So it looks like Microsoft has finally found their next CEO after a 6 month search as Satya Nadella is rumored to be promoted to this position shortly.
According to many of the articles I have read, Nadella is a true technologist with experience working in Microsoft's Online Services Division, Business Division and most recently the Server and Tools Business. I attended a meeting several years ago in which Satya was present and my memory of him is someone who isn't very loud or overpowering but he was thoughtful, focused and had the attention of the room.
Satya has worked at Microsoft for 22 years so he clearly understands the unique dynamics of the company. Being a true technologist and his knowledge of Microsoft were certainly two attributes that helped him win the job.
If these rumors are true and Mr. Nadella is the new CEO, there are several interesting points that come to mind:
What Took So Long?
After a search that took half a year and included several top external candidates, they settled on an internal candidate. That begs the question, if he was the right guy all along why did they look outside the company and why did it take them so long to come to this conclusion? Of course choosing the right person to lead a $77B company is no easy task, but if the person you eventually select is right under your nose shouldn't you have been grooming him for this role all along?
Hey You Get Onto My Cloud
It's no secret that over the past several years Microsoft has been "all-in" on the Cloud. After being late to several other trends (such as tablets & mobile) Microsoft jumped on the cloud opportunity and quickly spun up Azure services building out Microsoft pod based datacenters that almost qualify for their own zip codes. Microsoft built a flavor of Azure for SQL Server databases and offered many of their popular Enterprise applications such as Exchange, SharePoint and Office as online services.
While there has been some success with these offerings, Microsoft must be disappointed by the lack of adoption of their Azure services and has shifted their message from offering Azure services for hosting primary data to being a backup and DR repository. Most people I have talked to in and around Microsoft agree that while they can't abandon the cloud all together they should realize that products such as Windows, SQL Server and Collaboration (in addition to gaming and mobile) are still important to customers and are revenue streams that shouldn't be ignored. While the cloud business will continue to grow, it won't replace the local datacenter anytime soon.
But Microsoft is selecting a CEO who has been the face of Microsoft's cloud business. Satya Nadella has experience running Microsoft's Online Services Division and most recently their Server and Tools Business which is responsible for System Center and Hyper-V, key technologies to Microsoft's cloud business. Nadella also has been involved with Microsoft Office 365 and played some key roles to the growth of Azure.
Looking at the Forecast
So what is the future of Microsoft? Nadella is only the third CEO in the company's history and there is still confusion as to what roles Gates and Ballmer will have as board members. If Nadella is free to run the company as he sees fit, the future may get even cloudier at Microsoft and possibly even stormy as Microsoft transforms to focus on online services and consumer products upsetting their traditionalist followers. If Microsoft does commit to the cloud will revenue start to vaporize as they lose ground to online providers Amazon, Google or even new startups?
It's obvious Microsoft choose a leader who knew the company inside and out which will save time getting an outsider up to speed or going through messy re-organizations. Nadella is a Microsoft veteran who will instill confidence in a company that was getting nervous as the CEO search started to drag on. Whatever the future holds this was a safe choice and probably the best one before people started to wonder, why is it so hard to find someone who would want to take on the role of Microsoft CEO at this point?