Microsoft named its third CEO in its entire 38-year history today: Satya Nadella. After Bill Gates and Steve Ballmer, Nadella faces the challenge of running a company that has 16 different billion-dollar businesses and will soon have 130,000 employees thanks to its acquisition of Nokia.
While Nadella has been working at Microsoft for 22 years, he has spent the majority of his time building products that don’t often make the headlines. This might not make him an obvious choice to outsiders, but insiders have seen him transform Microsoft’s server business to focus on the cloud in areas that are increasingly important for businesses and the enterprise.
Microsoft could be well positioned to continue building services and software that other companies use on their devices. Try as it might on hardware, Microsoft is still a software giant right now. And that, for Nadella, is certainly not a bad thing.
He warns that “While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation.” Nadella also lays out a bit of his plan for the company. He mentions that he requested Bill Gates to help out more than he has in the past few years, and perhaps more importantly, he speaks generally of focusing the company on what it does best. He says “We need to prioritize innovation that is centered on our core value of empowering users and organizations to ‘do more.'”
Nadella’s work on Microsoft’s server and tools business helped boost the division’s profitability and smoothed its transition from traditional client-server computing to cloud infrastructure like Windows Azure. Recently, Nadella has been focused on Microsoft’s cloud businesses, pushing the company’s underlying infrastructure and services into products like Bing, SkyDrive, Xbox Live, and Skype. While Nadella has little experience running consumer-facing businesses like Xbox or Skype, he does have a deep understanding and knowledge of the computing and engineering required to develop and build services and applications that are used by millions. Given Microsoft’s “devices and services” push, he’s clearly well positioned to help steer the company in one particular direction.
While Windows is struggling thanks to a decline in PC shipments, Microsoft’s enterprise, Office software, and services are continuing to bring in impressive revenues for the company. Nadella compliments this strength perfectly, but he will now need to prove he can complete Microsoft’s vision for devices and its ongoing mobile push.