to ever change as long as Gates is alive.

Also, you think it is a coincidence Gates left the board to work with this new guy? If they had so much faith in this new guy, Gates should have had to leave his lofthy throne to help advise this guy. Funny, Ballmer basically ran the company all by himself.

Every time a CEO doesn't want to go the direction the board says they want them too, they always want tem out the door. Did it not happen to Jobs? What about HP's CEO? What about Intel's CEO? Need me to name more?

For each stage of a company's life cycle a different CEO is needed. Ballmer was the perfect CEO when the market was quiet. They needed someone who could create value for shareholders based on existing products. But Ballmer should have realized sooner that the market wasn't quiet anymore.

Now they need someone who values innovation. Someone who would have nurtured Windows Mobile and would have invested in Windows tablets back in the 90's. Stuff that doesn't directly create value for shareholders. I'm sure that the shareholders will come to hate Satya more than Ballmer. At least in the first few years.

Sometimes outsiders is what a company needs to shake things up and move in a different/better direction. Not saying that is what MS needs, but that an outsider is not always a bad thing.

techbeck said,
Sometimes outsiders is what a company needs to shake things up and move in a different/better direction. Not saying that is what MS needs, but that an outsider is not always a bad thing.

I guess MS decided it didn't actually need to take that kind of chance with and outsider. Congratulation to Satya

techbeck said,
Sometimes outsiders is what a company needs to shake things up and move in a different/better direction. Not saying that is what MS needs, but that an outsider is not always a bad thing.
Yea because that worked out so great for company's like HP? They hired a politician as a CEO. Where did it get them?

Hi_XPecTa_Chens said,
Yea because that worked out so great for company's like HP? They hired a politician as a CEO. Where did it get them?

I said SOMETIMES its a good thing. I never said this would work every place and that they should do this at MS. J

techbeck said,

I said SOMETIMES its a good thing. I never said this would work every place and that they should do this at MS. J

I can't think of any time it has worked. Go back in time. Apple - Steve Jobs hired Skully from Pepisco. How did that go? The company was almost lost. HP? I forgot her name the politician, but she ended up firing more employees and the other changes almost pulled HP off the list of top PC maker. She did nothing with the acquisition of Palm/Web OS. They havent even dopted making an Windows Phones when HP is stilll the top PC sold to businesses which has kept them slightly ahead of Dell for the past 2 decades.

Here is why I disagree, though I am not saying you are completely wrong. Yes a person from anoher company may have a somewhat better vision, but if they are use to selling one product, that vision may not work in a totally different field. Business is business, but to deal with a totally new product you ahve no experience with is not good.

Hiring from the inside is better because A - the person is 100% familiar with your brand. B - They dont have to build a relationship from scratch. The big positive of this is, you are working with people who already know you as oppose to some outside which they look at as some jerk from the outside who has to prove him/herself.

C - Experience - Even if the person you hire came from the same industry, 2 company's simply cant work on the same premise. Microsoft works from a very different strategy vs a company like Apple. You need someone who understand this and can work with it. Someone who yes can bring new ideas, but new ideas that improve them, not make a radical change.

When MS made radical changes, they run into too many issues. Look what happened with Windows Phone 7, Windows Vista and Windows 8. The changes were to sudden vs a gradual adaptation. You cant do this when you have a very finicky market of consumers who seem to not like radical changes in YOUR products.

A company with huge positives can't afford to waste a couple years of trying to bring some new guy up to speed.

Hi_XPecTa_Chens said,
Yea because that worked out so great for company's like HP? They hired a politician as a CEO. Where did it get them?
With a share price thats now half respectable... and a CEO who doesn't end up in the papers for the wrong reasons...
Lets not forget she was CEO of EBay before going into politics...not exactly a new to the world of tech...

techbeck said,
Sometimes outsiders is what a company needs to shake things up and move in a different/better direction. Not saying that is what MS needs, but that an outsider is not always a bad thing.

Yes, I agree... but what does MS do? They appoint a puppet that Bill Gates will control... someone that has been involved in the whole bureaucracy of MS for the last 20 years and has actually flourished because of that bureaucracy.
He will not change a single thing... if nothing else he will tank the company even more...
A sad day for MS.

philcruicks said,
With a share price thats now half respectable... and a CEO who doesn't end up in the papers for the wrong reasons...
Lets not forget she was CEO of EBay before going into politics...not exactly a new to the world of tech...
Ebay isn't even in the same league as HP. Nor is it even the same type of business. Ebay was built on a business structure where they will always make money. They don't sell anything. They made a place for you to sell stuff and they make money by providing a way for you to buy and sell and have the transactin protected. As long as people sell product they make money. But they dont own or sell the product themselves.

Far different from you have a product you must spend money to design, spend money to sell and spend money to call yours.

I could easily run eBay. I certainly could not run HP.

I didn't say being CEO of eBay was like HP, HP is of course a lot harder to run and she's doing a good job,
My point was that she's not a politician, she's a CEO who decided to try politics, not the other way around.

TAKEITBILL said,
Great

wont be a big change to MS even after CEO changes. So MS will go cloud all the way.

Cloud and mobility focused. I think it's the right thing not to change things to dramatically. They've made their choices to also get into the devices market and they need to stick with it now. But this might be a better guy to be the inspirational leader to change the mindset at Microsoft. He also earned his stripes within the company, which is important.

I say mobility because I think tha't will be just as important as cloud computing. Considering the low margins on devices I think software and hardware have to merge and profit needs to be made on the total package. Many OEMs will disappear as te market becomes even less lucrative.

I think this from the article answers your question.

In this regards Bill Gates, the company's co-founder, has step down from Microsoft's board and be much more involved with Nadella and the day to day operations at the company. Gates is now an official Technology Advisor for the company, while his formed role of Chairman has been taken over by John Thompson.

Edited by primortal, Feb 4 2014, 2:23pm :