IMHO that was the most intriguing question raised after Satya Nadella’s appointment as the new CEO of Microsoft. This was also the only question mark hanging over this decision from the future of Microsoft point of view. In other regards there was just only one serious warning (IMHO again): Kedrosky [Bloomberg] to Microsoft: Stop Killing Partners (see embedded below). Otherwise the unanonimous opinion was that Satya Nadella as CEO and John Thompson as chair, with Bill Gates now going to be involved at the product level and Steve Ballmer just taking a seat on the board (both even compensated by an upcoming in March new director on the board, G. Mason Morfit from ValueAct Capital, representing the activist shareholders advocating break-up/spin-off moves), as the new top-level setup is indeed not only the best but the only possible thing for the huge and complacent software company (note that Nadella is not referring to Ballmer’s “devices and services” mantra, it’s gone).
Inherent to this companion post: John W. Thompson, Chairman of the Board of Microsoft: the least recognized person in the radical two-men shakeup of the uppermost leadership [‘Experiencing the Cloud’, Feb 6, 2014]. Without reading that misunderstandings like Nadella, Gates: Right Team For Microsoft? [InformationWeek, Feb 6, 2014] will be rampant, despite the reality that everybody should talk about the Nadella-Thompson combo as the uppermost leadership. Keep in mind also that out of the current 10 directors on the board (with Morfit 11) of Microsoft 8 (with Morfit 9) are independent directors (i.e. representing the vast majority independent shareholders), and only Gates and Ballmer are remaining as non-independent ones, representing their joint, somewhat more than 8% stake in Microsoft plus that of existing and the still loyal ex-softies (if any). So both of them could quite easily be outvoted … etc.
The upcoming new director, Morfit will specifically (“actively”) advocate the reduction of focus on Windows and the acceleration of efforts to unchain products and services from the operating system. In fact he had an agreement for regular meetings with “selected directors and management to discuss a range of significant business issues” back in August 30, 2013. Note also that he will join the board in March which is actually the time when the next fiscal year plan is presented and approved by the board. This is within the full fiscal year planning process, mainly consisting of the so called MYR (MidYear Review), PRISM (PRIority Setting Meeting), and WWSMM (WorldWide Sales & Marketing Memo) phases. Note as well that for the new CEO appointment this date was the very last one, as the PRISM, preceding the board approval, should be headed by the next fiscal year CEO.
Key words and phrases describing the essence of this post:
|Microsoft complacency||Satya Nadella as CEO||John Thompson as chair|
|Bill Gates as technical advisor||Microsoft break-up||Microsoft spin-offs|
|Stop Killing Partners||consumer and business computing||Microsoft enterprise business|
|Microsoft consumer business||Microsoft as “mobile-first, cloud-first” company||the notion of the modern enterprise|
|removing obstacles to innovate||Gates as a product person||new activist director on the board of Microsoft|
|thriving in a mobile and cloud-first world||zero in on unique contributions||set of high-value activities|
|empowering users and organizations to “do more” as Microsoft’s core value||product innovation not compartementalized by consumer and business|
Just a fragment of that interview:
[2:26] STEVE CLAYTON: And as you step into this role, what do you see as your primary focus? What are you going to be really focused on?
SATYA NADELLA: I would say first thing I want to do and focus on is ruthlessly removing any obstacles that allow us to innovate, every individual in our organization to innovate, and then focus all of that innovation on things that Microsoft can uniquely do. We are the company that enables people to do more, to play, have more fun, to create more. So in some sense we refer to ourselves as the do more company, and I want us to be able to take that focus and innovation forward.
And lastly, I want every one of us to find more meaning at work. We spend far too much time at work for it not to have deep meaning.
STEVE CLAYTON: You talked about this focus on innovation. Where do you see the opportunities lie for Microsoft?
SATYA NADELLA: Going forward it’s a mobile first, cloud first world. In other words, everything is becoming digital and software-driven. And so I think of the opportunities being unbounded. And we need to be able to pick the unique contribution that we want to bring.
And that’s where our heritage of being the productivity company to now being the do-more company where we get every individual at every organization to get more out of every moment of their life is what we want to get focused on. [4:06]
– Highly recommended Susan Hauser [CVP, EPG Group of Microsoft] interviews Microsoft CEO Satya Nadella [Microsoft, Feb 4, 2014; published on Microsoft Youtube channel, Feb 5, 2014]: [Microsoft, Feb 4, 2014: “Satya Nadella is a strong advocate for customers and partners, and a proven leader with strong technical and engineering expertise. Nadella addressed customers and partners for the first time as CEO during a Customer and Partner Webcast event.”]
