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Can Satya Nadella rescue Microsoft?

Last updated on: February 04, 2014 22:07 IST

Can Satya Nadella rescue Microsoft?

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Ritu Jha

Satya Nadella possesses cloud computing and infrastructure expertise and experts believe that his experience and skills will make him a qualified and valuable CEO of Microsoft.

As Satya Nadella, 45, takes over as the next chief executive officer (CEO) of Microsoft, industry analysts welcome the idea but say Nadella has to change the company's business model to succeed.

"We need techno guys to run companies. You don't need administrators. See what has happened to company like Apple whose CEO is a non-techno guy, the stocks are going soft," said Trip Chowdhry, an analyst at Global Equities Research, adding, "Any CEO at Microsoft...should be technology-based, be business-prudent and be imaginative. They have to earn the respect of their developers immediately."

He believes that anybody who is not technology-savvy in a company that has driven technology innovation, or is an administrator CEO will be dead on arrival in terms of leadership.

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Image: Satya Nadella
Photographs: Courtesy, Microsoft

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"For the next 10 years, it's all about who can invent and innovate faster," Chowdhry told Rediff.com.

Other candidates being bandied about for the job were Alan Mulally, CEO of Ford Motors; Stephen Elop, the former chief executive of Nokia; and Sundar Pichai, a senior vice president at Google who managed its Android OS, Chrome browser, and apps divisions.

Nadella's name had been circulating as a potential candidate for a long time now.

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Photographs: Courtesy, Microsoft

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"Compared to the rest, Nadella has the technology background, business background, global background and the ability to discuss future technology. That is very important. You don't what an executive who is always hedging his bets. Those days are over," Chowdhry said, saying there were just three imaginative business thinkers around now: Musk, Jeff Bezos, the founder of Amazon, and Larry Page, founder of Google.

He put Nadella and Pichai in fourth and fifth place, respectively. 

Chowdhry said Microsoft had three issues to address. The first was to shed a lot of irrelevant and aging products such as the .net framework and replace it with something scalable and platform-independent like Node js, Google's Javascript-based software.

Microsoft needs to rely on modern languages and work on the technology front. Finally, they have to increase the pace of acquisition, release products faster, and jettison baggage that weighs it down.

He described how Google's Android was nowhere in the landscape dominated by Blackberry, Nokia and then ascendent iOS.

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Photographs: Reuters

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Can Satya Nadella rescue Microsoft?

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Nadella has been at Microsoft for two decades and is a member of the board of directors since last March. He has been the president of Microsoft Corporation's Server and Tools Business, a division that builds and runs the company's computing platforms, developer tools and cloud services, since February 2011.

From March 2007 to February 2011, he has served as senior vice president of R&D for Microsoft Corporation's Online Services.

Before joining Microsoft, Nadella was on the technology staff at Sun Microsystems, Inc. He holds a bachelor's degree in Electrical Engineering from Manipal Institute of Technology, a master's degree in computer science from the University of Wisconsin, Milwaukee, and an MBA from the University of Chicago.

Nadella possesses cloud computing and infrastructure expertise and people believe that his experience and skills make him a qualified and valuable CEO of a giant company which is hunting for CEO since last August.

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Image: Satya Nadella
Photographs: Courtesy, Microsoft
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But Chowdhry pointed out that despite describing a healthy career curve, Nadella had not been able to make Bing, which fell under his charge, a serious competitor to the industry standard, Google.

Chowdhry gave Nadella a benefit of doubt on his past failures because Nadella was working under Steve Ballmer, the current CEO who clearly has fallen out of favour.

Chowdhry warned, though, that Nadella had to remember that imitation is not a strategy but a recipe of destruction.

Even though Nadella has succeeded in the area of enterprise technology (software to serve companies and not just individuals) Microsoft is a still a distant second to Amazon Web Services, Chowdhry said.

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Image: Microsoft's outgoing CEO Steve Ballmer.
Photographs: Reuters

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"What we are saying is that among all the candidates in the market, Satya has his share of failures and we hope he learns from his mistakes. We hope he believes that imitating Apple, Google or Amazon is not a recipe for success ... because today... you have to show something which has not been created before."

In this area, Chowdhry said, Nadella has to take on three companies: Amazon, Pivotal and Volt DB. The question to ask the next Microsoft CEO is how he - the current crop of candidates - can beat such sturdy competitors, given that all of Microsoft's signature products are in trouble and that enterprise is just sustaining itself. 

Many people think Microsoft is a great business but it is not, he said.

"We need to get talent. Microsoft is a progressive company, not a retirement company," Chowdhry said, saying there was a need to change the business model, which would involve taking difficult decisions, making customers unhappy and thus losing business. He needed to let go of many superannuated executives who see Microsoft only as a retirement option.

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Image: Microsoft Hyderabad campus.
Photographs: Reuters

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"They (Microsoft) were pioneers.., rewarding innovation above politics... But things are different now," he said.

"The problem with Microsoft is that it is very politically driven company. Unless they compensate people for capabilities and not politics it will be difficult to keep the employees motivated. Among all the alternates he (Nadella) is the best. Is he the perfect? No. But he could be... if he is focused, fast, motivated, imaginative and getting rid of senior executives at Microsoft," Chowdhry said.

Patrick Moorhead, president and principal analyst, Moor Insights & Strategy, also spoke to Rediff.com, saying, "Microsoft needs someone to help fix its ailing consumer businesses. Outside of the Xbox, it is hard to remember the last stellar Microsoft consumer product."

On the challenges ahead of Nadella, Moorhead said, "CEOs don't need to be masters of everything, but must exhibit stellar leadership skills and have a good track record. I would have liked to see Nadella having consumer experience, but he does not. He is very experienced in enterprise technologies and services (though)."


Image: Satya Nadella.
Photographs: Courtesy, Microsoft
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