Will Nadella Help Microsoft Break Away From The Past?

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satya-nadella-microsoftMicrosoft announced that Satya Nadella would succeed Steve Ballmer as CEO. A 22-year veteran of the company who previously led Microsoft’s cloud and enterprise efforts, Nadella is generally considered a safe choice for the top executive spot.

While Nadella is by all accounts a seasoned executive and by no means a bad choice, it does nothing to take away from the inherent dysfunction that is crippling Microsoft’s board of directors. Soliciting the help of an outside, executive recruiter to find the next CEO carries a profoundly bad aroma; especially for a large and established company such as Microsoft. To be sure, the conditions and landscape that confronted Steve Jobs and Apple in the early 90s were radically different from those facing Gates and Nadella right now. Take Microsoft’s current business model, which has brought home fabulous profit over the last twenty years.

It sells the software that runs most of the world’s PC, sells productivity software that runs on those PCs, and then sells enterprise data centre software that serves those PCs.

To put it simply, the company’s business model is ‘PC-Windows + Microsoft Office + Server’.  It doesn’t take a genius to realize that with replacement cycles getting longer and with PCs being relegated by more accessible devices such as the iPad, this model no longer works.

What is required is a re-think of how Microsoft’s role in the world of technology should play out. It should abandon the notion that is still first and foremost an ‘operating software (OS)’ company, and instead start focusing on spreading services like Azure and Office 365 on all devices—especially iOS and Android.

The tech giant should abandon the notion that it is a Windows-only company. Going by the champagne popping and chest-thumping surrounding Satya Nadella’s anointment as next CEO of Microsoft, it’s almost as if the events that lead to former CEO Steve Ballmer’s hasty resignation and the unduly prolonged CEO search never happened.

It is in pursuit of this goal that Gates may prove to be a hindrance—much of the company’s current ailments stem from his obsession with a Windows-focused Microsoft. He and Ballmer are the chief proponents of spreading Windows everywhere; an ambition that manifests in misguided decisions like Windows 8 and the Nokia acquisition.

This new strategy or whichever one Microsoft chooses to embark on will also necessitate a significant restructuring and thousands of lay-offs. A growing and future-ready Microsoft is also a small(er) Microsoft.

How much authority Nadella chooses to exert will likely decide the success of his tenure. While there is little doubt that Nadella is best poised to drive change, even here there is some soul-searching to do.

Nadella traces his recent success as the head of Microsoft’s Enterprise and Cloud group mostly to the Enterprise part, which is more intimately linked to the company’s old business model.

In fact, Azure and Office 365 compete with many of Microsoft’s own server products—a fact that makes the initial success of Azure all the more impressive. Will Nadella have the guts to pull the plug, and, indeed, render unnecessary much of his old team? Will Gates, who in all likelihood did not sign up for this, stand by him when he does?

With Nadella and Gates, Microsoft has chosen to cling to its past sins—and sinners. But perhaps that’s for the best; after all, true redemption comes from within.

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Annie Steffi Sydney

The author is a computer science engineer and she is currently pursuing MBA. She has received many National Awards in different fields.She has a passion for writing, social service and Bharatanatyam.

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