[Contributor Profile: Susan Hauser, Corporate Vice President,
Enterprise and Partner Group, Microsoft]
As a teaser Q: [6:43] How do you think about consumer and business, and how do you see them benefiting each other?
A: You know, one of the things that when we think about our product innovation, we necessarily don’t compartementalize by consumer and business, we think about the user. In many of these cases, what needs to happen is experiences. That’s for sure have to have a strong notion of identity and security, so I.T. control, where it’s needed, still matters a lot, and that’s something that, again, we will uniquely bring to market. But it starts with the user. The user obviously is going to have a life at home and a life at work. So how do we bridge that as there more and more of what they do is digitally mediated? I want to be able to connect with my friends and family. I also want to be able to participate in the social network at work, and I don’t want the two things to be confused, but I don’t want to pick three different tools for doing the one thing I want to do seamlessly across my work and life. That’s what we are centered on. When we think about what we are doing in communications, what we are doing in productivity or social communications, those are all the places where we really want to bridge the consumer and business market, because that’s how we believe end-users actually work. [8:01]
– Microsoft Names Nadella CEO: New Era or New Error? [BARRON’S, Feb 4, 2014]
– Facebook or Microsoft: Whose Dominance [i.e. Monopoly] Will Last Longer? [The New Yorker, Feb 4, 2014]
– Microsoft breakup talk starts [IOL, Feb 4, 2014]: “Jettisoning units such as Xbox video-game consoles and the Bing search engine … should go further by also splitting off Windows and smartphones to focus on providing services to business customers … Eighty percent of the value of Microsoft is on the enterprise side and it’s not being valued that way today. The consumer side of the business gets a disproportionate amount of attention. … Shareholders may find an insider advocate in Mason Morfit, the president of activist investing firm ValueAct Holdings LP. Morfit, who’s set to join Microsoft’s board in March, wants the company to reduce its focus on Windows and accelerate efforts to unchain products and services from the operating system”
– Top 5 items on new Microsoft chief’s to-do list [Associated Press, Feb 5, 2014]: “ … some of the most pressing items on Nadella’s to-do list as he reshapes Microsoft into a “mobile-first, cloud-first” company: Integrate Nokia’s mobile device business … Fix Windows and unite the company’s various operating systems … Set a hardware strategy … Pick a management team … Work with the board, including Bill Gates …”
– Microsoft’s new CEO gets handsome pay package [USA TODAY, Feb 4, 2014]: “Overall, he could receive about $18 million as a first-year CEO, more than double what he received as head of the Microsoft’s cloud computing operation in 2013.”
Highly recommended follow-up: Nadella’s Speaks as CEO: Bloomberg West (02/04 video) [Bloomberg TV, Feb 4, 2014] (only the first [18:10] long out of total [41:55] )
Feb. 4 (Bloomberg) –- Full episode of “Bloomberg West.” Guests include Habit Design’s Michael Kim [former Microsoft], Kilbourne Group’s Doug Burgum [former Microsoft], Department of Health and Human Services’ Kurt Delbene [former Microsoft], FCC’s Jessica Rosenworcel, Kapor Center’s Nicole Sanchez, Code2040’s Laura Weidman Powers, Bloomberg Contributing Editor Paul Kedrosky and Bloomberg’s Megan Hughes. (Source: Bloomberg)
Next the details are coming in the following sections:
- ICT industry reports
- Reuters reports
- Bloomberg reports
- Microsoft video text messages for the world and its employees
1. ICT industry reports:
- Short Take: Satya Nadella’s cloud priorities for Microsoft [Network World Videos [of IDG] YouTube channel, Feb 4, 2014]
- Inside Scoop: Why Microsoft named Satya Nadella CEO [CNET YouTube channel, Feb 4, 2014]
- Analysis: Satya Nadella is Microsoft’s new CEO [GeekWire [of Seattle, WA] YouTube channel, Feb 4, 2014]
- 10 Ways CEO Satya Nadella Should Change Microsoft, Business, Culture [eWeek, Feb 4, 2014]
|Limit Gates’ Influence||Stop Pretending Windows 8 Works||Become More Hardware-Centric|
|Fix Xbox One Flaws||Spend More Time in the Clouds||Strongly Question the Nokia Play|
|Get Away From Bing||Become Smaller, More Agile||Announce Windows 9 Sooner Rather Than Later|
|Prove It’s a New Microsoft|
- Nadella seen as best choice for Microsoft’s new CEO… except in one crucial area [BGR, Feb 4, 2014]
- Satya Nadella brings technical skill and enterprise strength, but what’s the consumer story? [Ars Technica, Feb 4, 2014]
The late 2000s were characterized by Microsoft dropping the consumer ball. The company didn’t notice that the iPhone had made the smartphone a mass-market, consumer device, and the company did not appear to anticipate that the smartphone’s success in the consumer space would in turn lead to success in the enterprise space—even though this kind of cross-pollination is a large part of what made Microsoft the behemoth it is. The same story was repeated with the release of the iPad and the consumer-oriented tablet.
