Microsoft names Satya Nadella its new CEO

Nadella has to grapple with a much broader set of challenges in markets in which he has little experience, like mobile devices.

Seattle | Published: February 5, 2014 4:08:19 am

Nick Wingfield

Microsoft on Tuesday announced that Hyderabad-born Satya Nadella was its next leader, betting on a longtime engineering executive to help the company keep better pace with changes in technology.

The selection of Nadella to replace Steven A Ballmer, which was widely expected, was accompanied by news that Bill Gates, a company founder, had stepped down from his role as chairman and become a technology adviser to Nadella. John W Thompson, 64, a member of the Microsoft board who oversaw its search for a new chief executive, became the company’s chairman, replacing Gates.

“During this time of transformation, there is no better person to lead Microsoft than Satya Nadella,” said Gates, who remains a member of Microsoft’s board. “Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together.”

In a statement, Nadella said, “Microsoft is one of those rare companies to have truly revolutionized the world through technology, and I couldn’t be more honoured to have been chosen to lead the company.”

In Nadella, Microsoft’s directors selected both a company insider and an engineer, suggesting that they viewed technical skill and intimacy with Microsoft’s sprawling businesses as critical for its next leader. It has often been noted that Microsoft was more successful under the leadership of Gates, a programmer and its first chief executive, than it was under Ballmer, who had a background in sales. Ballmer, 57, said in August that he was stepping down.
Nadella, 46, is only the third chief executive of Microsoft, an icon of American business that has struggled for position in big growth markets like mobile and Internet search. The company has correctly anticipated many of the biggest changes in technology — the rise of smartphones and tablet computers, to use two examples — but it has often fumbled the execution of products developed to capitalize on those changes.

It remains to be seen whether Nadella’s technical background, along with the closer involvement of Gates in product decisions, will give the company an edge it lacked during the Ballmer years. Microsoft said in a statement that Gates will “devote more time to the company, supporting Nadella in shaping technology and product direction”.

Nadella is a contrast to Ballmer in other ways. Most recently the executive vice president of Microsoft’s cloud and enterprise businesses, Nadella peppers his conversations and speeches with technical buzzwords that people outside the industry would most likely find impenetrable. Nadella, who has been married for 22 years and has three children, counts cricket and poetry among his hobbies. In an email to Microsoft employees on Tuesday morning, he wrote that he is “defined by my curiosity and thirst for learning”.

“I buy more books than I can finish,” he wrote. “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.”

Nadella showed ambition early in his career. He received degrees in engineering and computer science, then earned a master’s degree in business administration from the University of Chicago Booth School of Business while working full time at Microsoft. He flew to Chicago from Seattle to attend classes on the weekend, according to Steven Kaplan, a professor at the school who taught Nadella in a course on entrepreneurial finance and private equity.
Now, Nadella is known as a cerebral, collaborative leader with a low-key style that differs from Ballmer’s bombastic manner. While many executives within Microsoft tend to be polarizing figures, Nadella appears to be well liked in much of the company. Still, those who know Satya Nadella say that he is not a pushover as a boss.

Nadella’s star at Microsoft rose considerably in the past several years as he took charge of the company’s cloud computing efforts, a business considered vital as more business customers choose to rent applications and other programs in far-off data centres rather than run software themselves. For years, Microsoft did not pay enough attention to how the cloud — primarily through services offered by Amazon, its crosstown rival — was attracting the creativity of a new generation of developers. When he got control of the division that included Microsoft’s cloud initiatives, Nadella changed that. He began meeting with start-ups to hear more about what Microsoft needed to do to become more responsive to their needs.

As chief executive of the entire 100,000-person company, Nadella has to grapple with a much broader set of challenges in markets in which he has little experience, like mobile devices. He inherits a deal to acquire Noki’’s mobile handset business, along with 33,000 employees, and a wide-ranging reorganization plan devised by Ballmer and still in progress.

In an interview in July, Nadella was supportive of the reorganization plan, which he predicted would allow Microsoft to adapt to changes in the market more quickly than in the past.””I’’s not like our old structure did’’t allow us to do some of this”” he said.””The question is whether you can amplify””

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