CIO Issues

Why New CEO Nadella May Be Wrong for Microsoft

Why New CEO Nadella May Be Wrong for Microsoft
February 5, 2014 10:12AM

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Although Microsoft's new CEO Satya Nadella has enjoyed undeniable success at the company during his 22 years, Microsoft needed a change of attitude and a change of culture -- someone who is willing to come in and rock the boat -- that even an insider as qualified as Satya Nadella can’t offer.

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While many people are applauding Microsoft’s choice to replace Steve Ballmer as the company’s CEO, criticism is already emerging. Some are questioning whether the choice signals a new era or a new error. Still others are saying the appointment of Satya Nadella is not enough.

Nevertheless, Nadella, an India native who previously held the position of executive vice president of Microsoft’s Cloud and Enterprise Group, is the newly-minted CEO. He’s also taking a seat on the board of directors. All this is effective immediately.

"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."

A Little Disappointed

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.

Nevertheless, Zeus Kerravala, a principal analyst at ZK Research, told us he’s a little disappointed that Microsoft chose an insider. Although Nadella has enjoyed undeniable success at the company during his 22 years, he’s convinced that Redmond needed a change of attitude and a change of culture -- someone who is willing to come in and rock the boat -- that even an insider as qualified as Nadella can’t offer.

“Microsoft is making most of its money from where they tossed the puck not where it’s heading. I think that’s a dangerous place to be in,” Kerravala said. “I don’t necessarily believe an internal Microsoft line of business executive is the right guy to make the changes the company needs to make.”

Old and Stodgy

What changes? For starters, Kerravala said he’d like to see the Windows brand eradicated -- at least beyond the desktop. He doesn’t think the poor performance of Windows phones is due to anything lacking on the actual mobile devices. Nokia has offered an attractive option with the Lumias.

“The younger generation doesn’t consider a product that carries the Windows name to be cool anymore. Google launched an Android phone and targeted it toward anybody that didn’t want to be an Apple user with edgy marketing,” he said. “Microsoft could have taken a lesson from that.”

For a group of buyers that’s in control of where a big chunk of this technology market is going, Kerravala said Windows and Microsoft in its current form isn’t cool or cutting edge -- it’s viewed by many as an old, stodgy software company.

“If you look at Microsoft’s last earnings call, most of its profits came from corporate products like Windows, SharePoint and Office. It’s not coming from Xbox and Windows Mobile and Surface,” Kerravala said. “Microsoft needed someone who would come in and shake it all up.”

Tell Us What You Think
Comment:

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AV:

Posted: 2014-02-05 @ 11:01pm PT
Real poor views - no understanding of real business strategy. Android succeeded because of its approach as an OEM platform vs proprietary Apple devices (great integration of leading edge communication simple-to-use features but avoided next gen innovations coming from the total industry vs Apple alone. Apple's leadership will last only a few more years - reminds one of IBM in mainframe heydays)
Only if Microsoft can wake up to have a PLATFORM SW that seamlessly encompasses all devices and lets people build add 0n functions/features - it would be a winner for a long time)
You need to talk to analysts who understand IT.



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