There is pressure from Wall Street for Microsoft to abandon the consumer market. Sell off Xbox [regarding that see also Phil Spencer: Microsoft’s New CEO Supports Xbox One [Cinema Blend, Feb 4, 2014]], Nokia, Bing, and retreat to the cozy confines of the enterprise market and become another IBM. I would argue that this is a mistake. Should Microsoft abandon the consumer market, the next generation of school-leavers will be raised on Google Apps, iPads, Chromebooks, and OS X.
This won’t merely disrupt Windows on the desktop. It will damage the long-term viability of Office, and beyond that, of Windows on the server as a development platform. This is not to say that these businesses will evaporate entirely, but they’ll be greatly diminished.
Importantly, Nadella appears to recognize this. At the company’s 2013 Financial Analyst Meeting, Nadella said, “This notion that this is an enterprise product and this is a consumer product I think is not the way we will approach things. We’ll think about these products as sort of meeting end user needs and enterprise IT needs, and how to balance that.”
But recognizing the duality is one thing. Responding appropriately to it is another. Making sure that Microsoft doesn’t make the same mistakes, and that it actually leads the consumer space rather than belatedly following others, will require strong, consumer-focused voices and leadership within the company. It’s not surprising that Microsoft’s new CEO does not cover all these bases. It’s unlikely anyone could, such is the diversity of what Microsoft does.
With Nadella’s promotion, it’s not entirely clear where this consumer focus and understanding will come from. Microsoft may be pinning its hopes on a new more active role for Bill Gates. Gates has stepped down as chairman (replaced by John Thompson, formerly of Symantec) but will now spend up to one-third of his time working with product groups and defining the “next round of products.”
But whether Gates can provide this guidance isn’t so clear. In broad strokes, Gates’ Microsoft was an early pioneer of both tablets and smartphones (and even smart watches). In each case, however, the company failed to adapt those early visions to accommodate new technology and new consumer preferences. Admittedly, Gates wasn’t involved in the day-to-day running of the company when these oversights were made, but even as chairman, one would think that he could have pointed out that Microsoft was missing a trick—assuming he recognized it.
Satya Nadella is a good choice for Microsoft CEO, and while it’s day one on the job, he’s so far saying the right things: recognizing the importance of the consumer space, promoting a “mobile first, cloud first” view where devices are important and where hardware, including Nokia, is part of Microsoft’s future. Wretched cliché as it may be, only time will tell if Nadella has what it takes to move the company forward.
- The biggest Microsoft question: What about Bill? [Gigaom, Feb 4, 2014]: “… Make no mistake, Nadella is a great choice as CEO. I’m just not sure he needs the company co-founder and former CEO as a shadow.”
- Satya Nadella at the Accel Partners Symposium [SiliconANGLE YouTube channel, Feb 2, 2014]
Microsoft today announced Satya Nadella as the new CEO of Microsoft. We had reported on Friday last week that Sundar Pichai from Google was another top consideration thanks to his firsthand knowledge of the increasingly influential consumer web, but it was Nadella that won out in the end.. Nadella is known for his experience in the enterprise, helping to rework much of Microsoft’s infrastructure for long-reaching products including Bing and Xbox. But is Nadella too safe of a choice for Microsoft? Would an outsider like Pichai have been better suited to lead Microsoft into the new consumer web?
Microsoft, like its peers and rivals in the industry, is betting big on the modern data center, but with Nadella at the helm, is the Redmond company landing on the wrong side of the cloud? Is this too much of an analog play and not enough of a shake-up play?
