New York: Charismatic Hyderabad born Satya Nadella was named as the CEO of $78 billion tech giant Microsoft on Tuesday. He will replace Steve Ballmer, becoming the third CEO of the world's largest software maker which fueled the PC revolution but is now trying to play catch-up in a market exploding with mobile devices.
The change of guard comes as Microsoft faces gradual erosion in its traditional PC-centric Windows and Office businesses. It is hoping to realize its mobile ambitions with the takeover of Finnish handset maker Nokia. Nadella of course inherits the challenge of integrating Nokia's phone business into the company.
In a message will resound with Indians anywhere in the world, Nadella attributed his meteoric rise in the corporate world to being fixated with India's national pastime.
"I think playing cricket taught me more about working in teams and leadership that has stayed with me throughout my career," Nadella said after he was named CEO of Microsoft.
Satya Nadella (centre) with Bill Gates and Steve Ballmer: Image courtesy Microsoft
Nadella ascends as co-founder Bill Gates returns to a far more central role at Microsoft. Gates is stepping down as chairman, and assuming a new role as Technology Advisor, which will "substantially increase" his time at the company. Gates said he would devote up to a third of his time which is now largely devoted to philanthropic activities to help Nadella craft Microsoft's product strategy as Microsoft tries to tap the booming market for mobile devices.
"His return raises questions as to how free a hand Mr Nadella will have in setting his own strategy as the company responds to an array of business challenges. Mr Gates, while known for his technical expertise, is also linked to past Microsoft product stumbles and has little track record in areas such as smartphones, which are critical to the company's future," noted The Wall Street Journal.
"People who have worked in or around Microsoft generally said it was sensible to put Mr Gates in a role that plays to his strengths as a technologist, but they also wondered whether the company's founder would be able to let other executives' decisions overrule him," added the Journal.
Nadella, who is a 22-year Microsoft veteran and cloud guru, is well suited to the services portion of Microsoft's recent realignment towards "devices and services," but he is not as comfortable with the devices side of the business. Analysts say Nadella will presumably be bolstered by Gates' return to active duty.
Microsoft said Nadella, 47, had asked Gates to step into the advisory role. "I'm thrilled that Satya asked me to step up," Gates said in a video posted Tuesday.
But the Journal reported that people close to the company believe the arrangement was also nudged forward by Gates, who had already stepped up activities at the company since Ballmer announced plans to step down in August. At any rate, Gates won't play a day-to-day management role which will fall squarely on Nadella.
Changing the world through technology
Nadella who joined Microsoft in 1992, earlier headed Microsoft's Cloud and Enterprise group, responsible for building and running the company's computing platforms, developer tools and cloud services. He jumped forward as the front runner as Ballmer's replacement beating out a field of talented external candidates that included Ford Motor's CEO Alan Mulally, Qualcomm CEO-elect Steve Mollenkopf and Ericsson AB CEO Hans Vestberg.
Nadella is the cloud guru within Microsoft and has been very successful over the past few years. In his first letter to Microsoft employees, Nadella who loves poetry and literature, quoted his favorite writer Oscar Wilde saying; "We need to believe in the impossible and remove the improbable".
Nadella who says he is "defined by curiosity and thirst for learning" says he joined Microsoft to "change the world through technology that empowers people to do amazing things." He believes that "over the next decade computing will become even more ubiquitous and intelligence will become ambient" — and that such ubiquity and intelligence will come from the growing power of cloud computing and connected devices.
"He's an enterprise guy," analyst Mark Moerdler, of Bernstein Research told MarketWatch. "The real opportunity for Microsoft is in that they are moving to more cloud and subscription services. And here's a guy who does that."
"There will be more focus on the cloud and subscription story," Moerdler told MarketWatch. "How many cloud vendors are growing by 107 percent? There's only one, and that's Microsoft."
One of the main catalysts behind Microsoft's great second quarter is its cloud services division. When Microsoft reported its fiscal second-quarter results on January 23, 2014 it said its commercial cloud services grew revenue by 107 percent to $609 from a year ago.
Nadella and his old team delivered "Cloud OS", Microsoft's next generation backend platform that not only powers all of Microsoft's Internet scale cloud services (including O365, Bing, SkyDrive, Xbox Live, Skype and Dynamics) but also offers businesses everywhere products that make up the Cloud OS, including Windows Azure, Windows Server, SQL Server, Visual Studio and System Center.
According to Gartner, the market for corporate cloud services will grow 45 percent to $13 billion in 2014 from $9 billion in 2013.
Previously, Nadella was president of Microsoft's $19 billion Server and Tools Business and led the transformation of the business and technology from client-server software to cloud infrastructure and services.
Cricket loving Nadella educated in India
Nadella says that growing up in Hyderabad, cricket was his passion and he took his role in the school cricket team very seriously. Nadella still loves watching Test cricket.
"I love it! There are so many subplots in it, it's like reading a Russian novel," says Nadella.
Nadella has degrees in electrical engineering, computer science and business, covering all the bases to build devices and software services. Nadella earned a bachelor's degree in electrical engineering from India and graduated from Mangalore University and the Manipal Institute of Technology. He also has a master's degree in computer science from the University of Wisconsin, Milwaukee and a master's degree in business administration from the University of Chicago.
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