In conjunction with the announcement, Microsoft founder Bill Gates will step down from his position as Chairman of the Board and be replaced by our own SiliconANGLE theCUBE alum John Thompson. Gates is allocating a third of his time to mentor Nadella. The duo has much to discuss, reshaping Microsoft for the data center of the future. Cloud services remains at the center of an industry-wide revolution, and Nadella’s already shared his thoughts on the subject.
Just this past summer we had Nadella on theCUBE at the Accel Partners Symposium, live from Stanford University. Nadella discussed with theCUBE host Jeff Kelly the notion of the modern enterprise: a re-imagination of what infrastructure means and what applications mean inside of the enterprise. According to the new chief, there is a tectonic shift happening in the enterprise, and Microsoft is a part of that shift. From a business perspective, a key to infrastructure is being in touch with the applications.
“We’re building a new operating system for the modern enterprise to be able to deploy these modern applications. That is how I conceptualize it,” Nadella stated.
The four mega trends constitute the future of a modern enterprise infrastructure. But that can make for an awfully complex public, private and/or service provider cloud. So how does Microsoft and Nedella approach that problem of complexity?
Nadella says to start with the design point — public, private and service provider cloud. He believes it’s the true fruition of distributed computing.
“So these four things, identity, management, virtualization and application platform I think is the co-investment you’ve got to make to help enterprises truly adopt the cloud while its complex but you have to tame the complexity,” Nadella explained.
So what does that mean for Microsoft? Is Nadella the man to lead them into the consumer web and the Internet of Things? It feels like a bit of a safe bet for Microsoft. How can that be for a Fortune 50 company who just reported a killer? As our Editor-in-Chief John Furrier reported last Friday in his Breaking Analysis segment, it’s about getting the data right.
Buried in the news of Nadella being named CEO is the news we mentioned above that John Thompson will be the new Chairman of the Board. Interesting tidbit, when on theCUBE in 2011 Furrier asked Thompson about the “middle fat part” developing within the market as it relates to real-time data. Given this consumer-driven market powered by the Internet of Things, Thompson hints at his own vision for Microsoft, one that rings true nearly three years later as he works closely with Nadella on Microsoft’s board:
“Our focus is on the global 2000. They have one thing in common, performance and uptime sensitive. We think this market is about a $1.7-$1.8 billion market. We have literally barely scrapped the surface on that. This is a phenomenon that we think will only catch more wind in its sails,” said Thompson.
2. Reuters reports:
- From: Microsoft names India-born Nadella as next CEO, Gates to advise on technology [Reuters edition in India, Feb 4, 2014]
Microsoft Corp named 22-year company veteran Satya Nadella as its next chief executive officer on Tuesday (February 4), and said co-founder Bill Gates would step down as chairman and advise the new CEO on technology, marking an epochal change of control at the company that drove the PC revolution.
Nadella, a 46-year old born in India who led the creation of Microsoft’s Internet-based, or “cloud” computing services, is only Microsoft’s third CEO in 39 years, taking over from Steve Ballmer, who inherited the job from Gates in 2000.
The move ends a five-month search process at the Redmond, Washington-based company, triggered by the August announcement of Ballmer’s decision to retire. That was longer than many investors had expected.
Gates said Nadella’s experience in cloud computing made him the right man to lead Microsoft, as the company struggles to find its feet in the new arena of mobile computing. As he relinquishes the chairman’s title, Gates will stay on the board and assume a new role as technology adviser to Nadella.
Shares of the world’s largest software maker were up 0.2 percent at $36.54 on the Nasdaq on Tuesday morning.
Nadella, who describes himself as a cricket and poetry lover, called the appointment “humbling” in an email to the company’s employees. In a videotaped statement he said he would focus on “ruthlessly” removing any obstacles to innovation at the company.
Satya Nadella’s new job is a big one- as only the third CEO in Microsoft’s almost four decade history- he takes over at a critical time- and he himself makes it clear in this Microsoft video- he won’t put up with anything that gets in his way:
SOUNDBITE: SATYA NADELLA, CEO, MICROSOFT (ENGLISH) SAYING: “The first thing I want to do and focus on is ruthlessly remove any obstacles that allow us to innovate.” One obstacle, some say, was Bill Gates in his role as Chairman. He’s stepping down – but says he will now spend one third of his time advising Nadella on technology.
A good move all around says analyst Patrick Moorhead. SOUNDBITE: PATRICK MOORHEAD, PRESIDENT AND PRINCIPAL ANALYST, MOOR INSIGHT AND ANALYSIS (ENGLISH) SAYING:
“He’ll have a less powerful role in terms of managing the business of the board but he is narrowing the scope in on something I don’t think anybody can argue with, in that he is going to give insights to products and at its core, Gates is a product person.”
That’s good because products are a big problem. For example, the company is still struggling to find its feet as mobile computing evolves.
SOUNDBITE: PATRICK MOORHEAD, PRESIDENT AND PRINCIPAL ANALYST, MOOR INSIGHT AND ANALYSIS (ENGLISH) SAYING:
“You have Apple, Samsung and Google who are gaining a ton of share and a ton of mindshare for the future and I think Nadella needs to take a hard look in the mirror and really evaluate whether Microsoft can win there.”
See more opinion from him in Gates will have a less powerful role – Patrick Moorhead (6:10) video
They also missed the boat on social media– says Bruno Del Ama– who runs the Global X social media Index fund:
SOUNDBITE: BRUNE DEL AMA, CEO, GLOBAL X FUNDS (ENGLISH) SAYING: “Tremendous amount of growth. Very difficult to do organically and so if they want to do something there in a meaningful way they probably have to acquire.”
Microsoft has also been facing a slow erosion of its PC-centric Windows and Office franchises.
Investors have been clamoring for a big move– and a break up makes sense says Chris Baggini of Turner Investments.
SOUNDBITE: CHRIS BAGGINI, SENIOR PORTFOLIO MANAGER, TURNER INVESTMENTS (ENGLISH) SAYING:
“I think he has to split the company up. It’s really a mishmash of very mature businesses and some growthier businesses and unfortunately we’ve seen this before where the more mature businesses languish with very low growth rates and the growthier businesses really don’t get valued the way they should. So they have a data center business which is very strong, they can break out their consumer business and separate that out and leave an enterprise business which is a very strong cash flow business.” Shares were slightly higher on the official announcement- the stock had rallied when rumors of Nadella’s promotion leaked last week.
At the end of the discussion they are asking:
Will Satya Nadella finally break up Microsoft?
Tweet us your thoughts @Breakingviews
- Microsoft founders recede into middle distance [by Robert Cryan on the Breakingwiews blog of Reuters, Feb 4, 2014]
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Microsoft’s founding fathers are finally receding into the middle distance. Satya Nadella’s experience makes him a solid choice to succeed longtime Chief Executive Steven Ballmer. Better still, he will have greater room to maneuver as Bill Gates steps down as chairman. Nadella will need to grapple with his predecessors’ bad decisions, like the Nokia deal, and he’s unlikely to pursue a breakup. But he can focus on what the company does best.
While many candidates entered the frame, it was always going to be a difficult post to fill. Microsoft spans everything from its omnipresent operating system to enterprise software to consumer hardware. It’s also threatened by upstarts and a shift in technology away from PCs. Finding a manager that understands technology, all these markets and has skills in revitalizing a mature behemoth was close to impossible.
Worse, the decision to buy Nokia’s handsets arm for $7.2 billion in the midst of the search showed that Microsoft’s board was wedded to the sprawl built by GATES AND BALLMER. Few credible outsiders wanted to step into a position where they had little say over the company’s direction.
In this light, Nadella’s choice is probably as good as the company could make. He has worked for Microsoft since 1992, so he knows the place. His most recent task was to run Microsoft’s cloud and enterprise group. This is one of the fastest growing divisions at Microsoft and represents the company’s future – selling software on demand to companies. He doesn’t have sales experience or much interaction with investors, which is important for a $303 billion market cap company. But Microsoft’s bench has enough depth to make up for these shortfalls.
The bigger question is where Nadella will take Microsoft. He didn’t give many hints in his opening memo to employees. The right course would be to focus on enterprise software, which is what Microsoft does best. A breakup or spinoff of the consumer and hardware operations would be welcome. But with Ballmer still on the board and holding some 4 percent of the company, and Gates remaining as the board’s technology adviser to “devote more time to the company,” such radical redrawing will be hard to accomplish any time soon.
But the message is unmistakable. The old guard is slipping into the background. That gives Nadella room to slowly turn Microsoft toward a more focused, and potentially valuable, future.
3. Bloomberg reports:
- Microsoft Names Satya Nadella CEO, John Thompson Chair [Bloomberg YouTube channel, Feb 4, 2014]
Reporting related to that:
– Microsoft’s Nadella Named CEO to Transform PC Pioneer [Bloomberg, Feb 5, 2014]: “ ““He’s really the complete package — he has incredible intellect but he also combines that with a deep curiosity and willingness to learn,” said Doug Burgum, who sold business-software developer Great Plains to Microsoft in 2001 and oversaw Nadella while at the Redmond, Washington-based company. … Nadella keeps an eye on the moves of nimbler startups and has pushed Microsoft executives to learn from what people outside of Redmond are doing, a person with knowledge of his management approach has said. At a technology conference in Paris in December, he spent time with local startups like video-on-demand company Video Futur Entertainment Group SA.”
– Microsoft Signals New Era With Thompson as Chairman [Bloomberg, Feb 4, 2014]: “ “Thompson’s going to be a major voice for the company,” James Staten, an analyst at Forrester Research, said in an interview. “They wouldn’t have made him chairman, if he didn’t have strong opinions about how to drive the company forward. And Satya is looking for strong partners on the board.” … Thompson and Nadella will oversee a transition to a new organizational structure and integrate the $7.2 billion acquisition of Nokia Oyj (NOK1V)’s handset unit. The management transition at Microsoft follows the worst decline on record for personal computers in 2013, when shipments dropped 10 percent and are projected to languish through 2017. Thompson knows what it’s like to be at the head of a struggling incumbent. While at Symantec in 2005, he orchestrated the ill-fated $10.2 billion purchase of Veritas Software Corp., in an effort to push into data storage. When Thompson stepped down as CEO four years later, Symantec was contending with slowing growth amid an economic downturn and rising competition. … Thompson likes to tell people he spent “27 years, 9 months and 13 days at IBM” before joining technology security company Symantec as CEO in 1999. He took the company from $600 million to $6 billion in sales over his decade-long tenure, before stepping down in 2009. … A new director set to join the board next month is Mason Morfit, president of activist shareholder ValueAct Holdings LP. He’s eager to see Microsoft emphasize its business software and Internet-based cloud services rather than consumer technology, people familiar with the situation have said.”
– Microsoft Gets Style Shift With Nadella Replacing Ballmer [Bloomberg, Feb 5, 2014]
– Microsoft CEO Pick Leaves Losers Grappling With Fallout [Bloomberg, Feb 5, 2014]: “With Microsoft’s board disclosing today that it picked Satya Nadella as CEO, that leaves internal candidates such as Executive Vice President Tony Bates and Chief Operating Officer Kevin Turner among those who failed to get promoted, people with knowledge of the search have said. Stephen Elop, the former CEO of Nokia Oyj who was set to join the software maker after it closes a $7.2 billion deal for Nokia’s handset unit, was also on the shortlist, among others. … The CEO candidates were informed that they didn’t get the role last week … Turner plans to stay at the Redmond, Washington-based company, said a person close to the COO. And while Bates and Elop both have ambitions to be CEO, they are also set to continue at Microsoft for the time being since success in their current jobs may be the best way to attract other offers, said people close to the executives, who asked not to be identified because the information is private.”
– Who Is Satya Nadella and Why Is He Microsoft’s CEO? (video) [Bloomberg TV, Feb 3, 2014]: “Feb. 4 (Bloomberg) — Kurt Delbene, former president at Microsoft Office, and Bloomberg Contributing Editor Paul Kedrosky discuss Microsoft’s choice of Satya Nadella as its new CEO on Bloomberg Television’s “Bloomberg West.” “
– Nadella as CEO Good for Microsoft’s Future: Subotky (video) [Bloomberg TV, Feb 4, 2014]: “Feb. 4 (Bloomberg) — Jason Subotky, a portfolio manager at Yacktman Asset Management Co., talks about Microsoft Corp.’s decision to name Satya Nadella chief executive officer. Nadella will replace Steve Ballmer effective immediately after a five-month search, Microsoft said in a statement today. Subotky speaks with Scarlet Fu, Jon Erlichman, Matt Miller, Paul Kedrosky and Anurag Rana on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)”
– How Can Nadella, Gates Shape Microsoft’s Future? (video) [Bloomberg TV, Feb 4, 2014]: “Feb. 4 (Bloomberg) — Kurt Delbene, former president at Microsoft Office, and Bloomberg Contributing Editor Paul Kedrosky discuss how the shakeup in Microsoft’s c-suite can shape the future of the company on Bloomberg Television’s “Bloomberg West.” ”
- Microsoft Preps Insider Satya Nadella for CEO Promotion [Bloomberg YouTube channel, Jan 31, 2014]
Reporting related to that: Microsoft Said to Be Preparing to Make Satya Nadella CEO [Bloomberg, Jan 31, 2014]
Reporting related to that:
– Microsoft’s New Power Isn’t Gates, Nadella: Walia (video) [Bloomberg TV, Feb 3, 2014]: “Former Microsoft Executive Hardeep Walia discusses the search for a new Microsoft CEO on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)”
– Microsoft Begins New Era With Nadella, Gates (video) [Bloomberg TV, Feb 3, 2014]: “Feb. 4 (Bloomberg) — Bloomberg senior West Coast correspondent Jon Erlichman breaks down the management changes at Microsoft on Bloomberg Television’s “Market Makers.” ”
– Bill Gates to Assume Role as Technology Adviser [Bloomberg TV, Feb 4, 2014]: “Feb. 4 (Bloomberg) — Microsoft named Satya Nadella CEO, tapping an insider steeped in business technology to speed turnaround at a software maker that helped usher in the personal-computing age only to be left behind as the world shifted toward the Web and mobile devices. Bloomberg Contributing Editor Paul Kedrosky, Bloomberg’s Matt Miller and Jon Erlichman speak on Bloomberg Television’s “In The Loop.” (Source: Bloomberg)”
4. Microsoft video and text messages for the world and its employees (in addition to the pre-recorded interviews embedded in the beginning of this post):
Microsoft Chairman John Thompson on CEO Satya Nadella [Microsoft Feb 14, 2014]
Bill Gates welcomes Satya Nadella as Microsoft CEO [Microsoft Feb 14, 2014]
Steve Ballmer welcomes Satya Nadella as Microsoft CEO [Microsoft Feb 14, 2014]
Microsoft Board names Satya Nadella as CEO [press release, Feb 4, 2014]
Bill Gates steps up to new role as Technology Advisor; John Thompson assumes role as Chairman of Board of Directors.
Microsoft Corp. today announced that its Board of Directors has appointed Satya Nadella as Chief Executive Officer and member of the Board of Directors effective immediately. Nadella previously held the position of Executive Vice President of Microsoft’s Cloud and Enterprise group.
“During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,” said Bill Gates, Microsoft’s Founder and Member of the Board of Directors. “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.”
Since joining the company in 1992, Nadella has spearheaded major strategy and technical shifts across the company’s portfolio of products and services, most notably the company’s move to the cloud and the development of one of the largest cloud infrastructures in the world supporting Bing, Xbox, Office and other services. During his tenure overseeing Microsoft’s Server and Tools Business, the division outperformed the market and took share from competitors.
“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,” Nadella said. “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.”
“Having worked with him for more than 20 years, I know that Satya is the right leader at the right time for Microsoft,” said Steve Ballmer, who announced on Aug. 23, 2013 that he would retire once a successor was named. “I’ve had the distinct privilege of working with the most talented employees and senior leadership team in the industry, and I know their passion and hunger for greatness will only grow stronger under Satya’s leadership.”
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. John Thompson, lead independent director for the Board of Directors, will assume the role of Chairman of the Board of Directors and remain an independent director on the Board.
“Satya is clearly the best person to lead Microsoft, and he has the unanimous support of our Board,” Thompson said. “The Board took the thoughtful approach that our shareholders, customers, partners and employees expected and deserved.”
With the addition of Nadella, Microsoft’s Board of Directors consists of Ballmer; Dina Dublon, former Chief Financial Officer of JPMorgan Chase; Gates; Maria M. Klawe, President of Harvey Mudd College; Stephen J. Luczo, Chairman and Chief Executive Officer of Seagate Technology PLC; David F. Marquardt, General Partner at August Capital; Nadella; Charles H. Noski, former Vice Chairman of Bank of America Corp.; Dr. Helmut Panke, former Chairman of the Board of Management at BMW Bayerische Motoren Werke AG; and Thompson, Chief Executive Officer of Virtual Instruments. Seven of the 10 board members are independent of Microsoft, which is consistent with the requirement in the company’s governance guidelines that a substantial majority be independent.
From: Satya Nadella
To: All Employees
Date: Feb. 4, 2014
Subject: RE: Satya Nadella – Microsoft’s New CEO
Today is a very humbling day for me. It reminds me of my very first day at Microsoft, 22 years ago. Like you, I had a choice about where to come to work. I came here because I believed Microsoft was the best company in the world. I saw then how clearly we empower people to do magical things with our creations and ultimately make the world a better place. I knew there was no better company to join if I wanted to make a difference. This is the very same inspiration that continues to drive me today.
It is an incredible honor for me to lead and serve this great company of ours. Steve and Bill have taken it from an idea to one of the greatest and most universally admired companies in the world. I’ve been fortunate to work closely with both Bill and Steve in my different roles at Microsoft, and as I step in as CEO, I’ve asked Bill to devote additional time to the company, focused on technology and products. I’m also looking forward to working with John Thompson as our new Chairman of the Board.
While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation. This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places — as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.
As we start a new phase of our journey together, I wanted to share some background on myself and what inspires and motivates me.
Who am I?
I am 46. I’ve been married for 22 years and we have 3 kids. And like anyone else, a lot of what I do and how I think has been shaped by my family and my overall life experiences. Many who know me say I am also defined by my curiosity and thirst for learning. I buy more books than I can finish. I sign up for more online courses than I can complete. I fundamentally believe that if you are not learning new things, you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.
Why am I here?
I am here for the same reason I think most people join Microsoft — to change the world through technology that empowers people to do amazing things. I know it can sound hyperbolic — and yet it’s true. We have done it, we’re doing it today, and we are the team that will do it again.
I believe over the next decade computing will become even more ubiquitous and intelligence will become ambient. The coevolution of software and new hardware form factors will intermediate and digitize — many of the things we do and experience in business, life and our world. This will be made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning.
This is a software-powered world.
It will better connect us to our friends and families and help us see, express, and share our world in ways never before possible. It will enable businesses to engage customers in more meaningful ways.
I am here because we have unparalleled capability to make an impact.
Why are we here?
In our early history, our mission was about the PC on every desk and home, a goal we have mostly achieved in the developed world. Today we’re focused on a broader range of devices. While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us.
As we look forward, we must zero in on what Microsoft can uniquely contribute to the world. The opportunity ahead will require us to reimagine a lot of what we have done in the past for a mobile and cloud-first world, and do new things.
We are the only ones who can harness the power of software and deliver it through devices and services that truly empower every individual and every organization. We are the only company with history and continued focus in building platforms and ecosystems that create broad opportunity.
Qi Lu captured it well in a recent meeting when he said that Microsoft uniquely empowers people to “do more.” This doesn’t mean that we need to do more things, but that the work we do empowers the world to do more of what they care about — get stuff done, have fun, communicate and accomplish great things. This is the core of who we are, and driving this core value in all that we do — be it the cloud or device experiences — is why we are here.
What do we do next?
To paraphrase a quote from Oscar Wilde — we need to believe in the impossible and remove the improbable.
This starts with clarity of purpose and sense of mission that will lead us to imagine the impossible and deliver it. We need to prioritize innovation that is centered on our core value of empowering users and organizations to “do more.” We have picked a set of high-value activities as part of our One Microsoft strategy. And with every service and device launch going forward we need to bring more innovation to bear around these scenarios.
Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.
Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that it’s not just work, but something that will improve other people’s lives. This is the opportunity that drives each of us at this company.
Many companies aspire to change the world. But very few have all the elements required: talent, resources, and perseverance. Microsoft has proven that it has all three in abundance. And as the new CEO, I can’t ask for a better foundation.
Let’s build on this foundation together.
From: Steve Ballmer
To: All Employees
Date: Feb. 4, 2014
Subject: Satya Nadella – Microsoft’s New CEO
Today is an incredibly exciting day as we announce Satya Nadella as the new CEO of Microsoft. Satya will be a great CEO, and I am pumped for the future of Microsoft. You can read the full announcement here.
Satya is a proven leader. He’s got strong technical skills and great business insights. He has a remarkable ability to see what’s going on in the market, to sense opportunity, and to really understand how we come together at Microsoft to execute against those opportunities in a collaborative way. I have worked closely with Satya for many years and I have seen these skills many times. He is not alone, though. Our Senior Leadership Team has never been stronger, and together this group will drive us forward.
Microsoft is one of the great companies in the world. I love this company. I love the bigness and boldness of what we do. I love the way we partner with other companies to come together to change the world. I love the breadth and the diversity of all of the customers we empower, from students in the classroom to consumers to small businesses to governments to the largest enterprises.
Above all, I love the spirit of this place, the passion, and the perseverance, which has been the cornerstone of our culture from the very beginning.
Stay focused and keep moving forward. I am excited about what we will do. Satya’s appointment confirms that.
Thanks for making Microsoft the most amazing place to work on the planet, and thanks for the chance to lead.